Low & Bonar Holders Should Oppose Report And Accounts

Corporate governance watchdog Pensions and Investments Research Consultants, or PIRC, said Tuesday that Low & Bonar PLC (LWB.LN) shareholders should oppose the report and accounts at the annual general meeting on April 8 because the dividend has been declared as an interim, rather than a final, which doesn't require shareholders' approval.

PIRC didn't give any further explanation as to why shareholders should oppose the accounts, except to say the dividend will absorb around GBP2.3 million of shareholders funds.

On Feb. 16, Low & Bonar declared an interim dividend of 0.8 pence, in lieu of a final dividend, which will be paid on March 31, saying its performance has improved sufficiently to enable it to resume dividend payments. The firm last paid a dividend of 1.925 pence on Oct. 2, 2008.

At Nov. 30, 2009 the company had cash, and cash equivalents of GBP16.2 million and debt of GBP67.4 million, down from GBP104.5 million at the end of Nov. 2008.

In recent weeks a number of companies--including FTSE100-listed insurance company Admiral Group PLC (ADM.LN) and FTSE250-listed energy services company John Wood Group PLC (WG.LN)--have declared interim, or second interim, dividends ahead of the U.K. government's planned tax increase in April.

Separately, PIRC said shareholders should oppose the remuneration report as it believes the targets aren't sufficiently challenging.

"We do not consider that combined bonus and share incentive awards made during the year have been excessive, but consider that such awards have the potential to be excessive at maximum levels", PIRC said.

Finally, PIRC advises shareholders to abstain from approving the appointment of KPMG Audit PLC as auditor, saying the level of non-audit fees raises independence concerns.

At 1105 GMT, Low & Bonar shares were unchanged at 32.5 pence in a slightly lower DJ UK Smaller Companies Index--down 0.1%.

Company Web site: http://www.lowandbonar.com

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; ian.walker@dowjones.com

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