Low & Bonar dives after warning on tough trading conditions

14th Dec 2018 08:16

(Sharecast News) - Low & Bonar has warned on profits and cut its dividend as tough trading conditions during the final quarter were further exacerbated by a fire that disrupted production.The performance materials group said it is now anticipating full-year underlying profit before taxation and amortisation of around £17m for the year ended in November, down from prior expectations and below last year's underlying profit before tax of £30.7m.Sales growth on a like-for-like basis of 2% has led to group revenue of £432m, below the consensus forecast of £435.8m.The London listed company was hit as margins continued to be adversely impacted by previously reported increases in raw material and freight costs, while an October fire at coating plant in the Czech Republic resulted a halt to production that shall not resume until the new year.Consequently, a statement from the company said it expects to recommend the payment of a reduced final dividend when the full-year results are published."In 2019 there will be further initiatives to improve customer focus, to optimise manufacturing performance and to manage raw material cost volatility. The Board believes that the Group is establishing a firmer operational footing from which to pursue its medium-term objectives," said a statement from the company.The board expects to report net debt at 30 November of £129m, down from the £138.4m reported at the same point last year.Low & Bonar's shares were down 14.51% at 17.52p at 0902 GMT.