International materials group Low & Bonar has reported a pre-tax loss of £41.7 million for the six months ended 31 May, up from £12.3 million for the same period of 2018, in what the firm described as ‘extremely challenging’ times.
The group – founded as a jute maker in Dundee in 1903 – saw its revenue fall from £174.1m to £157.9m. It said this reflected challenging conditions in a number of key markets and a slow recovery in customer confidence. Net debt was reduced to £99m from £129m at 30 November 2018.
It added that no interim dividend will be paid in light of the poor first half.
As part of a turnaround plan, the group said it has been implementing a series of actions designed to improve the performance of the business and strengthen the balance sheet.
It said that trading conditions and operational performance have remained very challenging, but it has made progress. In February it raised around £50 million of net equity in a bid to strengthen its financial position.
In has disposed of its civil engineering businesses, with the sale of construction fibres completed at the start of this month and needle-punched non-wovens expected to complete next month. It said aggregate net proceeds of around £20 million from the two transactions will be used to further reduce net debt.
Low & Bonar said that in total annualised cost savings of around £8m had been made since the start of its restructuring programme in mid-2018. Savings of approximately £3m are expected over the full year.
Daniel Dayan, executive chairman, said: “The first half of 2019 has been another extremely challenging period for Low & Bonar. As a result of the group's poor performance, I was appointed executive chairman at the beginning of July 2019, temporarily combining the roles of chairman and chief executive.
“Our priorities remain unchanged, which are to transform the group's operational performance and ensure a strong and sustainable financial position.”
