Low & Bonar PLC (LON:LWB)
The new management team has a clear focus on improving financial and operational performance across the group and individual business units. H1 results bear testament to a number of challenges faced in the period but also showed signs that actions are beginning to take effect. We have reduced our EPS estimates (by c 20% this year, c 10% in the following two) to reflect more conservative margin assumptions.
H118 profits hit by mix and polymer input cost rises
Headline group revenue was modestly lower y-o-y in H118 but reported operating profit was down 42% (or £5.5m) compared to H117. Revenue mix accounted for around half of this reduction and unrecovered rising polymer input prices almost all of the remainder. Other effects – including higher volumes and initial cost saving actions – broadly netted out. Business unit themes were largely consistent with previous updates. A £19.7m exceptional charge (£18.2m net) including £13.3m goodwill impairment at Coated Technical Textiles (CTT) plus a number of other smaller-cost items was taken as the new management team seeks business improvement in a number of areas. Net debt stability is one indicator of progress here. The interim dividend was held at the prior year level.
To read the entire report Please click on the pdf File Below: