Final Results

Low & Bonar PLC

Preliminary Results for the year ended 30 November 2010

STRONG PERFORMANCE, ACTIONS TAKEN TO SUSTAIN PROGRESS

Low & Bonar PLC ("Low & Bonar" or "the Group"), the international performance materials group, today announces its preliminary results for the year ended 30 November 2010.

Highlights

2010 2009

Revenue £344.6m £304.8m + 13%

Operating margin* 7.5% 7.3% + 20bps

Profit before tax* £ 18.6m £ 15.8m + 18%

Basic earnings per share* 4.41p 4.35p + 1%

Profit before tax (statutory) £ 10.2m £ 0.7m

Full year dividend 1.6p 0.8p

Net debt £ 62.0m £ 67.4m

* continuing operations, before amortisation and non-recurring items

§ Underlying sales up 15% producing underlying profit growth of 22%, after adjusting for foreign exchange movements

§ Further recovery in most markets augmented by organic growth initiatives

§ Improving operating margins in tough raw material markets

§ Balance sheet strengthened by good cash generation and successful refinancing

§ Full year dividend increased to 1.6p, representing an effective increase of 33%

§ Restructuring of Yarns business on track to return business to profitability in 2011

§ Saudi civil engineering JV in place to accelerate exposure to high growth emerging markets

Martin Flower, Chairman, said:

"Following a year in which partial recovery in many of the Group's end markets was augmented by organic growth, we are now in a good position to push ahead with our initiatives to deliver margin improvement and growth in our chosen niche markets and geographies. The success of these initiatives is not reliant on further market recovery and the Board is therefore confident of continuing to make progress in 2011."

For further information, please contact:

Low & Bonar PLC 020 7535 3180

Steve Good, Group Chief Executive

Mike Holt, Group Finance Director

MHP Communications

Andrew Jaques / Rachel Hirst / Ian Payne 020 3128 8100

Chairman's Statement

I am very pleased to report a significant improvement in the Group's results and overall financial position for the year ended 30 November 2010. Important actions have also been taken to enable the Group to deliver its future growth plans.

Profit before tax rose 22% to £18.6m (2009: £15.8m) on revenues up 15% at £344.6m, after adjusting for foreign exchange movements. This significant sales increase was driven by a partial recovery in many of the Group's end markets and was augmented by organic growth from innovation and our increasing exposure to emerging markets. Operating margins also improved to 7.5% (2009: 7.3%) despite the adverse impact of a timing lag in adjusting selling prices to significantly higher raw material costs throughout the year.

Results highlights

2010 2009

Revenue £344.6m £304.8m

Operating margin* 7.5% 7.3%

Profit before tax* £ 18.6m £ 15.8m

Basic earnings per share* 4.41p 4.35p

Profit before tax (statutory) £ 10.2m £ 0.7m

Full year dividend 1.6p 0.8p

Net debt £ 62.0m £ 67.4m

* continuing operations, before amortisation and non-recurring items

Further commentary on these results and the divisional performances is contained in the Business Review.

Positioned for further growth

During the year the Group has taken actions which we are confident will restore to profitability our loss-making Yarns business. We successfully commissioned a new manufacturing facility for artificial grass yarns in Abu Dhabi and we are closing the Ostend site and transferring its business to Abu Dhabi. This project is progressing to plan.

We have also accelerated efforts to access higher growth emerging markets. In January 2011 the Group signed a 50:50 joint venture in Saudi Arabia with National Petrochemical Industrial Company (NATPET). The joint venture will design, manufacture and sell geotextile products for the fast growing civil engineering markets in the Middle East and the Indian subcontinent.

The Group has continued to invest in innovation to drive growth in its core Western European and North American markets. A number of new products have been launched and, in 2010, over 14% of sales came from products developed within the last three years. The Group's development pipeline continues to improve.

Strengthened financial position

As a result of an improved trading performance and a clear strategic focus, the Group completed a €45m debt private placement with Pricoa Capital Group, in September 2010, for a term of six years. This contributed to a very successful refinancing of committed banking facilities shortly after the year end for a four and a quarter year term at competitive rates. The Group's debt structure is now much stronger and more balanced, providing a solid and flexible platform to support the Group's growth agenda.

Increased dividend

Following the strong trading and cash flow performance during the year the Board is recommending a final dividend of 1.1p. This doubles the total dividend for the year compared to 2009 to 1.6p and is covered 2.8x by earnings before amortisation and non-recurring items. The increase reflects the Board's confidence in the Group's future growth prospects and the Board's intent to follow a progressive dividend policy with cover of at least 2x earnings. The final dividend will be paid on 21 April 2011 to shareholders on the register at 25 March 2011.

People

On 22 November 2010, I was delighted to be able to invite Mike Holt to join the Board as our new Group Finance Director.  Mike had been Group Finance Director of Vp plc, the specialist equipment rental group, since 2004. Prior to that, he held a number of senior financial positions with Rolls-Royce Group plc within the UK, the USA and Hong Kong.  Mike's breadth of experience and international perspective will be real assets for the Group. 

Outlook

Following a year in which partial recovery in many of the Group's end markets was augmented by organic growth, we are now in a good position to push ahead with our initiatives to deliver margin improvement and growth in our chosen niche markets and geographies. The success of these initiatives is not reliant on further market recovery and the Board is therefore confident of continuing to make progress in 2011.

Martin Flower

8 February 2011

Business Review

Low & Bonar PLC is an international performance materials group using proprietary technologies to engineer polymers for a wide range of applications in niche industrial markets.

Review of 2010 Group trading and results

* before amortisation and non-recurring items

The Group's revenues increased by 13% to £344.6m (2009: £304.8m). Underlying like for like sales, at constant currency rates, increased by 15% compared to last year with double digit growth in the civil engineering, carpet, transport and leisure markets. Operating margin improved to 7.5% despite inflationary raw materials markets creating headwinds throughout the year. The improvement in sales and margin has led to a very pleasing 22% increase in underlying profit before tax, amortisation and non-recurring items.

Basic earnings per share before the amortisation of intangibles and non-recurring items increased from 4.35 pence to 4.41 pence, an increase of 1%; the overall increase being impacted by a 15% increase in the weighted average number of shares following the placing and open offer in March 2009. Basic earnings per share on a statutory basis was 2.19 pence compared with a loss from continuing operations of 0.41 pence last year.

Non-recurring costs of £1.6m were incurred during the year (2009: £7.8m), being non-recurring costs of £7.0m relating to the Yarns business restructuring, less non-recurring income of £5.4m relating to the release of the provision for pension equalisation. The restructuring of the Yarns business is progressing well, in line with the plan that we set out in October 2010.

Significant growth in sales

There have been a number of factors which have contributed to the 15% increase in underlying sales. The Group has benefited from a partial recovery in most of its markets, particularly those which were most affected during last year's economic downturn. Transport, carpet manufacturing and leisure markets have recovered strongly, albeit still below their 2008 peak. Our activities in civil engineering, our most robust market last year, have grown strongly in both emerging markets and in our core European business. Building product sales edged higher but remained adversely affected by weak residential and commercial building markets.

The investments which the Group is making in innovation to deliver market share gains and in developing its presence in high growth emerging markets have also made important contributions to this year's sales performance. The returns from innovation are improving and sales outside our heartland of Western Europe and North America grew by 17% this year and now represent more than 21% of Group sales. China and Eastern Europe have been particularly strong.

Operating margins moving forward

Operating margins increased to 7.5% (2009: 7.3%). The positive operational gearing effect of higher sales volumes was lower than anticipated as a result of challenging raw material markets where prices rose throughout the year. Operating margins were adversely affected by the lag effect of implementing price adjustments and in some markets, which have yet to fully recover, adjustments have remained challenging. In 2009 this lag effect benefited margins as raw material prices trended downwards.

The full year benefits from cost saving measures taken last year also contributed to margin growth, however some re-investment has been required during the year to enable the Group to successfully respond to the recovery in demand and to put in place the building blocks for medium-term sales growth and margin expansion.

Strong cash generation and successful refinancing

During the year the Group generated £36.6m (2009: £46.0m) of cash from operations, a cash conversion ratio to underlying operating profits of 142%. Despite increased trading activity, the Group further improved its working capital management, reducing net trade working capital to 22% of sales from 28% last year. This, together with another modest year of capital expenditure, reduced net bank borrowings by £5.4m to £62.0m and improved underlying gearing (net debt/EBITDA) to 1.6 times (2009: 1.9 times), well within borrowing covenants. During the year, the Group also settled £9.3m of cross currency swap liabilities to de-risk and simplify its debt profile.

As a result of an improved trading performance and a clear strategic focus, the Group completed a €45m private placement with Pricoa Capital Group, in September 2010, for a term of six years. This contributed to a very a successful refinancing of committed banking facilities shortly after the year end for a term of four and a quarter years at competitive rates. The Group's debt structure is now much stronger and more balanced, providing a solid and flexible platform to support the Group's growth agenda.

Good progress towards our targets

At the start of the year the Group set out a clear objective to deliver profitable, cash generative growth and highlighted a number of specific targets which we believed to be achievable in the medium-term. The Group has made a good start in 2010, delivering significant growth in both sales and profits, achieving further reductions in net debt despite a sharp increase in activity levels, and making progress towards all medium-term growth, margin and asset efficiency targets.

Actions in place to make further progress

During the year the Group has taken actions which we are confident will restore to profitability our loss-making Yarns business. We successfully commissioned a new manufacturing facility for artificial grass yarns in Abu Dhabi and, in December 2010, this enabled the Group to confirm the closure of its Ostend site and the transfer of business to the newly constructed Abu Dhabi plant. The closure and relocation project is progressing to plan. The restructuring of the business will regrettably result in redundancy for the majority of employees at the Ostend site. A social plan was agreed with their representatives in December 2010.

We have also accelerated efforts to access higher growth emerging markets. In January 2011, the Group signed a 50:50 joint venture in Saudi Arabia with National Petrochemical Industrial Company (NATPET). The joint venture will design, manufacture and sell geotextile products for the fast growing civil engineering markets in the Middle East and the Indian subcontinent. A new manufacturing plant will be constructed at a site near NATPET's polypropylene production facility in Yanbu and will benefit from a long term supply agreement with NATPET. The joint venture is well positioned to take full advantage of the forthcoming infrastructure investment in these regions given its unparalleled technological, marketing and raw material strengths.

The Group has continued to invest in innovation to drive growth in its core Western European and North American markets Innovation is focused on providing our customers with products which improve sustainability, increase functionality and maximise efficiency. The Group's development pipeline continues to improve. Products made from recycled materials and raw materials from renewable resources have been launched in the carpet tile backing and agrotextile markets. Architectural membranes which last longer and have self-cleaning properties have recently been developed. Construction fibres continue to grow strongly in the construction market.

We are in a strong position to push ahead with our initiatives to deliver margin improvement and growth and are confident about making further progress in 2011. This progress is not reliant on a further recovery in markets.

Performance Technical Textiles Division

Our Performance Technical Textiles division (comprising Colbond, Technical Fabrics, Yarns and Yihua Bonar) supplies products such as geotextiles, artificial grass yarns, carpet tile backing and construction fibres to the civil engineering, carpet tile manufacturing, leisure and construction sectors.

2010 2009

Revenue £239.2m £212.3m

Operating profit* £ 19.1m £ 17.1m

Operating margin* 8.0% 8.1%

* before amortisation and non-recurring items

Sales were 13% higher than last year. However, adjusting for adverse foreign exchange movements, underlying sales improved by 15%. Operating margins were broadly flat year on year but were higher in the second half of the year as increased selling prices compensated for raw material price inflation which was high in the first half of the year.

Our civil engineering business, which was our most robust activity throughout the economic crisis, grew by 15% with sales improving in both our heartland and emerging markets. We are accelerating our efforts to access higher growth emerging markets. The recent announcement of the Saudi Arabian joint venture will enable us to access the fast growing civil engineering markets in the Middle East and the Indian subcontinent.

Carpet manufacturing sales increased by 25% driven by recovering markets, strong growth in China and positive substitution effects which assisted our tile backing sales as they take a larger share of the floor coverings market. The transport sector also grew strongly, consolidating the market share gains secured with the launch of our new Colback Pro product last year and responding to the improved performance of the premium brand automotive manufacturers. Sales in the artificial grass market improved, however activity levels in our traditional building product applications remained weak with demand yet to recover in European and US commercial and residential building markets.

We have taken actions during the year which will restore profitability to our loss-making Yarns business. The Group successfully commissioned a new manufacturing facility for artificial grass yarns in Abu Dhabi. In December 2010, this enabled the Group to confirm the closure of its Ostend site and the transfer of business to the Abu Dhabi plant. The closure and relocation project is progressing to plan and will lead to an improvement in divisional margins.

The strong recovery in our carpet and transport sectors, together with a growing contribution from new product and application areas, has resulted in the Group approving investments during the year to increase capacity in Europe, the US and China. This will enable the division to follow planned growth in these sectors from the second half of 2012.

Our innovation capability continues to improve. Carpet backing made from 100% recycled materials and groundcovers made from raw materials from renewable resources which duplicate the durability and flexibility of synthetic materials have recently been launched. A new civil engineering product which provides advanced drainage and lost shuttering was chosen for a major high speed railway project because of its proven ability to also absorb noise and vibration. Our new macro construction fibres continue to make inroads into the reinforced concrete market, replacing steel mesh on the basis of reduced time, costs and aesthetics.

The division is well positioned to grow with innovative products in its attractive heartland markets and is accelerating its exposure to emerging markets which have significant growth opportunities for its existing products and technologies.

Technical Coated Fabrics Division

Our Technical Coated Fabrics division, essentially consisting of Mehler Texnologies (MTX), supplies products such as side curtains for lorry trailers, advertising banners, tensioned structures, awnings, marquees and tarpaulins to the print, architectural and transport markets.

2010 2009

Revenue £105.4m £ 92.5m

Operating profit* £ 9.7m £ 8.0m

Operating margin* 9.2% 8.6%

* before amortisation and non-recurring items

Sales increased by 14% in the year. However, adjusting for foreign exchange, the improvement was 16.5%. The sales pattern improved after a slow first quarter with growth in emerging markets augmenting recovery during the year. Operating margins increased to 9.2% from 8.6% last year with improving operating efficiencies and volume growth both contributing. The onset of significant raw material price inflation in the second half of the year had an adverse effect on margins in that period as selling price adjustments lagged cost inflation.

Sales recovered well in the trailer market with the new build segment improving during the year. The replacement market remains subdued and overall demand still remains materially below pre-economic crisis levels. Leisure and architecture markets also recovered well, with growth supplemented by improved products securing higher market shares in Eastern Europe and Asia. The print market remained weak and, in the lower quality segment, volumes suffered somewhat from low price competition.

The strongest growth region has been Asia. Sales increased in the Middle East and India in architectural membrane markets for both shading and stadia applications. Product development to extend the lifetime, functionality and recyclability of these membranes will make a strong contribution to future growth.

In addition to the focus on emerging market growth, the new management team continue to improve operational and asset efficiencies. Further progress was made in the year in throughput, reducing and recycling waste and optimising energy consumption. It is encouraging that we have additional opportunities to improve efficiencies in the division which, together with emerging market growth, will contribute to sales and margin expansion in the future.

Financial Review

Consolidated income statement

The key items in the consolidated income statement are further highlighted in the sections below.

Underlying revenue and profit performance

On a constant currency basis, underlying sales and profits before tax, amortisation and non-recurring items were 15% and 22% ahead of last year respectively as set out below.

Interest charges

Interest charges before non-recurring items were marginally higher than last year at £4.9m (2009: £4.8m). Notional pension interest (under IAS19) increased from £1.5m to £2.3m during the year.

Non-recurring items

Non-recurring costs of £1.6m were incurred during the year. Costs relating to the restructuring of the Yarns business totalled £7.0m, including £0.6m of start up costs for the Abu Dhabi production site in which we have a 75% economic share. These costs have been partially offset by a release of £5.4m in relation to the provision set up in 2008 to cover anticipated liabilities associated with a possible failure to properly equalise the retirement ages of men and women for members of the Group's main UK pension scheme following the "Barber decision" in 1990. In April 2010, the Scottish Court of Session determined that equalisation had been effective.

Taxation

The overall tax charge on the profit before tax was £3.8m (2009: £1.9m). The tax charge on underlying profit was £5.8m (2009: £5.0m), a rate of 31% (2009: 32%). The underlying tax rate for 2011 is expected to be around 31% as previously indicated.

The operation of most tax systems, including the availability of specific tax deductions, means that there is often a delay between the Group tax charge and the related tax payments, to the benefit of cash flow. Cash payments in relation to tax were £3.3m (2009: £5.4m).

The Group operates internationally and is subject to tax in many differing jurisdictions. As a consequence, the Group is routinely subject to tax audits and examinations which, by their nature, can take a considerable period to conclude. Provision is made for known issues based on management's interpretation of country specific legislation and the likely outcome of negotiation or litigation. The Group believes that it has a duty to shareholders to seek to minimise its tax burden but to do so in a manner which is consistent with its commercial objectives and meets its legal obligations and ethical standards. The Group has regard for the intention of the legislation concerned rather than just the wording itself. The Group is committed to building open relationships with tax authorities and to follow a policy of full disclosure in order to effect the timely settlement of its tax affairs and to remove uncertainty in its business transactions. Where appropriate, the Group enters into consultation with tax authorities to help shape proposed legislation and future tax policy.

Headline corporate tax rates in our major operating territories were:-

Cash

There was a net cash inflow of £5.4m (2009: £6.9m, excluding proceeds from share issues) during the year, decreasing net bank borrowings from £67.4m to £62.0m. The overall external debt of the Group, including derivative liabilities, also reduced from £103.6m to £77.9m, reflecting a partial settlement of derivative liabilities totalling £9.3m and the strengthening of the Euro which provided an overall reduction of £10.4m in the Group's total external debt.

The analysis of the Group's total external debt is as follows:

Cash generated from operations totalled £36.6m (2009: £46.0m). Working capital reduced by £0.5m (2009: £17.1m), with further improvements in management control offsetting volume pressure during a period of increased trading activity. This improvement reduced the funds tied up in net trade working capital to 22% of revenues from 28% last year. Capital expenditure totalled £7.4m compared with £8.2m in the prior year.

Treasury management

The Group finances its operations through a mixture of shareholders' funds, bank borrowings and operating leases. The Group operates centralised treasury management over its financial risks within a strong control environment. The Group uses various financial instruments in order to manage the exposures that arise from its operations. It is the Group's policy not to trade financial instruments or to engage in speculative transactions. All funding is properly recognised on the balance sheet. The Board has approved the treasury policy and receives regular reports on compliance. The objectives of the Group's treasury policy are summarised below:

To meet the liquidity requirements of the Group cost effectively.  The Group aims to maintain undrawn committed facilities at a level sufficient to ensure that the Group has available funds to meet its medium-term funding needs and to minimise the level of surplus cash balances. The Group operates a conservative investment policy and short-term deposits are placed with highly rated counterparties.

To deliver the funding demands of the business at low cost. The Group funding requirements are largely driven by capital expenditure and acquisition activity. In September 2010, the Group borrowed €45m through a private placement with Pricoa Capital Group. The funding is unsecured and is repayable in September 2016. The coupon rate is 5.9% per annum and is fixed for the term of the loan. This paved the way for the committed banking facilities to be refinanced and this was completed shortly after year end. The Group cancelled and repaid its existing bank facilities of £140.4m (2009: £144.9m) and now has a €130m committed loan facility with a syndicate of five leading banks. The facility is unsecured and is committed through to February 2015. The interest rate is variable and the margin varies according to the ratio of net debt to EBITDA and is 1.9% at the current and intended range of operations.

Both the private placement and the new committed loan facility require the Group to operate with an interest cover of at least 3 times and for net debt not to exceed 3 times EBITDA on a 12-month rolling basis. For the year ended 30 November 2010, interest cover was 5.2x (2009: 4.6x) and net debt/EBITDA was 1.6x (2009: 1.9x). The aim of the Group is to operate below net debt/EBITDA of 2.0x.

To provide reasonable protection against interest rate and foreign currency volatility.  The Group's strategy seeks a balance between fixed and floating rate borrowings, to achieve a reasonable effective interest rate whilst protecting the Group against material adverse changes in interest rates over the medium-term. At 30 November 2010, the Group had fixed the interest rates of £79.4m (2009: £45.7m) of debt representing 89% (2009: 38%) of its total gross external debt, the increase in the year being achieved through the private placement in September 2010.

The Group is exposed to movements in exchange rates for both foreign currency transactions and the translation of net assets and income statements of foreign subsidiaries. The Group regards its interest in overseas subsidiary companies as long-term investments and manages its translational exposures through the matching of assets and liabilities where possible. The private placement and the bank refinancing have provided a much better matching. The matching will be reviewed regularly and appropriate risk mitigation performed where necessary. The Group has exposure to a number of foreign currencies. The most significant transactional currency exposure is Euro/US dollar.

To develop and maintain strong and stable banking relationships. Strong working relationships are maintained with a core group of high-quality banks whose geographical span of operations closely aligns to those of the Group. Five of these banks (The Royal Bank of Scotland, Barclays Corporate, KBC, ING and Comerica Bank) participated in the new €130m loan facility.

Pensions

The charges for pensions are calculated in accordance with the requirement of IAS19 Employee Benefits. During the year, the Group's UK benefit scheme, which accounts for 69% of the overall net liabilities, continued to adopt a lower risk investment strategy in which the interest rate and inflation risks were more closely hedged and the exposure to equities reduced to around 25% of the schemes assets (2009: 29%). The deficit has fallen compared to 2009, principally due to additional cash contributions from the Group of £3.0m (2009: £3.0m) with the increase in expected returns from investments compensating for increasing the allowance for life expectancy.

Acquisitions

There have been no acquisitions or disposals in the period.

Foreign exchange rates

The key foreign exchange rates used by the Group are:

Accounting standards

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU. In 2009/10, the only change which had a significant effect on the Group's financial statements related to the Amendment to IAS 1. Whilst this amendment changed the presentation of performance reporting, it has not affected the results reported.

A summary of other less significant changes and full details of accounting policies are provided in Note 1 to the Preliminary Announcement.

Share price

During the year the Company's share price increased by 26% from 33.5 pence to 42.3 pence, compared to a 10% increase in the FTSE small cap index. The Company's shares ranged in price from 28.8 pence to 49.0 pence and averaged 36.2 pence during the year. The average number of shares in issue was 287.9m (2009: 250.4m), an increase of 15% due to the share issue in March 2009.

Risks and uncertainties

Responsibility statement of the Directors on the Annual Report and Accounts

The responsibility statement below has been prepared in connection with the Company's full Annual Report and Accounts for the year ended 30 November 2010. Certain parts thereof are not included within this Preliminary Announcement.

The Directors confirm, to the best of their knowledge that:

·; the financial statements, prepared in accordance with IFRS, as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation as a whole; and

·; the management report, which comprises the Chairman's Statement and the Business Review, includes a fair review of the development and performance of the business and of the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Directors

The Directors of the Company are:

Martin Flower, Chairman

Steve Good, Chief Executive Officer

Mike Holt, Group Finance Director

Steve Hannam, Non-Executive Director

Folkert Blaisse, Non-Executive Director

Chris Littmoden, Non-Executive Director

Related party transactions

There are no related party transactions requiring disclosure.

Steve Good Mike Holt

8 February 2011 8 February 2011

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.

Consolidated Income Statement

for the year ended 30 November

Consolidated Statement of Other Comprehensive Income

for the year ended 30 November

Consolidated Balance Sheet

as at 30 November

Consolidated Cash Flow Statement

for the year ended 30 November

Consolidated Statement of Changes in Equity

for the year ended 30 November

1. Basis of preparation

The financial statements are presented in pounds sterling, rounded to the nearest hundred thousand pounds. They are prepared on the historical cost basis except for the revaluation to fair value of certain financial instruments.

The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU (adopted IFRS). During the year, the Group has adopted:

·; Amendment to IAS 1 Presentation of financial statements - a revised presentation. This requires presentational changes to the financial statements. Since this change is presentational only, there is no impact on profit or earnings per share.

·; Amendment to IFRS 7 Improving disclosures about financial instruments. As this amendment is concerned with disclosure, there is no impact on the Group's results.

·; IFRS 3 (revised) Business combinations. There is no impact on the Group's results for the year ended 30 November 2010 since there were no acquisitions in the period.

·; Amendment to IAS 27 Consolidated and separate financial statements. Adoption of this amendment has not resulted in any significant impact on the Group's results.

·; Amendments to IAS 32 and IAS 1 Puttable financial instruments and obligations arising on liquidation. There is no significant impact on the Group.

·; Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Eligible hedged items. There is no significant impact on the Group.

·; Amendments to IAS 39 and IFRIC 9 Embedded derivatives. There is no significant impact on the Group.

·; Improvements to IFRS 2009. None of these amendments have impacted the Group significantly.

·; IFRS 8 Operating Segments. This introduces the "management approach" to segment reporting. The standard is concerned with disclosure only and has no impact on the Group's results.

·; Amendment to IFRS 2 Share-based payment - Vesting conditions and cancellations. There is no significant impact on the Group.

·; IFRIC 14 The Limit on a Defined Benefit Asset. There is no significant impact on the Group.

·; IFRIC 15 Agreements for the construction of real estate. There is no significant impact on the Group.

·; IFRIC 17 Distribution of non-cash assets to owners. There is no significant impact on the Group.

·; IFRIC 18 Transfer of assets to customers. There is no significant impact on the Group.

At the date of authorisation of these financial statements, there are a number of Standards and Interpretations in issue but not yet effective and which have not yet been applied in these financial statements. The Directors anticipate that adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Group.

The annual report and financial statements for the year ended 30 November 2010 were approved by the Board of Directors on 8 February 2011 along with this preliminary announcement, but have not yet been delivered to the Registrar of Companies. The financial information contained in this preliminary announcement does not constitute the Group's statutory accounts within the meaning of Section 434 of the Companies Act 2006. The auditor's report on the statutory accounts for the year ended 30 November 2010 was unqualified and did not contain a statement under section 498 of the Companies Act 2006. The statutory accounts of Low & Bonar PLC for the year ended 30 November 2009 have been delivered to the Registrar of Companies. The auditor's report on the statutory accounts for the year ended 30 November 2009 was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2. Segmental information

For the purposes of management reporting to the chief operating decision maker, the Group is organised into two reportable operating divisions - Performance Technical Textiles and Technical Coated Fabrics. Segment assets and liabilities include items directly attributable to segments as well as those that can be allocated on a reasonable basis.

The Group's principal activities are in the international manufacturing and supply of those performance materials commonly referred to as technical textiles. The global technical textiles industry comprises, inter alia, fibres, yarns, woven fabrics and non-woven fabrics serving diverse markets such as the hygiene, automotive, construction, industrial and healthcare markets. The Group's business is focused on two areas of activity in the international technical textiles industry: the production and supply of (a) performance technical textiles and (b) technical coated fabrics for use in the transport, print and architectural markets.

Unallocated items comprise mainly cash and cash equivalents, interest bearing loans, borrowings, derivative assets and liabilities, post-employment benefits, taxation balances and corporate assets and expenses. Intra-segment sales are not material.

3. Financial income and financial expense

4. Taxation

5. Dividends

Amounts recognised as distributions to equity holders in the year

The Directors have proposed a final dividend in respect of the financial year ended 30 November 2010 of 1.1p which will absorb an estimated £3.2m of shareholders' funds. Conditional on approval by shareholders at the Annual General Meeting to be held on 31 March 2011 and accordingly not accrued in these accounts, it will be paid on 21 April 2011 to shareholders who are on the register of members at close of business at close of business on 25 March 2011.

6. Non-recurring items

During the year the Group incurred significant non-recurring items as detailed below

During the year ended 30 November 2010, costs of £6.4m were incurred in connection with restructuring of the loss-making Technical Yarns business. The closure of the Ostend facility and a social plan for the workforce has been agreed with employee representatives. Manufacturing output will be transferred to the Group's new facility in Abu Dhabi and the closure of the Ostend facility is expected to be concluded by June 2011.

6. Non-recurring items (continued)

During the year ended 30 November 2010, start up costs of £0.6m have been incurred as the result of commissioning the new Technical Yarns plant in Abu Dhabi. As these costs are non-recurring in nature they have been separately classified in the income statement. The plant has completed pre-production trials and is now in commercial production.

The Company and the trustee of its main UK pension scheme had taken professional advice on the implementation of measures necessary to reflect the impact of changes in normal retirement age for members of pension schemes following the "Barber decision" on 17 May 1990 by the European Court of Justice and the scheme's consequent decision in 1991 to equalise retirement ages for men and women at 65 years. The Company and the trustee had believed that it was likely that additional funding would be required in respect of at least one of the scheme's component sections due to possible defects in its implementation of the changes. In April 2010, the Court of Session in Scotland determined that the measures used had been effective and the scheme was effectively equalised on the basis that the normal retirement age for all members was 65. As a result, the remaining £5.4m balance of the provision created in the year ended 30 November 2008 has been released.

During the year ended 30 November 2009, costs of £5.6 million were incurred to restructure and reduce the cost base of the business. Restructuring programmes took place within Technical Coated Fabrics, Performance Technical Textiles and within central head office functions. In addition, loan break fees were incurred during 2009 to terminate certain of our bank drawings.

7. Earnings per share

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below