LONDON (Alliance News) - Low & Bonar PLC on Tuesday said annual profit is set to be lower than expected due to increased cost of key materials.
Shares were 22% lower on Tuesday morning at a price of 40.06 pence each.
Low & Bonar, which makes advanced materials using polymer-based yarns and fibres, said the price of key polymers has unexpectedly increased during the second half of its financial year ending November 30.
High competition means the firm has been unable to pass on these costs to customers, despite sales rising as expected.
These issues, Low & Bonar added, mean it has also been unable to reduce its debt as quickly as planned.
Margins have been further hit by its Coated Technical Textiles business's ongoing production issues. Margin recovery is expected to "take some time".
Looking at other divisions, Civil Engineering is improving, though a sales process for the arm is still ongoing, as previously announced.
In Interiors & Transportation and Building & Industrial the company is achieving growth, though both have been hit by higher costs and US freight cost inflation.
Further, Low & Bonar also said Tuesday that Chief Financial Officer Simon Webb will be leaving for personal reasons. It did not give a date for his departure, but said Webb, who only started the role in April, will stay until a successor is found.
