Low & Bonar bolsters dividend after annual growth

Industrial fabric maker Low & Bonar reported profit growth in the last year, despite continued macroeconomic challenge, and said its new financial year had started in line with expectations.

The maker and supplier of technical textiles said profit before tax, amortisation and non-recurring items from continuing operations increased by 4.7% to £24.5m and rose 10.7% on a constant currency underlying basis. Revenue on a constant currency basis rose 2.6% to £380.5m.

Operating profits were 5.2% higher on an underlying basis. Operating margins edged up to 8% from 7.9% in 2011 while earnings per share rose by 5%.

Underlying its confidence in future trading, Low & Bonar has increased its dividend payment to 2.4p, 14.3% from a year earlier.

Low & Bonar said lower sales in the depressed artificial grass yarns market led to losses within its Yarns business, despite recent cost reduction actions.

Further action has been taken to reduce costs and the group has decided to provide £11.2m for the impairment of assets after assessing the potential range of future cash flows within the Yarns business.

Chairman Martin Flower said: "These are good results during a period of continued macroeconomic challenge, particularly within Europe, providing further evidence of the quality and resilience of our business and its growth prospects."

"To enhance these growth prospects, the group has made significant investments in reorganising its activities, building capability and extending capacity in attractive segments and geographies."

"These investments will begin to pay back in the coming year and further underpin the board's confidence in a continuation of cash generative, profitable growth. The year has started in line with our expectations."

CJ