Low & Bonar losses mount as costs, production issues bite

Performance materials group Low & Bonar said Wednesday annual losses more than doubled as increased costs and production issues weighed down performance.

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 'significantly' impacted 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 said.

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.