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Low & Bonar losses mount; launches £54m share issue

By BFN News | 07:59 AM | Wednesday 30 January, 2019


Performance materials group Low & Bonar said Wednesday annual losses more than doubled as increased costs and production issues weighed down performance. The company also launched a share issue to raise £54m to bolster its balance sheet. New shares in the company were offered at 15p each, a 17% discount to their closing price on Tuesday. The launch of the rights issue comes as declining profits kept net debt high, exacerbating the 'challenging trading environment experienced last year, including the significant impact of raw material cost increases and volatility in exchange rates,' the company said. For the year ended 30 November 2018, reported pre-tax losses widened to £42.2m from a loss of £19.7m a year earlier and revenue fell 3.3% to £431.9m. The ramp up in losses was driven by £58.9m of asset write downs, which included a £39.0m impairment of coated technical textiles' goodwill. Profit was hurt by increased raw material and freight costs, ongoing production consistency issues in coated technical textiles and Enka production and supply problems in North America. The company also said that it had made progress on its turnaround initiates but tempered expectations, adding that the transformation process would likely 'be complex with a number of challenging issues to overcome.' A final of 0.37p per share was proposed, which together with the interim dividend of 1.05p a share took the total dividend for 2018 to 1.42p per share, down from 3.05p last year, but in-line with the company's new dividend policy. 'In the early part of the 2019 financial year, cash and profit performance has been in line with expectations,' the company said. Story provided by StockMarketWire.com

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