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Low and Bonar rises on announcement of improved performance

Performance materials supplier Low & Bonar saw both profits and revenues move ahead in 2017, but lower than forecast sales and higher than planned inventories resulted in an increased level of net debt.
In the twelve months leading to 30 November, Low & Bonar reported a 5.1% rise in pre-tax profit to £30.7m as revenues ticked up 11.6% to £446.5m.

However, net debt continued to grow, jumping to £138.4m from the £111m of borrowings twelve months earlier.

Throughout the year the main market-listed company completed a £26m investment into its Changzhou, China manufacturing site in order to facilitate growth opportunities across its interiors and transportation (I&T) and building and industrial (B&I) divisions.

Low and Bonar's chairman Martin Flower said he felt the group had achieved "strong sales growth" over the year amid a "generally difficult market backdrop."

The profit performance across our four global business units was mixed, with profit growth in B&I and I&T offset by a significant reduction in profitability in Civil Engineering and a lower than anticipated performance in CTT," he said.

Despite the hurdles from 2017, including the December profit warning that saw the resignation of its chief executive, Low and Bonar increased its dividend payout from 3p to 3.05p.

Earnings per share grew 6.8% on an actual basis to 6.42p.

In a separate statement, Low and Bonar announced that chief financial officer Philip de Klerk would be taking over as the group's new chief executive as of 1 March.

Trudy Schoolenberg, who had taken up the torch as the group looked for previous boss Brett Simpson's replacement, was tapped to lead the restructuring of the global supply chain at Low and Bonar, after which she will return to her original role as a non-executive director.

As of 1645 GMT, shares had gained 11.85% to 60.40p.

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