30th Jan 2019 08:54
LONDON (Alliance News) - Low & Bonar PLC on Wednesday reported an annual loss that widened dramatically due to what it called challenging operating and market conditions and increased costs. In response, it halved its dividend and announced a GBP54 million fundraising.
For the year ended November 2018, the performance materials group posted a pretax loss of GBP42.2 million compared to GBP19.7 million a year ago. The company's profit was "significantly impacted" by increased raw material and freight costs, Low & Bonar said.
Revenue slipped by 3.3% to GBP431.9 million from GBP446.5 million a year ago, mainly due to the disposal of the agro-textile business in the second half of 2017.
In line with the doubled loss, Low & Bonar halved its annual dividend, proposing a 1.42 pence per share payout for the year versus 3.05p in financial 2017. The final dividend amounted to 0.37p.
Looking ahead, the company said performance for the early part of 2019 was in line with expectations.
"It has been a tough year for Low & Bonar, but we have recognised and identified the issues within the business and have initiated improvement actions as part of the previously announced transformation programme," Chief Executive Officer Philip de Klerk said.
The company announced a GBP54 million equity raise, with the aim of "significantly" strengthening the balance sheet, allowing management to focus on delivering sustainable, profitable growth and to address a number of legacy issues.
The company will issue 359.6 million shares at 15 pence each, a 17% discount to the firm's closing price on Tuesday.
The company also will launch an open offer of shares on the basis of 106 open offer shares at 15p for every 107 existing shares.
Low & Bonar shares were trading down 7.7% at 16.71 pence each.
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