ERJ staff report (DS)
Melksham, UK -- Avon Rubber PLC said its Cadillac Michigan facility has generated a satisfactory profit in the final quarter following the substantial resolution of production issues and cost overruns. The unit suffered earlier in the year following delays to the start of a contract to make the M50 respirator single source for the US Department of Defense.
Net debt reduced to £15.1 million at the year-end from £18.3 million at 30 June 2008 with an improvement in working capital, despite the negative impact on borrowings of a stronger US dollar.
The company said it expects the Michigan unit to improve its profitability as the contract progresses. The unit has orders of $25 million on hand for delivery and further US Government funding of $42.6 million approved in 2009 for this 10 year programme.
Avon said its Avon-ISI unit, which sells primarily to fire services in the US, has not met expectations in difficult market conditions. This, said Avon, "will require us to consider the carrying value of goodwill and intangible assets associated with this business. We also expect to require an increase in the provisions associated with discontinued operations."
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Press release from Avon Rubber