Low & Bonar PLC Trading Update (6257T)

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RNS Number : 6257T

Low & Bonar PLC

16 October 2017

Low & Bonar PLC

Trading Update

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 31 May 2017.

The Building & Industrial business unit has continued to perform as expected during the second half, benefiting from a focused approach to niche market segments. End markets, particularly in North America remain positive and the Board expects this business to show strong year-on-year progress. We remain on track to complete the sale of the Lokeren based Agro-textiles operations.

Interiors & Transportation's solid performance has continued through the second half. Strong sales growth in China, with increasing demand from local customers, has generated good returns from the Changzhou facility. Price increases implemented in the first half are also benefiting the second half performance.

With operational issues in Coated Technical Textiles now firmly behind us, work on rebuilding customer relationships and restoring margins is progressing, while recovering raw material cost increases.

Market conditions for the Civil Engineering business remain challenging in the second half, and while year on year revenue is ahead on a constant currency basis, demand for higher value specification projects remains subdued, resulting in an adverse sales mix. Consequently, the expected improvement in financial performance and anticipated material reduction in inventory levels in the second half will not be achieved. Therefore, Civil Engineering is now not expected to make a profit for the year as a whole. As such, management is reviewing the Civil Engineering business and will make an objective assessment as to its ability to reach and sustain the Group's financial targets.

Raw material prices in the second half have been influenced by a number of factors, including the impact of the hurricanes in the US, and have remained at elevated levels rather than reducing as anticipated at the half year. Robust actions to recover this incremental cost through price increases have been taken in all business units along with cost saving initiatives, which have together reduced the impact on margins.

The Board continues to expect the Group to show good progress overall for the year to 30 November 2017.

16 October 2017

For further information, please contact:

 
Low & Bonar PLCBrett Simpson, CEO 
  Philip de Klerk, CFO              020 7535 3180 
 
Instinctif Partners 
 Matthew Smallwood 
 Helen Tarbet 
 Rosie Driscoll                     020 7457 2020 
 

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. 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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October 16, 2017 02:00 ET (06:00 GMT)