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13 Apr 2018 07:00
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Low & Bonar PLC
Trading Update First Quarter
Low & Bonar PLC ("the Group"), the international performance materials group with leading positions in niche industrial markets, today issues a trading update for the period since 30 November 2017.
Group revenue has increased in the first quarter of the year, despite challenging market conditions in Europe and the USA, led by growth in both the Building & Industrial and Interiors & Transportation businesses albeit with a slightly unfavourable product mix. Raw material cost increases have had a negative impact in the first quarter and actions have been taken to mitigate these through increased selling prices, although the benefit of this is likely to be realised in the second half.
The actions from the first stage of the Civil Engineering review are being implemented:
- the Ivanka site ceased production at the end of March, as planned, and the process to sell assets and inventory is underway;
- the Enkamat business is being transferred to the B&I division, although it will take some time to be fully integrated; and
- a new management team has been in place since 1st March to lead the remaining parts of the Civil Engineering business, Needle-Punched Non-Woven and Construction Fibres with a focus on improving performance.
As previously stated, the outcome of the second stage of Civil Engineering business review will be announced at the time of the Group's interim results in July.
Initial progress has been made on solving the production consistency issues in Coated Technical Textiles, however there is still further work to be done and a new management team is in place to deliver this. More generally within the Group, cost saving initiatives have been commenced which should provide the Group with a more effective operational structure.
Actions to strengthen the balance sheet have commenced and a renewed focus on working capital improvement is being embedded in the organisation from which we continue to expect to see benefits this financial year. As part of this programme, production at some manufacturing sites has been reduced in order to better manage inventory levels, which has had a negative impact on cost recoveries. As expected, the level of working capital and overall Group financial leverage will increase in the first half as part of the normal seasonality of the business.
In light of the above factors, whilst the Board's expectations for the full year remain unchanged, it expects the Group's financial results to have a much greater weighting to the second half than in the prior year. The Board is confident that it is taking the right actions to improve performance and create a strong long term growth platform for the Group.
For further information, please contact:
Low & Bonar PLC
Philip de Klerk, Group Chief Executive 020 7535 3180
Instinctif Partners
Matthew Smallwood 020 7457 2020
Helen Tarbet
Rosie Driscoll
Forward-looking statement
This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of Low & Bonar PLC. By their nature, future events and circumstances can cause results and developments to differ from those anticipated. Nothing in this announcement should be construed as a profit forecast. No undertaking is given to update any forward-looking statement whether as a result of new information, future events or otherwise.
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