Low & Bonar, the specialist materials group which has its roots as a jute maker in Dundee, today warned that weaker sales and manufacturing issues had hit profits in the first quarter of the year.
Shares slumped by more than a quarter as a trading update said that although it was seeing some benefit from raw material costs, sales were held back at the start of the year due to a number of factors.
Bosses back £54 million bid by Low & Bonar to cut debts of £128 million
Lower than expected profitability in the quarter is likely to impact on full year performance.
However, it said as a result of actions being undertaken as part of its transformation programme and increased customer focus it expects an “improving trend in sales and profitability is expected during the remainder of the year, although market and macroeconomic factors remain uncertain”.
“The board is confident that it is taking the right actions to improve performance and create a strong long term growth platform for the group.”
Earlier this year the company, which still operates a factory in Dundee specialising in carpet backing yarns, raised £54 million in a share issue to strengthen its balance sheet after full year profits fell below expectations.
