TIDMLWB
RNS Number : 2061P
Low & Bonar PLC
13 July 2010
13 July 2010
Half Year Results for the six months to 31 May 2010
STRONG TRADING PERFORMANCE,
GOOD PROGRESS TOWARDS MEDIUM TERM FINANCIAL TARGETS
Low & Bonar PLC ("Low & Bonar" or "the Group"), the international performance
materials group, today announces its half year results for the six months ended
31 May 2010.
Highlights:
+------------------------+-----------+-----------+-----------+
| Continuing operations | 6 months | 6 months | 12 months |
| | | | |
+------------------------+-----------+-----------+-----------+
| | May 10 | May 09 | Nov 09 |
+------------------------+-----------+-----------+-----------+
| | | | |
+------------------------+-----------+-----------+-----------+
| Revenue | GBP155.8m | GBP139.5m | GBP304.8m |
+------------------------+-----------+-----------+-----------+
| Statutory profit/ | GBP7.9m | GBP(5.8)m | GBP0.7m |
| (loss) before tax | | | |
+------------------------+-----------+-----------+-----------+
| Normalised profit | GBP6.7m | GBP5.1m | GBP15.8m |
| before tax* | | | |
+------------------------+-----------+-----------+-----------+
| EPS* | 1.67p | 1.75p | 4.35p |
+------------------------+-----------+-----------+-----------+
| Net debt | GBP67.4m | GBP98.7m | GBP67.4m |
+------------------------+-----------+-----------+-----------+
| Dividend per share | 0.5p | 0.0p | 0.8p |
+------------------------+-----------+-----------+-----------+
* Before amortisation and non-recurring items.
· Strong and broadly based sales growth up 11.7% (14.1% on a constant
currency basis)
· Normalised profit before tax up 31.4% (33.9% on a constant currency basis)
· GBP31.3m year-on-year improvement in net debt level
· Interim dividend of 0.5p per share (2009: nil) reflects confidence
· Performance Technical Textiles sales improved by 13.6%, at constant
currency, with an impressive contribution from Colbond
· Technical Coated Fabrics performed well, with sales up 15.2%, at constant
currency, and a significant uplift in margins
· Joint venture grass yarn production facility in Abu Dhabi now in commercial
production
Steve Good, Chief Executive of Low & Bonar, said:
"The Group has moved firmly forward on its organic growth agenda during the
first half, and delivered solid progress towards its medium term financial
targets which were set in February this year.
The much improved sales pattern established throughout the second quarter has
continued into the start of the second half and our joint venture grass yarn
production facility in Abu Dhabi is now in commercial production.
The declared interim dividend reflects the Group's strengthened financial
position and much improved trading performance, as well as our confidence in the
trading outlook. In our trading update of 4 June 2010 we indicated that trading
was better than our original expectations for the full year, and our view
remains unchanged."
For further information, please contact:
+----------------------------------+----------------------------------+
| Low & Bonar PLC | +44 (0)20 7535 3180 |
+----------------------------------+----------------------------------+
| Steve Good, Chief Executive | |
+----------------------------------+----------------------------------+
| Kevin Higginson, Finance | |
| Director | |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Hogarth | +44 (0)20 7357 9477 |
+----------------------------------+----------------------------------+
| Andrew Jaques | |
+----------------------------------+----------------------------------+
| Rachel Hirst | |
+----------------------------------+----------------------------------+
| Ian Payne | |
+----------------------------------+----------------------------------+
Chairman's Statement
In the first half of 2010, I am very pleased to report that the Group has moved
firmly forward and delivered solid progress towards the medium term financial
targets which we set in February this year.
In the first half, sales increased by 11.7%, or 14.1% on a constant currency
basis, compared to the same period last year, with profit before tax,
amortisation and non-recurring items improving by 31.4%, or 33.9% on a constant
currency basis.
Results Highlights
+----------------------+-----------+-----------+-----------+
| Continuing | 6 months | 6 | 12 |
| Operations | | months | months |
+----------------------+-----------+-----------+-----------+
| | May 10 | May 09 | Nov 09 |
+----------------------+-----------+-----------+-----------+
| | | | |
+----------------------+-----------+-----------+-----------+
| Revenue | GBP155.8m | GBP139.5m | GBP304.8m |
+----------------------+-----------+-----------+-----------+
| Statutory profit / | GBP7.9m | GBP(5.8)m | GBP0.7m |
| (loss) before tax | | | |
+----------------------+-----------+-----------+-----------+
| Normalised profit | GBP6.7m | GBP5.1m | GBP15.8m |
| before tax* | | | |
+----------------------+-----------+-----------+-----------+
| EPS* | 1.67p | 1.75p | 4.35p |
+----------------------+-----------+-----------+-----------+
| Net debt | GBP67.4m | GBP98.7m | GBP67.4m |
+----------------------+-----------+-----------+-----------+
| Dividend per share | 0.5p | 0.0p | 0.8p |
+----------------------+-----------+-----------+-----------+
* Before amortisation and non-recurring items
+----------------------------+-------------+--------+---------+
| Weighted average | 287.9m | 212.6m | 250.4m |
| number of shares in | | | |
| issue | | | |
+----------------------------+-------------+--------+---------+
Further commentary on the results and cash flows for the period can be found in
the Chief Executive's Review of Operations.
Dividends
The Board has declared an interim dividend, in line with our progressive
dividend policy, of 0.5p per share (2009: nil) payable on 30 September 2010 to
ordinary shareholders on the register of members on 3 September 2010. This
reflects the Group's strengthened financial position and much improved trading
performance as well as the Board's confidence in the trading outlook.
Pensions equalisation
A provision was created in the 2008 accounts for the costs associated with a
possible failure to properly equalise the retirement ages of men and women in
relation to the Group's main UK pension scheme following the "Barber decision"
of 1990. In April 2010, the Scottish Court of Session determined that
equalisation had been effective and so the provision totalling GBP5.5m, net of
costs, has been credited to the Income Statement.
Board changes
This is my first statement as Chairman of Low & Bonar following my appointment
on 30 June this year, and I am delighted to have the opportunity to lead the
Group into the next phase of its development. I would also like to pay tribute
to Duncan Clegg, who preceded me as Chairman, for his role in guiding the Group
through a period of significant change. The Group is now well positioned to take
advantage of future opportunities in the performance materials market.
Kevin Higginson resigned as Group Finance Director on 27 April 2010, to join a
private company. I would like to thank Kevin for his invaluable contribution
since he joined the Group in 2006. The search for his successor is well
advanced.
Outlook
The Group now has a clear focus on delivering profitable, cash generative,
organic growth. The results achieved in the first half of this year are a solid
step towards delivering both our medium term financial targets and building
further shareholder value. We are firmly committed to achieving both objectives.
The much improved sales pattern established throughout the second quarter, has
continued into the start of the second half and our joint venture grass yarn
production facility in Abu Dhabi is now in commercial production.
In our trading update of 4 June 2010 we indicated that trading was better than
our original expectations for the full year, and our view remains unchanged.
Martin Flower
Chairman
13 July 2010
Chief Executive's Review of Operations
Following the Group's resilient performance in 2009, in what were very
challenging economic conditions, the Group has increased significantly its focus
during the period on delivering profitable, cash generative growth from the
existing businesses.
I am pleased to report that good progress has been made in the first half of the
year. In comparison to the same period last year, sales have grown by 11.7%
(14.1% on a constant currency basis), profit before tax, amortisation and
non-recurring items has improved by 31.4 %, or 33.9% on a constant currency
basis, to GBP6.7m (2009: GBP5.1m), and net debt is GBP67.4m, some GBP31.3m lower
than in May 2009.
There have been three noteworthy features during the first half of the financial
year: strong and broadly based sales growth; improved asset efficiency and net
debt management; and the start up of our new manufacturing facility in Abu
Dhabi.
Strong and broadly based sales growth
Like for like sales, at constant currency rates, increased 14.1% compared to the
first half of last year. This was achieved despite a sluggish first quarter when
volumes in civil engineering and building products markets were adversely
affected by the severe winter in the Northern hemisphere. As the weather
improved towards the end of the first quarter sales improved significantly, with
all segments performing ahead of last year in the second quarter. In
particular, excellent growth was achieved in the transport, leisure, and carpet
manufacturing sectors.
The investments the Group has made to improve its new product pipeline and to
grow sales outside its historic 'heartland' (of Western Europe and North
America) have been major contributors. Recently launched products have improved
market shares in transport, carpet manufacturing and niche building product
sectors. Sales outside of this 'heartland' have improved from 17% to 23% of
total sales in the period, with China and Central and Eastern Europe developing
very well.
Successful management initiatives have been augmented by an improvement in the
external economic environment compared to a weak first half last year when
demand uncertainty led to significant de-stocking in some of the Group's end
markets. It has been particularly encouraging to see all sectors, including both
early and late cycle activities, improving half year on half year.
Improved asset efficiency and net debt management
Further improvements have been made compared to the same period last year in
working our assets harder and lowering the average level of debt. The Group's
return on capital employed has improved from 11.7 % at the end of May 2009 to
12.1 % at the end of May 2010. Working capital reduction programmes have
delivered structural benefits across the Group.
Good progress has been made in reducing our net debt from GBP98.7m a year ago to
GBP67.4m at the end of this half year.
Capital expenditure in the first half of the year was GBP3.1m. Second half
expenditure is planned to be higher to support increased trading opportunities
but is still expected to be around 80% of depreciation for the year.
Since the half year end, we have taken the opportunity provided by the improved
debt position and foreign exchange rates to cash settle 40% of the euro element
of the net derivative liability for GBP9.3m.
Start up of Abu Dhabi production facility
The Abu Dhabi joint venture investment to produce artificial grass yarns for the
European and North American markets has completed pre production trials and is
now in commercial production. Non-recurring costs of GBP0.7m were incurred in
starting up the facility.
This is an important milestone in the transformation of our loss making
Technical Yarns business.
Operational performance
Performance Technical Textiles
(Woven and non-woven fabrics and yarns for use in the civil engineering, carpet
tile manufacturing, leisure, construction and industrial sectors).
Sales in the division improved by 13.6% on a constant currency basis. However
margins declined to 6.6% (2009: 8.1%) and the results of the businesses within
the division were mixed.
Colbond performed impressively with a strong performance in both sales and
margin terms. As anticipated, the Technical Yarns business remained loss making
in its transition year.
The Fabrics business has suffered from temporarily lower margins as a
consequence of the significant increases in the cost of polypropylene over the
first half of the year and the timing lag in adjusting selling prices to restore
margins. With selling prices now adjusted, margins are expected to improve in
second half of the year.
Divisional sales grew sharply in the transport and carpet manufacturing sectors,
with new industrial applications in composites and filtration also contributing.
These sectors have benefitted from new product launches which have grown market
share, delivered strong growth in Asia, and shown a modest recovery in European
and North American markets from the lows of the first half of last year.
Civil engineering sales, after a slow start to the year, have picked up strongly
to be ahead of last year. Building product sales into commercial and residential
applications have yet to show any meaningful recovery.
Technical Coated Fabrics
(Technical coated fabrics for use in the print, architecture, transport, leisure
and industrial sectors).
Our Technical Coated Fabrics Division performed well in the first half of the
year. Sales grew by 15.2% on a constant currency basis, with operating margins
improving to 8.9% (2009: 6.4%).
Sales developed well in building products, on the back of new projects for
architectural membranes and sunshading fabrics which, together with a modest
recovery in early cycle leisure and trailer side curtain markets, delivered good
year on year growth. Operating margins benefited both from improving
manufacturing efficiencies and increased volumes through a tightly controlled
cost base.
Summary
We have made good progress during the first half and are on track to deliver our
medium term targets for sales growth, operating margin, and asset efficiency.
Steve Good
Group Chief Executive
13 July 2010
Forward looking statements
This announcement includes statements that are, or may be deemed to be, "forward
looking statements". These forward looking statements can be identified by the
use of forward looking terminology, including, but not limited to, the terms
"believes", "estimates", "anticipates", "expects", "may", "will", "would",
"could" or "should" or, in each case, their negative or other variations or
comparable terminology. These forward looking statements include matters that
are not historical facts.
By their nature, forward looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Forward looking statements are not guarantees of future
performance. The Group's actual results of operations, financial condition and
liquidity may differ materially from the impression created by the forward
looking statements contained in this announcement. In addition, even if the
results of operations, financial condition, and liquidity are consistent with
the forward looking statements contained in this announcement, those results or
developments may not be indicative of results or developments in subsequent
periods. Important factors that could cause these differences include, but are
not limited to: changes in the competitive framework in which the Group operates
and its ability to retain market share; the Group's ability to generate growth
or profitable growth; the Group's ability to generate sufficient cash to service
its debt; the Group's ability to control its capital expenditure and other
costs; significant changes in exchange rates, interest rates and tax rates;
significant technological and market changes; future business combinations or
dispositions; and general local and global economic, political, business, and
market conditions. In light of these risks, uncertainties and assumptions, the
events described in the forward-looking statements in this announcement may not
occur.
Other than in accordance with their legal or regulatory obligations, the Group
does not undertake any obligation to update or revise publicly any forward
looking statement, whether as a result of new information, future events or
otherwise.
LOW & BONAR PLC
Consolidated Income Statement
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | Six months ended | Six months ended | Year ended |
+-----------------+---------------------------------------+-----------------------------------------+-----------------------------------------+
| | 31 May 2010 | 31 May 2009 | 30 November 2009 |
| | Unaudited | Unaudited | |
+-----------------+---------------------------------------+-----------------------------------------+-----------------------------------------+
| | Before | Amortisation | Total | Before | Amortisation | Total | Before | Amortisation | Total |
| | amortisation | and | | amortisation | and | | amortisation | and | |
| | and | non-recurring | | and | non-recurring | | and | non-recurring | |
| | non-recurring | items | | non-recurring | items | | non-recurring | items | |
| | items | | | items | | | items | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Revenue | 155.8 | - | 155.8 | 139.5 | - | 139.5 | 304.8 | - | 304.8 |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Operating | 10.1 | (4.3) | 5.8 | 9.1 | (8.7) | 0.4 | 22.1 | (12.9) | 9.2 |
| profit | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Non-operating | - | 5.5 | 5.5 | - | - | - | - | - | - |
| income | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Financial | 5.2 | - | 5.2 | 7.3 | - | 7.3 | 14.6 | - | 14.6 |
| income | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Financial | (8.6) | - | (8.6) | (11.3) | (2.2) | (13.5) | (20.9) | (2.2) | (23.1) |
| expense | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Net financing | (3.4) | - | (3.4) | (4.0) | (2.2) | (6.2) | (6.3) | (2.2) | (8.5) |
| costs | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Profit/(loss) | 6.7 | 1.2 | 7.9 | 5.1 | (10.9) | (5.8) | 15.8 | (15.1) | 0.7 |
| before taxation | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Taxation | (2.1) | 1.0 | (1.1) | (1.4) | 3.0 | 1.6 | (5.0) | 3.1 | (1.9) |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Profit/(loss) | 4.6 | 2.2 | 6.8 | 3.7 | (7.9) | (4.2) | 10.8 | (12.0) | (1.2) |
| after taxation | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Profit/(loss) | 4.6 | 2.2 | 6.8 | 3.7 | (7.9) | (4.2) | 10.8 | (12.0) | (1.2) |
| for the period | | | | | | | | | |
| from continuing | | | | | | | | | |
| operations | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Profit for the | - | - | - | - | 0.4 | 0.4 | - | 0.4 | 0.4 |
| period from | | | | | | | | | |
| discontinued | | | | | | | | | |
| operations | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Profit/(loss) | 4.6 | 2.2 | 6.8 | 3.7 | (7.5) | (3.8) | 10.8 | (11.6) | (0.8) |
| for the period | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Attributable to | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Equity holders | 4.5 | 2.3 | 6.8 | 3.8 | (7.5) | (3.7) | 11.0 | (11.6) | (0.6) |
| of the Company | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Minority | 0.1 | (0.1) | - | (0.1) | - | (0.1) | (0.2) | - | (0.2) |
| interest | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | 4.6 | 2.2 | 6.8 | 3.7 | (7.5) | (3.8) | 10.8 | (11.6) | (0.8) |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Earnings/(loss) | | | | | | | | | |
| per share | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Continuing | | | | | | | | | |
| operations | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Basic | 1.67p | | 2.38p | 1.75p | | (1.95)p | 4.35p | | (0.41)p |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Diluted | 1.66p | | 2.37p | 1.74p | | (1.95)p | 4.33p | | (0.41)p |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Discontinued | | | | | | | | | |
| operations | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Basic | - | | - | - | | 0.18p | - | | 0.16p |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Diluted | - | | - | - | | 0.18p | - | | 0.16p |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Total | | | | | | | | | |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Basic | 1.67p | | 2.38p | 1.75p | | (1.77)p | 4.35p | | (0.25)p |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
| Diluted | 1.66p | | 2.37p | 1.74p | | (1.77)p | 4.33p | | (0.25)p |
+-----------------+---------------+---------------+-------+---------------+---------------+---------+---------------+---------------+---------+
LOW & BONAR PLC
Condensed Consolidated Group Balance Sheet
+------------------------------+----+-----------+-----------+----------+
| | | 31 May | 31 May | 30 |
| | | 2010 | 2009 | November |
| | | Unaudited | Unaudited | 2009 |
+------------------------------+----+-----------+-----------+----------+
| | | GBPm | GBPm | GBPm |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| Non-current assets | | | | |
+------------------------------+----+-----------+-----------+----------+
| Goodwill | | 84.5 | 86.6 | 90.5 |
+------------------------------+----+-----------+-----------+----------+
| Intangible assets | | 48.2 | 56.0 | 55.2 |
+------------------------------+----+-----------+-----------+----------+
| Property, plant and | | 119.9 | 126.8 | 127.5 |
| equipment | | | | |
+------------------------------+----+-----------+-----------+----------+
| Investment in associate | | 0.4 | 0.4 | 0.4 |
+------------------------------+----+-----------+-----------+----------+
| Deferred tax assets | | 3.9 | 3.9 | 3.5 |
+------------------------------+----+-----------+-----------+----------+
| | | 256.9 | 273.7 | 277.1 |
+------------------------------+----+-----------+-----------+----------+
| Current assets | | | | |
+------------------------------+----+-----------+-----------+----------+
| Inventories | | 62.6 | 69.9 | 61.4 |
+------------------------------+----+-----------+-----------+----------+
| Trade and other receivables | | 67.1 | 66.0 | 61.5 |
+------------------------------+----+-----------+-----------+----------+
| Derivative assets | | - | 0.4 | - |
+------------------------------+----+-----------+-----------+----------+
| Cash and cash equivalents | | 15.7 | 18.0 | 16.2 |
+------------------------------+----+-----------+-----------+----------+
| | | 145.4 | 154.3 | 139.1 |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| Current liabilities | | | | |
+------------------------------+----+-----------+-----------+----------+
| Interest bearing loans and | | 6.6 | 9.2 | 9.0 |
| borrowings | | | | |
+------------------------------+----+-----------+-----------+----------+
| Current tax liabilities | | 6.5 | 4.9 | 7.1 |
+------------------------------+----+-----------+-----------+----------+
| Trade and other payables | | 63.6 | 52.0 | 60.6 |
+------------------------------+----+-----------+-----------+----------+
| Provisions | | 0.3 | 2.8 | - |
+------------------------------+----+-----------+-----------+----------+
| Derivative liabilities | | 28.3 | 30.3 | 36.2 |
+------------------------------+----+-----------+-----------+----------+
| | | 105.3 | 99.2 | 112.9 |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| Net current assets | | 40.1 | 55.1 | 26.2 |
+------------------------------+----+-----------+-----------+----------+
| Total assets less current | | 297.0 | 328.8 | 303.3 |
| liabilities | | | | |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| Non-current liabilities | | | | |
+------------------------------+----+-----------+-----------+----------+
| Interest bearing loans and | | 76.5 | 107.5 | 74.6 |
| borrowings | | | | |
+------------------------------+----+-----------+-----------+----------+
| Deferred tax liabilities | | 28.7 | 28.5 | 29.3 |
+------------------------------+----+-----------+-----------+----------+
| Post employment benefits | | 26.8 | 27.1 | 27.2 |
+------------------------------+----+-----------+-----------+----------+
| Provisions | | - | 5.8 | 5.8 |
+------------------------------+----+-----------+-----------+----------+
| Other payables | | 0.5 | 0.2 | 0.4 |
+------------------------------+----+-----------+-----------+----------+
| | | 132.5 | 169.1 | 137.3 |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| Net assets | | 164.5 | 159.7 | 166.0 |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
| Equity attributable to equity | | | |
| holders of the parent | | | |
+-----------------------------------+-----------+-----------+----------+
| Share capital | | 45.3 | 45.3 | 45.3 |
+------------------------------+----+-----------+-----------+----------+
| Reserves | | 113.8 | 109.2 | 115.8 |
+------------------------------+----+-----------+-----------+----------+
| Total equity attributable to | | | | |
+------------------------------+----+-----------+-----------+----------+
| Equity holders of the parent | | 159.1 | 154.5 | 161.1 |
+------------------------------+----+-----------+-----------+----------+
| Minority interests | | 5.4 | 5.2 | 4.9 |
+------------------------------+----+-----------+-----------+----------+
| Total equity | | 164.5 | 159.7 | 166.0 |
+------------------------------+----+-----------+-----------+----------+
| | | | | |
+------------------------------+----+-----------+-----------+----------+
LOW & BONAR PLC
Condensed Consolidated Cash Flow Statement
+---------------------------------------+--+-----------+-----------+----------+
| | | Six | Six | Year |
| | | months | months | |
+---------------------------------------+--+-----------+-----------+----------+
| | | ended | ended | Ended |
+---------------------------------------+--+-----------+-----------+----------+
| | | 31 | 31 | 30 |
| | | May2010 | May2009 | November |
| | | Unaudited | Unaudited | 2009 |
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| | | GBPm | GBPm | GBPm |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Profit/(loss) for the period from | | 6.8 | (4.2) | (1.2) |
| continuing operations | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Profit for the period from | | - | 0.4 | 0.4 |
| discontinued operations | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Profit/(loss) for the period | | 6.8 | (3.8) | (0.8) |
+---------------------------------------+--+-----------+-----------+----------+
| Adjustments for: | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Depreciation and impairment | | 6.7 | 7.3 | 13.8 |
+---------------------------------------+--+-----------+-----------+----------+
| Amortisation | | 3.6 | 3.7 | 7.3 |
+---------------------------------------+--+-----------+-----------+----------+
| Income tax expense/(credit) | | 1.1 | (1.6) | 1.9 |
+---------------------------------------+--+-----------+-----------+----------+
| Net financing costs | | 3.4 | 6.2 | 8.5 |
+---------------------------------------+--+-----------+-----------+----------+
| (Increase)/decrease in working | | (6.0) | (4.0) | 17.1 |
| capital | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Decrease in provisions | | (5.8) | - | (2.5) |
+---------------------------------------+--+-----------+-----------+----------+
| Loss on disposal of property, plant | | - | - | 0.2 |
| and equipment | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Equity-settled share-based payment | | 0.4 | 0.4 | 0.5 |
+---------------------------------------+--+-----------+-----------+----------+
| Cash inflow from operations | | 10.2 | 8.2 | 46.0 |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Net financing costs paid | | (2.6) | (6.6) | (7.9) |
+---------------------------------------+--+-----------+-----------+----------+
| Tax paid | | (2.0) | (3.1) | (5.4) |
+---------------------------------------+--+-----------+-----------+----------+
| Pension cash contributions in excess | | - | - | (3.5) |
| of operating charge | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Net cash inflow/(outflow) from | | 5.6 | (1.5) | 29.2 |
| operating activities | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Acquisition of subsidiaries, net of | | - | (2.8) | (2.8) |
| cash acquired | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Acquisition of property, plant and | | (2.9) | (5.3) | (7.4) |
| equipment | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Intangible assets purchased | | (0.2) | (0.5) | (0.8) |
+---------------------------------------+--+-----------+-----------+----------+
| Disposal of discontinued operations, | | - | (0.5) | (0.6) |
| net of cash disposed of | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Net cash outflow from investing | | (3.1) | (9.1) | (11.6) |
| activities | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Proceeds of share issues | | - | 30.1 | 30.2 |
+---------------------------------------+--+-----------+-----------+----------+
| Drawdown/(repayment) of borrowings | | 0.6 | (19.0) | (50.1) |
+---------------------------------------+--+-----------+-----------+----------+
| Finance lease capital repayments | | (0.1) | (0.1) | (0.2) |
+---------------------------------------+--+-----------+-----------+----------+
| Movement in cash flow hedges | | - | (10.6) | (10.6) |
+---------------------------------------+--+-----------+-----------+----------+
| Equity dividends paid | | (2.3) | - | - |
+---------------------------------------+--+-----------+-----------+----------+
| Net cash (outflow)/inflow from | | (1.8) | 0.4 | (30.7) |
| financing activities | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Net cash inflow/(outflow) | | 0.7 | (10.2) | (13.1) |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Cash and cash equivalents at start of | | 16.2 | 27.5 | 27.5 |
| period | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Foreign exchange differences | | (1.2) | 0.7 | 1.8 |
+---------------------------------------+--+-----------+-----------+----------+
| | | | | |
+---------------------------------------+--+-----------+-----------+----------+
| Cash and cash equivalents at end of | | 15.7 | 18.0 | 16.2 |
| period | | | | |
+---------------------------------------+--+-----------+-----------+----------+
LOW & BONAR PLC
Condensed Consolidated Statement of Other Comprehensive Income
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | Six | Six | Year |
| | | months | months | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | ended | ended | ended |
+--------------------------------------+----------+-----------+-----------+----------+
| | | 31 May | 31 May | 30 |
| | | 2010 | 2009 | November |
| | | Unaudited | Unaudited | 2009 |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | GBPm | GBPm |
| | | GBPm | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Foreign exchange translation | | (7.6) | (17.3) | (11.6) |
| differences | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Actuarial gain/(loss) on defined | | 1.2 | (14.3) | (17.0) |
| benefit pension scheme | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Deferred tax on defined benefit | | - | - | (0.1) |
| pension scheme | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Net expense recognised directly in | | (6.4) | (31.6) | (28.7) |
| equity | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Profit/(loss) for the period from | | 6.8 | (4.2) | (1.2) |
| continuing operations | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Profit for the period from | | - | 0.4 | 0.4 |
| discontinued operations | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Total other comprehensive | | | | |
| income/(expense) for the period | | 0.4 | (35.4) | (29.5) |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Attributable to: | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Equity holders of the parent | | (0.1) | (35.8) | (29.2) |
+--------------------------------------+----------+-----------+-----------+----------+
| Minority interest | | 0.5 | 0.4 | (0.3) |
+--------------------------------------+----------+-----------+-----------+----------+
| | | 0.4 | (35.4) | (29.5) |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
Condensed Consolidated Statement of Changes in Equity
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | Six | Six | Year |
| | | months | months | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | ended | ended | ended |
+--------------------------------------+----------+-----------+-----------+----------+
| | | 31 May | 31 May | 30 |
| | | 2010 | 2009 | November |
| | | Unaudited | Unaudited | 2009 |
+--------------------------------------+----------+-----------+-----------+----------+
| | | GBPm | GBPm | GBPm |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Shareholders' equity at start of | | 161.1 | 159.8 | 159.8 |
| period | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Total recognised expense for the | | (0.1) | (35.8) | (29.2) |
| period | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Dividends paid to ordinary | | (2.3) | - | - |
| shareholders | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Ordinary shares issued | | - | 30.1 | 30.2 |
+--------------------------------------+----------+-----------+-----------+----------+
| Share-based payment | | 0.4 | 0.4 | 0.3 |
+--------------------------------------+----------+-----------+-----------+----------+
| Net (decrease)/increase in | | (2.0) | (5.3) | 1.3 |
| shareholders' funds | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| Shareholders' equity at end of | | 159.1 | 154.5 | 161.1 |
| period | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+--------------------------------------+----------+-----------+-----------+----------+
Notes on Interim Report 2010
LOW & BONAR PLC
Responsibility Statement
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU; and
· the interim report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
year and their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the year and that
have materially affected the financial position or performance of the entity
during that period; and any changes in the related party transactions described
in the last annual report that could do so.
By order of the Board By order of the
Board
Steve Good Kevin Higginson
Group Chief Executive Group Finance
Director
13 July 2010 13 July
2010
1. Segmental information for the six months ended 31 May 2010
As a result of the adoption of IFRS 8 Operating Segments, the directors are of
the opinion that the business segments, as previously reported under IAS 14
Segment Reporting, should remain unchanged. Hence the Group comprises the
following main reportable segments in the international performance materials
industry:
· Performance Technical Textiles - the production and supply of woven and
non-woven fabrics and yarns for use in the civil engineering, carpet tile
manufacturing, leisure, construction and industrial sectors.
· Technical Coated Fabrics - the production and supply of technical coated
fabrics for use in the print, architecture, transport, leisure and industrial
sectors.
+------------------------------------+-------------+-----------+-------------+---------+
| | Performance | Technical | | |
| | Technical | Coated | Unallocated | |
| | Textiles | Fabrics | Central | Total |
+------------------------------------+-------------+-----------+-------------+---------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Revenue - continuing operations | 104.3 | 51.5 | - | 155.8 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Operating profit before | | | | |
| amortisation and non-recurring | 6.9 | 4.6 | (1.4) | 10.1 |
| items | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Amortisation | (2.0) | (1.6) | - | (3.6) |
+------------------------------------+-------------+-----------+-------------+---------+
| Operating profit before | 4.9 | 3.0 | (1.4) | 6.5 |
| non-recurring items | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Non-recurring items | (0.7) | - | - | (0.7) |
+------------------------------------+-------------+-----------+-------------+---------+
| Operating profit | 4.2 | 3.0 | (1.4) | 5.8 |
+------------------------------------+-------------+-----------+-------------+---------+
| Non-operating expenses - | | | | 5.5 |
| non-recurring items | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Net financing costs | | | | (3.4) |
+------------------------------------+-------------+-----------+-------------+---------+
| Non-recurring loan break fees | | | | - |
+------------------------------------+-------------+-----------+-------------+---------+
| Profit before taxation | | | | 7.9 |
+------------------------------------+-------------+-----------+-------------+---------+
| Taxation | | | | (1.1) |
+------------------------------------+-------------+-----------+-------------+---------+
| Profit for the period from | | | | 6.8 |
| continuing operations | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Profit for the period from | | | | - |
| discontinued operations | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | 6.8 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Capital expenditure | 2.4 | 0.7 | - | 3.1 |
+------------------------------------+-------------+-----------+-------------+---------+
| Depreciation | 4.9 | 1.7 | 0.1 | 6.7 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Segment assets | 231.2 | 148.0 | - | 379.2 |
+------------------------------------+-------------+-----------+-------------+---------+
| Segment liabilities | (42.3) | (16.1) | - | (58.4) |
+------------------------------------+-------------+-----------+-------------+---------+
| Segment net assets | 188.9 | 131.9 | - | 320.8 |
+------------------------------------+-------------+-----------+-------------+---------+
| Unallocated assets and liabilities | | | | (88.9) |
+------------------------------------+-------------+-----------+-------------+---------+
| Cash and cash equivalents | | | | 15.7 |
+------------------------------------+-------------+-----------+-------------+---------+
| Interest-bearing borrowings | | | | (83.1) |
+------------------------------------+-------------+-----------+-------------+---------+
| Group net assets | | | | 164.5 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
LOW & BONAR PLC
Notes on Interim Report 2010 - continued
Segmental information for the six months ended 31 May 2009
+------------------------------------+-------------+-----------+-------------+---------+
| | Performance | Technical | | |
| | Technical | Coated | Unallocated | |
| | Textiles | Fabrics | Central | Total |
+------------------------------------+-------------+-----------+-------------+---------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Revenue - continuing operations | 94.1 | 45.4 | - | 139.5 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Operating profit before | 7.6 | 2.9 | (1.4) | 9.1 |
| amortisation and non-recurring | | | | |
| items | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Amortisation | (2.1) | (1.6) | - | (3.7) |
+------------------------------------+-------------+-----------+-------------+---------+
| Operating profit before | 5.5 | 1.3 | (1.4) | 5.4 |
| non-recurring items | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Non-recurring items | (3.2) | (1.1) | (0.7) | (5.0) |
+------------------------------------+-------------+-----------+-------------+---------+
| Operating profit | 2.3 | 0.2 | (2.1) | 0.4 |
+------------------------------------+-------------+-----------+-------------+---------+
| Non-operating expenses - | | | | - |
| non-recurring items | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Net financing costs | | | | (4.0) |
+------------------------------------+-------------+-----------+-------------+---------+
| Non-recurring loan break fees | | | | (2.2) |
+------------------------------------+-------------+-----------+-------------+---------+
| Loss before taxation | | | | (5.8) |
+------------------------------------+-------------+-----------+-------------+---------+
| Taxation | | | | 1.6 |
+------------------------------------+-------------+-----------+-------------+---------+
| Loss for the period from | | | | (4.2) |
| continuing operations | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Profit for the period from | | | | 0.4 |
| discontinued operations | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | (3.8) |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Capital expenditure | 5.4 | 0.4 | - | 5.8 |
+------------------------------------+-------------+-----------+-------------+---------+
| Depreciation | 5.4 | 1.8 | 0.1 | 7.3 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| Segment assets | 242.4 | 158.3 | - | 400.7 |
+------------------------------------+-------------+-----------+-------------+---------+
| Segment liabilities | (35.2) | (15.0) | - | (50.2) |
+------------------------------------+-------------+-----------+-------------+---------+
| Segment net assets | 207.2 | 143.3 | - | 350.5 |
+------------------------------------+-------------+-----------+-------------+---------+
| Unallocated assets and liabilities | | | | (92.1) |
+------------------------------------+-------------+-----------+-------------+---------+
| Cash and cash equivalents | | | | 18.0 |
+------------------------------------+-------------+-----------+-------------+---------+
| Interest-bearing borrowings | | | | (116.7) |
+------------------------------------+-------------+-----------+-------------+---------+
| Group net assets | | | | 159.7 |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+------------------------------------+-------------+-----------+-------------+---------+
LOW & BONAR PLC
Notes on Interim Report 2010 - continued
Segmental information for the year ended 30 November 2009
+--------------------------------------+-------------+-----------+-------------+---------+
| | Performance | Technical | | |
| | Technical | Coated | Unallocated | |
| | Textiles | Fabrics | Central | Total |
+--------------------------------------+-------------+-----------+-------------+---------+
| | GBPm | GBPm | GBPm | GBPm |
+--------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Revenue | 212.3 | 92.5 | - | 304.8 |
+--------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Operating profit before amortisation | 17.1 | 8.0 | (3.0) | 22.1 |
| and non-recurring items | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Amortisation | (4.1) | (3.2) | - | (7.3) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Operating profit before | 13.0 | 4.8 | (3.0) | 14.8 |
| non-recurring items | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Non-recurring items | (3.7) | (1.2) | (0.7) | (5.6) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Operating profit | 9.3 | 3.6 | (3.7) | 9.2 |
+--------------------------------------+-------------+-----------+-------------+---------+
| Non-operating expenses - | | | | - |
| non-recurring items | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Net financing costs | | | | (6.3) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Non-recurring loan break fees | | | | (2.2) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Profit before taxation | | | | 0.7 |
+--------------------------------------+-------------+-----------+-------------+---------+
| Taxation | | | | (1.9) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Loss for the year from continuing | | | | (1.2) |
| operations | | | | 0.4 |
| Profit for the year from | | | | |
| discontinued operations | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| | | | | (0.8) |
+--------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Capital expenditure | 6.4 | 1.6 | - | 8.0 |
+--------------------------------------+-------------+-----------+-------------+---------+
| Depreciation | 9.4 | 3.6 | 0.1 | 13.1 |
+--------------------------------------+-------------+-----------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+-----------+-------------+---------+
| Segment assets | 233.1 | 159.4 | - | 392.5 |
+--------------------------------------+-------------+-----------+-------------+---------+
| Segment liabilities | (40.0) | (13.5) | - | (53.5) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Segment net assets | 193.1 | 145.9 | - | 339.0 |
+--------------------------------------+-------------+-----------+-------------+---------+
| Unallocated assets and liabilities | | | | (105.6) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Cash and cash equivalents | | | | 16.2 |
+--------------------------------------+-------------+-----------+-------------+---------+
| Interest-bearing borrowings | | | | (83.6) |
+--------------------------------------+-------------+-----------+-------------+---------+
| Group net assets | | | | 166.0 |
+--------------------------------------+-------------+-----------+-------------+---------+
LOW & BONAR PLC
Notes on Interim Report 2010 - continued
Geographical information
+------------------+----------+----------+----------+
| Revenue by | Six | Six | Year |
| destination | months | months | ended 30 |
| | ended 31 | ended 31 | November |
| | May | May 2009 | 2009 |
| | 2010 | | |
+------------------+----------+----------+----------+
| | GBPm | GBPm | GBPm |
+------------------+----------+----------+----------+
| | | | |
+------------------+----------+----------+----------+
| United Kingdom | 8.5 | 7.8 | 16.2 |
+------------------+----------+----------+----------+
| Germany | 25.9 | 23.2 | 51.4 |
+------------------+----------+----------+----------+
| Other Western | 62.7 | 62.9 | 128.4 |
| Europe | | | |
+------------------+----------+----------+----------+
| Central/Eastern | 11.4 | 9.6 | 21.1 |
| Europe | | | |
+------------------+----------+----------+----------+
| North America | 23.1 | 22.1 | 46.7 |
+------------------+----------+----------+----------+
| Rest of World | 24.2 | 13.9 | 41.0 |
+------------------+----------+----------+----------+
| | 155.8 | 139.5 | 304.8 |
+------------------+----------+----------+----------+
| | | | |
+------------------+----------+----------+----------+
2. General information
Low & Bonar PLC is a company domiciled in Scotland and incorporated in the
United Kingdom. The interim condensed consolidated financial statements (the
"interim financial statements") of the Company as at and for the six months
ended 31 May 2010 comprise the Company and its subsidiaries (together the
"Group") and the Group's interests in its associates. The consolidated financial
statements of the Group as at and for the year ended 30 November 2009 are
available on request from the Company's head office or from the Group's website
at www.lowandbonar.com.
3. Basis of preparation
The interim financial statements are prepared in accordance with IAS 34,
'Interim Financial Reporting' as endorsed and adopted for use in the European
Union. This interim condensed consolidated financial information has not been
audited or reviewed by the Group's auditors in accordance with International
Standard on Review Engagement 2410 issued by the Auditing Practices Board. The
information has been prepared on the basis of accounting policies consistent
with those applied in the consolidated financial statements for the year ended
30 November 2009, except as noted below.
During the period, the Group has applied IAS 1 Presentation of Financial
Statements (revised 2007) which has introduced a number of terminology changes
and has resulted in a number of changes in presentation and disclosure. The
revised standard has had no impact on the reported results or financial position
of the Group. In addition, the Group has adopted IFRS 2 Amendment regarding
Vesting Conditions and Cancellations, IFRS 8 Operating Segments and Amendments
to IAS 32 Financial Instruments: Presentation, none of which have had a
significant effect on the reported results or financial position of the Group.
The interim financial statements do not include all the information required for
full annual financial statements and should be read in conjunction with the
consolidated financial statements for the Group as at and for the year ended 30
November 2009.
The comparative figures for the financial year ended 30 November 2009 are not
the Company's statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was i) unqualified, ii) did not include a
reference to any matters to which the auditors drew attention by way of
LOW & BONAR PLC
Notes on Interim Report 2010 - continued
emphasis without qualifying their report, and iii) did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
The financial statements are presented in pounds sterling, rounded to the
nearest hundred thousand pounds. They are prepared on the historical cost basis
except for the valuation to fair value of certain financial instruments.
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
Except as described below, in preparing these condensed interim financial
statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those applied to the consolidated financial statements as at and for
the year ended 30 November 2009.
There have been no related party transactions or changes in related party
transactions described in the latest annual report that could have a material
effect on the financial position or performance of the Group in the first six
months of the financial year.
The Group's business has a slight seasonal bias towards the second half of the
financial year due to higher levels of infrastructure and civil engineering
spend in the Northern hemisphere summer period.
This interim report was approved by the Board of Directors on 13 July 2010.
4. Taxation
Taxation on the operating profit after interest has been provided at a rate of
31% for the six months ended 31 May 2010 (2009: 29%) which is the estimated rate
of tax for the full year.
5. Dividend
The Board has declared an interim ordinary dividend of 0.5p per share payable on
30 September 2010 to ordinary shareholders on the register of members at close
of business on 3 September 2010. In accordance with IAS 10 "Events after the
Balance Sheet Date", this dividend has not been reflected in the interim
accounts. During the period, an ordinary interim dividend (in lieu of final) of
0.8p per share in respect of the year ended 30 November 2009 was paid to
ordinary shareholders.
6. Earnings per share
Basic earnings per share and earnings per share before amortisation and
non-recurring items are based on the weighted average number of ordinary shares
in issue during the half year. The calculation of fully diluted earnings per
share is based on the weighted average number of ordinary shares in issue plus
the dilutive effect of outstanding share options and the Low & Bonar 2003
Long-Term Incentive Plan (the '2003 LTIP') awards (to the extent to which
performance criteria had been achieved at 31 May 2010).
No shares were issued during the period (2009: 132,489,559 shares were issued by
means of a fully underwritten placing and open offer and 846,397 shares were
issued to employees under the LTIP).
LOW & BONAR PLC
Notes on Interim Report 2010 - continued
The weighted average number of ordinary shares and diluted weighted average
number of ordinary shares are set out below.
+------------------------------------+----------+------------+------------+------------+
| | | 31 May | 31 May | 30 |
| | | 2010 | 2009 | November |
| | | | | 2009 |
+------------------------------------+----------+------------+------------+------------+
| | (millions) | (millions) | (millions) |
+-----------------------------------------------+------------+------------+------------+
| | | | | |
+------------------------------------+----------+------------+------------+------------+
| Weighted average number | | 287.880 | 212.597 | 250.383 |
| of shares | | | | |
+------------------------------------+----------+------------+------------+------------+
| Effect of dilutive items | | 0.761 | 0.550 | 1.231 |
+------------------------------------+----------+------------+------------+------------+
| | | | | |
+------------------------------------+----------+------------+------------+------------+
| Diluted weighted average | | 288.641 | 213.147 | 251.614 |
| number of shares | | | | |
+------------------------------------+----------+------------+------------+------------+
| | | | | |
+------------------------------------+----------+------------+------------+------------+
The directors consider that the calculation of earnings per share from
continuing operations before amortisation and non-recurring items gives a more
meaningful indication of the Group's underlying performance. For the six months
ended 31 May 2010, this figure was 1.67p per share (May 2009: 1.75p; year ended
30 November 2009: 4.35p).
7. Non-recurring items
+---+--------------------------------+----------+---------+---------+----------+
| | | | Six | Six | Year |
| | | | months | months | |
+---+--------------------------------+----------+---------+---------+----------+
| | | | ended | ended | ended |
+---+--------------------------------+----------+---------+---------+----------+
| | | | 31 | 31 | 30 |
| | | | May2010 | May2009 | November |
| | | | | | 2009 |
+---+--------------------------------+----------+---------+---------+----------+
| | | | GBPm | GBPm | GBPm |
+---+--------------------------------+----------+---------+---------+----------+
| | Amounts charged to operating | | | | |
| | profit | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | Plant start up costs | | (0.7) | - | - |
+---+--------------------------------+----------+---------+---------+----------+
| | Restructuring costs including | | - | (5.0) | (5.6) |
| | asset impairments | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | | | (0.7) | (5.0) | (5.6) |
+---+--------------------------------+----------+---------+---------+----------+
| | | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | Amounts credited to | | | | |
| | non-operating expenses | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | Pensions equalisation costs | | 5.5 | - | - |
+---+--------------------------------+----------+---------+---------+----------+
| | | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | Amounts charged to finance | | | | |
| | costs | | | | |
+---+--------------------------------+----------+---------+---------+----------+
| | Loan break fees | | - | (2.2) | (2.2) |
+---+--------------------------------+----------+---------+---------+----------+
During the period, a number of start up costs have been incurred as the result
of the commissioning of the new plant in Abu Dhabi. As these costs are
non-recurring in nature, they have been separately classified in the income
statement. The plant has completed pre-production trials and is now in
commercial production.
The Company and the trustee of its main UK pension scheme had taken professional
advice on the implementation of measures necessary to reflect the impact of
changes in normal retirement age for members of pension schemes following the
"Barber decision" on 17 May 1990 by the European Court of Justice and the
scheme's consequent decision in 1991 to equalise retirement ages for men and
women at 65 years. The Company and the trustee had believed that it was likely
that additional funding would be required in respect of at least one of the
scheme's component sections due to possible defects in its implementation of the
changes. In April 2010, the Court of Session in Scotland determined that the
measures used had been effective and the scheme was effectively equalised on the
basis that the normal retirement age for all members was 65. As a result, the
remaining GBP5.5m balance of the provision created in the year ended 30 November
2008 has been released.
LOW & BONAR PLC
Notes on Interim Report 2010 - continued
During the period ended 31 May 2009, costs of GBP5.0m (year ended 30 November
2009: GBP5.6m) were incurred to restructure and reduce the cost base of the
business. Restructuring programmes took place within Technical Coated Fabrics,
Performance Technical Textiles and within central head office functions. In
addition, loan break fees of GBP2.2m (year ended 30 November 2009: GBP2.2m) were
incurred to terminate certain of our bank drawings.
8. Pensions and other post employment assets and liabilities
The Group operates a number of pension schemes in the UK and overseas. These are
either defined benefit or defined contribution in nature. The assets of the
schemes are held separately from those of the Group.
The movement in the Group's UK and overseas defined benefit schemes' deficits in
the six months ended 31 May 2010 is summarised below.
+----------------------+---------+-----------+---------+---------+----------+
| | UK | Overseas | Six | Six | Year |
| | Schemes | Schemes | months | months | ended |
| | | | ended | ended | 30 |
| | | | 31 May | 31 May | November |
| | | | 2010 | 2009 | 2009 |
| | | | Total | Total | Total |
+----------------------+---------+-----------+---------+---------+----------+
| | GBPm | GBPm | GBPm | GBPm | GBPm |
+----------------------+---------+-----------+---------+---------+----------+
| Net liability at | (19.5) | (7.7) | (27.2) | (11.9) | (11.9) |
| start of period | | | | | |
+----------------------+---------+-----------+---------+---------+----------+
| Current service cost | (0.1) | - | (0.1) | (0.2) | (0.3) |
+----------------------+---------+-----------+---------+---------+----------+
| Expected return on | 3.2 | 0.2 | 3.4 | 3.7 | 7.5 |
| plan assets | | | | | |
+----------------------+---------+-----------+---------+---------+----------+
| Interest cost | (4.2) | (0.4) | (4.6) | (4.5) | (9.0) |
+----------------------+---------+-----------+---------+---------+----------+
| Employer | 0.1 | 0.1 | 0.2 | 0.3 | 3.8 |
| contributions | | | | | |
+----------------------+---------+-----------+---------+---------+----------+
| Actuarial | 1.2 | - | 1.2 | (14.3) | (17.0) |
| gains/(losses) | | | | | |
+----------------------+---------+-----------+---------+---------+----------+
| Exchange adjustments | - | 0.3 | 0.3 | (0.2) | (0.3) |
+----------------------+---------+-----------+---------+---------+----------+
| | | | | | |
+----------------------+---------+-----------+---------+---------+----------+
| Net liability at end | (19.3) | (7.5) | (26.8) | (27.1) | (27.2) |
| of period | | | | | |
+----------------------+---------+-----------+---------+---------+----------+
9. Risks and uncertainties
The Board has considered the principal risks and uncertainties affecting the
Group in the second half of the year. The Group has in place processes for
identifying, evaluating and managing key risks. The principal risks and
uncertainties together with the approach to their mitigation is discussed in the
Business Review on pages 20 and 21 of the 2009 Annual Report, which is available
on the Group's website at www.lowandbonar.com, remain relevant and there are no
significant changes. In summary, the Group's principal risks and uncertainties
are:
· Global economic activity
· Organic growth and competition
· Raw material pricing
· Growth strategy
· Laws and regulations
· Funding risks
· Treasury risks
· Employees
· Business continuity
· Pension funding
The Directors have reviewed the Group's medium term forecasts along with
possible changes in trading performance arising from these uncertainties to
determine whether the Group's committed banking facilities are sufficient to
support its projected liquidity requirements, and whether the forecast earnings
are sufficient to meet the covenants associated with the banking facilities.
The Group's committed banking facilities are due for renewal in December 2011
and no matters have been brought to the attention of the Directors to suggest
that refinancing the facilities will not be possible at or before that date.
After making enquiries, the Directors have a reasonable expectation that the
Company and Group have adequate resources to continue in operational existence
for the foreseeable future, and have continued to adopt the going concern basis
in preparing the interim financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFDFDEFSSEDW
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