Low & Bonar: Mixed Trading, Change Underway
Edison | Feb 12, 2018 06:10AM ET
A period of stability following management change and delivery on some flagged FY18 group projects would see a good return of interest to the fundamental Low & Bonar PLC (LON:LWB) investment case, in our view. There are clear markers for tracking progress and, in the near term, a 3.3% yield with the expected final dividend payment is a clear attraction.
Some good performances, some distractions
FY17 results were in line with modestly reduced December guidance and showed good improvements in the contributions from Building & Industrial and Interiors & Transportation activities, a similar y-o-y outturn from Coated Technical Textiles (despite a soft end to the year) and ongoing underperformance at Civil Engineering. The latter is being addressed in a strategic review; material impairment charges were booked in the year and initial remedial steps have been announced. Significant investment was made in FY17 – notably in China – and, in combination with a weak sales pull-through/higher inventory position at the year-end, resulted in an increased net debt of £138m. The final dividend was held, giving a 1.7% increase in the full year dividend overall.
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