25 Sep 2018 07:00
Low & Bonar PLC
Trading Update
25 September 2018
Low & Bonar PLC ("the Group"), the international performance materials group, today issues a trading update.
Sales volumes for the Group grew in-line with expectations in the third quarter. However, contrary to earlier expectations, prices of key polymers have increased further in the second half of the year. Our ability to pass on these cost increases continues to be held back by high levels of competition in most markets. Additionally, despite good progress being made in recent weeks in resolving Coated Technical Textiles' production issues, margins are lower than previously envisaged and recovery will take some time.
As a result, while further price increases and cost reductions are being implemented, full year profitability is now expected to be significantly lower than previously anticipated.
The Interiors & Transportation and Building & Industrial divisions continue to grow, though have been negatively impacted by persistently high levels of raw material costs and US freight cost inflation.
Civil Engineering's results continue to improve from a low base, reflecting ongoing efforts to reduce costs and increase sales. The sale process for this business is now underway, as previously announced.
Overhead costs have been significantly reduced in recent months, with the full benefits of this ongoing programme expected next year.
The focus on improved working capital discipline has continued, with progress evident in reducing inventory volumes. However, a combination of higher raw material costs and trading conditions are constraining the Group's ability to reduce net debt by the level previously anticipated.
The Board is confident that it is taking the right actions to build a stronger business.
Board changes
As previously announced, on 11 September, Martin Flower stepped down as non-executive Chairman and left the Board and was replaced by Daniel Dayan.
Simon Webb, Group Chief Financial Officer, has notified the Company that he wishes to leave the Company for personal reasons. He will continue in his role while a search for his successor is undertaken.
Capital markets day
In view of the Board changes and the ongoing Civil Engineering sale process, the capital markets day which was originally planned for Q4 2018 has been postponed to 2019.
For further information, please contact:
Low & Bonar PLC | 020 7535 3180 |
Philip de Klerk, Group CEO | |
Simon Webb, Group CFO |
Instinctif Partners | 020 7457 2020 |
Matthew Smallwood | |
Rosie Driscoll |
Notes:
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR") EU no.596/2014. Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
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 and may be beyond our ability to control or predict. All forward-looking statements in this announcement are based upon information known to the Group on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as at the date of this announcement. Forward looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition and liquidity may differ materially from those expressed or implied in 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. The Group's principal risks and uncertainties are described in greater the annual report. 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. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.