LONDON (Alliance News) - Low & Bonar PLC on Wednesday reported a 21% increase in pretax profit and said production issues within its Coated Technical Textiles unit were now "largely resolved".
The firm - which makes yarn for carpets, synthetic fibres and roofing products - posted pretax profit of GBP25.9 million for 2016, up from GBP21.4 million a year earlier. Results from the prior year were restated to exclude the results of discontinued operations, Low & Bonar said, referring to the sale of its artificial grass yarns business.
During the year revenue rose 11% to GBP400.0 million from GBP362.1 million, though on a constant currency basis revenue dipped 0.2% and Low & Bonar said it benefited from favourable foreign exchange gains during the year due to weaker sterling.
The group said it saw strong profit growth in its Building & Industrial, Civil Engineering and Interiors & Transportation divisions, and said margins were improving in all three businesses thanks to ongoing strategic initiatives.
However, profits were hit in its Coated Technical Textiles unit due to production issues, which, whilst largely resolved during the second half of the year, hit sales towards the end of 2016.
Low & Bonar said it was on track to exist its joint venture in Saudi Arabia Bonar Natpet and negotiations were "well underway" with its partner, though were progressing "more slowly than expected".
The group declared a final dividend of 2.00 pence per share, taking its total dividend for the year to 3.00p per share, up from 2.78p per share the prior year.
Low & Bonar said it expects market conditions to remain challenging in Europe, but said it was well-positioned, and expects North American markets to remain supportive and China to continue to develop.
Margins in its Coated Technical Textiles should recover through 2017.
"We enter 2017 in good shape with a strong platform for growth. We are confident of achieving further progress in 2017 and beyond for all of our businesses," said Chairman Martin Flower.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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