2nd Jul 2015 07:28
LONDON (Alliance News) - Performance materials company Low & Bonar PLC on Thursday said its pretax profit rose in the first half of its financial year, as an improvement in margins offset a fall in revenue caused by adverse currency translation.
The company, which makes yarns, fibres, industrial and coated fabrics and composite materials, said its pretax profit for the six months to the end of May was GBP7.4 million, up 42% from GBP5.2 million posted a year earlier.
Revenue for the group was down to GBP186 million from GBP196.3 million, primarily due to the impact of the weak euro, but favourable raw materials pricing in the period meant its operating margin improved to 6.8% from 5.9% to offset the currency challenges.
Low & Bonar said it made a profit in its interiors and transport, building and industrial and coated technical textiles businesses, while its sports and leisure arm is performing well and gaining market share, even as civil engineering markets remain tough, albeit stable. Still, the tough conditions in civil engineering meant profit from the division was significantly lower, while it has also seen slow progress at its Bonar Natpet joint venture in Saudi Arabia.
Still, the company said it would pay an interim dividend of 0.98 pence per share, up from 0.95 pence per share a year earlier.
"We have made steady progress in the first half buoyed by favourable raw material pricing. It is gratifying to see profit increases and market share gains in most sectors. Some of these gains have been offset by significantly lower profits in civil engineering and a slower than anticipated sales progression at Bonar Natpet," said Chairman Martin Flower.
The company said that while some challenges remain in view for the second half, it is confident it will meet its expectations for the full year.
Shares in Low & Bonar were down 4% in early trade on Thursday to 66.00 pence, one of the worst performers in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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