LONDON (Alliance News) - Performance materials maker Low & Bonar PLC on Wednesday posted increases in revenue and profit in its first half, and said it remained confident of meeting its full year expectations, as its focus turns to resolving operational issues and finding a solution for its joint venture.
The company, which makes yarns, fibres, industrial and coated fabrics and composite materials, reported pretax profit of GBP8.3 million for the six months to May 31, up 6.4% from the GBP7.8 million posted for the same period a year earlier, driven by a 6.3% rise in revenue to GBP180.6 million from GBP169.9 million.
Low & Bonar said its Building & Industrial division performed "very strongly" and delivered 67% profit growth on a constant currency basis to GBP4.5 million from GBP2.7 million. This was largely thanks to a strong performance in the US, particularly of building products, which reflected a new customer win as well as good demand.
Meanwhile, the Civil Engineering division made a "good start" to the year, with profit up at GBP1.0 million from GBP300,000, whilst the Interior & Transportation division posted "very good profit growth" of 30% to GBP7.3 million from GBP5.6 million.
However, the Coated Technical Textiles division saw a mixed performance, with sales flat on a constant currency basis, and market conditions for its Bonar Natpet joint venture, in the Gulf Cooperation Council region remain "difficult" with activity levels "still very low".
Low & Bonar said it is continuing to work with its partner regarding the Bonar Natpet company to find a solution and avoid a further drag on group profitability, after the business made a loss of GBP1.2 million in the first half.
Low & Bonar said it will also look to resolve operational issues, such as manufacturing problems seen within the Coated Technical Textiles, during the second half. Taking into account the performance in the first half, Low & Bonar said it remains confident of meetings its expectations for the full year.
The company raised its interim dividend to 1.00 pence per share, from 0.98p per share, saying this reflected confidence in its long-term prospects.
"The group has continued to execute its strategy, with the start of production in China, the exit from grass yarns and the work to find a solution for Bonar Natpet. At the same time we are starting to realise the benefits of the reorganised business structure and leadership," said Chairman Martin Flower.
Shares in Low & Bonar were up 0.4% at 64.00p on Wednesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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