Peter Slabbert

Avon Rubber has announced a loss for the half year ending March 31 but expects to shortly complete final negotiations in a 10 year multi-million pound contract with the US military which will provide the basis for increased turnover and profitability in the second half of the year.

This should see the company make a profit for the year as a whole, reflecting the full benefit of this new deal.

Negotiations for the contract for the new M50 US military respirator have taken longer than expected but the five year contract with an additional demand for up to 10 is seen as an enormous achievement.

Avon Rubber chairman, Sir Richard Needham, said: "Although the market and shareholders will be disappointed with our first half results, the Board is confident that the company is close to receiving the multi-year order for the joint service general purpose mask from the US Government.

"It is not unusual for there to be teething problems with new and advanced programmes and we have experienced further unexpected delays. The order should deliver a long-term growing and profitable revenue stream for our operation to complement the already successful dairy business."

At the same time the Melksham based company announced that Terry Stead has decided to stand down as chief executive and will be succeeded by Peter Slabbert, finance director.

Mr Stead said: "Having completed the reorganisation from a mainly automotive business, and with the imminence of the multi-year order I feel now is the right time for the group to move forward under new leadership."

Mr Slabbert said: "I would like to pay tribute to Terry Stead's contribution to the company over 10 years as finance director and then CEO.

"He has overseen the repositioning of the company from a predominantly automotive business to one focused on international defence and dairy markets."

8:00am Friday 2nd May 2008

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