17th Apr 2009 07:00
17 April 2009
Low & Bonar PLC
Interim Management Statement
Low & Bonar PLC ("the Group"), the international performance materials group, today publishes its Interim Management Statement covering the period from 1 December 2008 to 17 April 2009 as required by the UK Listing Authority's Disclosure and Transparency Rules.
During March and early April, the Group has seen some signs of sales improvement in both the total level of sales and order enquiries. This trend is specifically apparent in the civil engineering sector, our largest end market, which represented some 22% of sales in 2008. Sales into the carpet tile market have also experienced an improving trend. Additionally, there is some evidence that the supply chain destocking that was anticipated and has influenced the sales level in the year to date is starting to decline as customers' minimum inventory levels are reached.
Overall, however, and consistent with the "Current trading and outlook" section of our Preliminary Results announcement issued on 19 February 2009, the Group has continued to experience material year-on-year sales volume falls as the strained global economic conditions continue. Most particularly affected are sales to the truck and auto sector which represented only 14% of sales in 2008. We continue to believe that it will take some time for a clearer picture of underlying trading conditions and the outlook for the Group for 2009 to emerge.
As previously envisaged, the impact on profit of the sales performance has been significantly mitigated by both lower raw material prices and the prompt action taken to reduce costs, where the savings are expected to be larger than originally anticipated in our Preliminary Announcement made on 19 February 2009.
The Group undertook a Placing and Open Offer and Capital reorganisation which completed in March 2009 generating net proceeds of £30 million. This together with actions taken on working capital and capital expenditure has been used to reduce the net debt position considerably. Additionally, by terminating and redrawing some of its longer term loans the Group has been able to take advantage of the current lower Libor rates to reduce the level of its ongoing net interest costs. The Group's banking facilities are committed until December 2011.
The Group's strategy of developing diverse product ranges for niche end markets and building leading market positions, allied to the underlying trend growth of the technical textile industry all give the Directors confidence in the medium to long-term prospects of the Group.
For further information, please contact:
Low & Bonar PLC +44 (0)20 7535 3180
Paul Forman, Chief Executive
Kevin Higginson, Finance Director
Hogarth Partnership Limited +44 (0)20 7357 9477
Andrew Jaques / Rachel Hirst / Ian Payne
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 their 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
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