Low & Bonar (LWB) gave an early indication last September that profits would take a hit in the full year to November. Investors therefore cheered news that the company had in fact maintained operating profits at £31.7m, against £31.4m a year earlier. The shares rose 8 per cent on results day.
Sales in flooring - up 6.7 per cent - and technical coated fabrics - up 8.8 per cent - both delivered decent growth. It was instead on the civil engineering side that the specialist materials group found the going hard. Sales in mainland Europe, which account for around a quarter of the group total, were hit by a very weak second half, particularly in Poland. Procedural delays in gaining product approval also hit sales in Saudi Arabia, resulting in a £1.1m loss for its joint venture in the country. Happily, approvals are now starting to come through.
In the yarns division, which supplies the materials for artificial grass, sales rose by 14 per cent on a constant-currency basis. At 2.2 per cent, however, operating margins remained well below target, and measures are in place to improve operational efficiency. These include setting up facilities in China, where full production is expected to start next year.
Analysts at broker Peel Hunt are forecasting adjusted pre-tax profits of £26m and EPS of 5.7p (from £25.5m and 5.6p in 2014).
| LOW & BONAR (LWB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 58.5p | MARKET VALUE: | £192m | |
| TOUCH: | 58-59p | 12-MONTH HIGH: | 96p | LOW: 44p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 56p* | NET DEBT: | 46% | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 | 16.7 | 3.7 | 2.6 |
| 2014 | 411 | 16.7 | 3.5 | 2.7 |
| % change | +2 | - | -6 | +4 |
Ex-div: 19 Mar Payment: 16 Apr *Includes intangible assets of £106m, or 32p a share | ||||
