LWB.L Regulatory News (LWB)

LOW & BONAR PLC

Interim Management Statement

Low & Bonar PLC ("the Group"), the international performance materials group, today publishes its interim management statement for the period since 31 May 2012.

The Group's trading performance from its key businesses has continued as expected, with sales, profits and margins remaining comfortably ahead of last year on a constant currency basis. Following a strong first half, growth in Civil Engineering and Building Products markets has slowed as European construction customers have become more cautious. Sales growth within Flooring, Industrial and Transport segments has been satisfactory and consistent with the first half of the year.

The performance of the Yarns business has been affected by a further reduction in discretionary public funding for artificial sports pitches. As a result, sales, which account for 6% of the Group, have again been materially lower than the prior year. Despite the restructuring of the business, which significantly reduced the cost base and returned Yarns to profitability last year, the recent deterioration in market conditions will result in the business making a loss this year. Management is currently evaluating options to address this situation.

Overall, the Group continues to expect full year profits to be ahead of last year, driven by performance and ongoing investment in its key businesses; however, owing to the losses in Yarns, profits are expected to be slightly below current market expectations.

Throughout the year the Group has continued to invest for growth and to increase capability in its key businesses. Xeroflor, the green roofing business which was acquired in March 2012, has been successfully integrated into the Group and is performing well. The geotextile joint venture in Saudi Arabia will be operational within the next six months and the capacity expansion project to support continuing growth in the USA Flooring market is on schedule for completion this year. During the year, the Group will have spent over £22m in growth related investments. Year-end net debt is expected to be at a similar level to last year, in line with guidance.

Steve Good, Group Chief Executive, said:

"Our key businesses are performing well and we expect to make further progress this year, despite tough European markets and the adverse effects of a weaker Euro. We have continued investing in capacity and capabilities to extend our global reach and support future growth."

18 October 2012

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Forward looking statements

This announcement includes statements that are, or may be deemed to be, "forward looking statements". These forward looking statements can be identified by the use of forward looking terminology, including, but not limited to, the terms "believes", "estimates", "anticipates", "expects", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts.

By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition and liquidity may differ materially from the impression created by the forward looking statements contained in this announcement. In addition, even if the results of operations, financial condition, and liquidity are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: changes in the competitive framework in which the Group operates and its ability to retain market share; the Group's ability to generate growth or profitable growth; the Group's ability to generate sufficient cash to service its debt; the Group's ability to control its capital expenditure and other costs; significant changes in exchange rates, interest rates and tax rates; significant technological and market changes; future business combinations or dispositions; and general local and global economic, political, business and market conditions. In light of these risks, uncertainties and assumptions, the events described in the forward looking statements in this announcement may not occur.

Other than in accordance with its legal or regulatory obligations, the Group does not undertake any obligation to update or revise publicly any forward looking statement, whether as a result of new information, future events or otherwise.