Avon returns to profitability in first half of 2009

ERJ staff report (RD)

Wiltshire, UK - For the first six months of 2009, ending 31 March, Avon Rubber plc has reported revenue up by 103 percent to £44.1 million (Euro 50.4 million), compared to the same period last year. The company has moved production of dairy products from its site in Hampton Park West to a third-party supplier in the Czech Republic. The company did  not say how many people had been affected by the decision.

Avon generated £1.8 million in operating profit, compared to a £1.7 million loss in Q1 2008, divested its loss-making UK mixing business and closed its protection and defence order book at £85 million, the company said.

“The group has returned to profit, and importantly has secured significant additional orders from both the US DoD (Department of Defense) and UK MoD (Ministry of Defence),” said Avon chief executive Peter Slabbert.

Total revenues for the protection and defence division were £31.4 million, compared to £10.9 million in 2008, generating £1.6 million in operating profit. The UK Protection and Defence business secured a £4,5 million order for £10 masks from the UK MoD, with the potential to reach £10 million over the three years of the contract, Avon said.

He went on to say that the company has also taken “difficult but necessary decision” to reduce costs in the UK Dairy business by out-sourcing production to the Czech Republic. Avon said the move would be complete by the end of 2009. The Dairy business recorded £12.7 million in revenue for the first six months of 2009, compared to £10.8 million in the same period the previous year. Avon said falling milk price in the second quarter led to a softer end to the period.

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Press release from Avon Rubber plc