LONDON (Dec. 7) — Avon Rubber P.L.C. fell into the red in fiscal 2005 on the effects of restructuring charges in its automotive operations, but CEO Terry Stead said the reorganization should deliver "enhanced performance" over the coming two to three years.
Avon reported a pre-tax loss for the year ended Sept. 30 of $5.1 million on sales of $443.8 million. The restructuring involved closing a plant in Calaf, Spain, and reorganizing the group´s central and divisional management structures. The company also wrote off $3.3 million in bad debts following the demise of the MG Rover car-making operations and the Chapter 11 filing of Delphi Corp. in October.
In the automotive segment, sales increased by 5.5 percent while operating profit more than doubled. Restructuring costs, however, eliminated all this profit.
"The group is in a period of transition as we begin to realize the growth opportunities from our protection activities to alter the balance between automotive and protection and engineered products," Stead said. "We now have a streamlined organization focused on cash management and cost control."