An improved performance from Low & Bonar (LWB) was overshadowed by news that chief executive Steve Good is to retire later this year. However, the specialist materials group is now starting to see the benefits of his efforts to reshape the company. Adjusted pre-tax profits rose by 6.5 per cent to £26.1m, a better measure of the group's performance than last year's headline figures, which were distorted by an £11.2m provision in the yarns business. Since then, thanks to a large dose of self help, the yarn operation has managed to increase sales by 21.4 per cent in constant currency terms and deliver a modest profit.
One measure of the group's improving performance was the mid-year reversal in the sales performance. Like-for-like sales fell 1.1 per cent year-on-year in the first half, mainly as a result of bad weather, but grew by 5.1 per cent in the second half.
The group is now focusing on three areas: bolt-on acquisitions, capital spending and structural changes. The first of these saw the acquisition of geosynthetic product specialist Texiplast for £15.9m, funded through a share placing that raised £19.8m.
Analysts at Numis are forecasting underlying pre-tax profits for the coming year of £30.5m and EPS of 6.7p (from £25.3m and 6p in 2013).
| LOW & BONAR (LWB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 86p | MARKET VALUE: | £281m | |
| TOUCH: | 84-86p | 12-MONTH HIGH: | 87p | LOW: 58p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 57p* | NET DEBT: | 45% | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 305 | 0.7 | -0.4 | 0.8 |
| 2010 | 345 | 10.2 | 2.2 | 1.6 |
| 2011 | 389 | 23.4 | 6.5 | 2.1 |
| 2012 | 381 | 6.1 | 0.5 | 2.4 |
| 2013 | 403 | 17.8 | 4.1 | 2.6 |
| % change | +6 | +192 | +720 | +8 |
Ex-div: 19 Mar Payment: 17 Apr *Includes intangible assets of £115m, or 35p a share | ||||
