LWB.L Regulatory News (LWB)

14 January 2020

Low & Bonar PLC

Year-end update

Low & Bonar PLC ("Low & Bonar" or the "Group"), the international performance materials group, today issues updates on the Group's trading and financial position for the year ended 30 November 2019, and on the previously announced, and shareholder-approved, proposed acquisition of the Group by FV-Beteiligungs-GmbH ("Freudenberg") (the "Acquisition").

Trading and financial position

Further to the trading update of 20 September 2019, conditions affecting the Group's trading remained largely unchanged during the period to 30 November 2019. As a result, the Board currently expects, subject to audit, reported revenue for the year to 30 November 2019 from continuing operations to be £317m, underlying EBITDA to be approximately £18m and underlying profitability before taxation and amortisation to be approximately break-even (the "Low & Bonar Profit Estimate").

Net debt at 30 November 2019, subject to audit, was approximately £97m.

As announced on 10 October 2019, agreement was reached with Low & Bonar's lenders to amend the terms of the Group's financing facilities to assist the Company in progressing the Acquisition. As part of these amendments the testing of financial covenants as at 30 November 2019 was waived. As set out on 10 October 2019, should the Acquisition lapse, covenants would be reinstated and tested within 14 days with respect to the financial position as at the month-end previous to such lapse. In the event that the Acquisition does not complete by 30 June 2020, the scheduled covenant test as at 31 May 2020 would occur. Shareholders should note that there remains a significant risk that, should the financial covenants be tested, the Group would fail to comply.

Acquisition update

As announced on 5 November 2019, the Acquisition has been approved by the Group's shareholders. Competition approval remains the key outstanding condition to the completion of the Acquisition. The European Commission has confirmed that the transaction will be reviewed at the European level and this review is ongoing in the normal course. The competition approval required in Russia has been received.

Low & Bonar Profit Estimate

The Low & Bonar Profit Estimate constitutes a profit estimate for the purposes of Rule 28 of the Takeover Code. The Low & Bonar Directors confirm that the Low & Bonar Estimate is valid and has been properly compiled on the basis stated subsequently and on a basis consistent with the accounting policies of Low & Bonar. The Low & Bonar Directors prepared the Low & Bonar Profit Estimate on the basis of the unaudited management accounts of Low & Bonar for the year ended 30 November 2019.

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