Low & Bonar (LWB)

Business description

Low & Bonar produces specialist performance materials for a variety of end-markets by combining polymers with specialty additives and pigments. It now reports as four global business units.

Stock data

Market cap.£182.1m
Last close55.20p
High / Low (52 weeks)89.8p / 52.6p
Stock market listingLN
Forecast net debt (£m)125.3
Forecast gearing ratio (%)68
TeamIndustrials
SectorBasic Industries

Price performance

%1m3m12m
Actual(6.4)(0.7)(36.6)
Relative *(12.2)3.2(39.1)

* % Relative to local index

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Company news

Y/E Nov Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 400.0 52.8 29.2 6.0 9.2 5.4
2017A 446.5 55.8 30.7 6.3 8.8 5.6
2018E 417.0 55.1 30.1 6.4 8.6 3.1
2019E 429.5 58.4 32.4 6.9 8.0 3.3

Last updated on 17/04/2018

Investment summary

A new senior management team is in place with a clear agenda to improve operational and financial performance. FY18 is going to be a transition year but investors will still want to see evidence of progress from the two strongest business units and in addressing specific issues in the other two. We have not changed estimates at this stage, but note the increased H2 bias flagged by management. The attraction of the current valuation will depend on the level of investor confidence in underlying prospects.

Last updated on 17/04/2018

Industry outlook

Key strategic medium-term financial targets are currently for 10% operating margins and 12%+ return on capital employed. Organic group revenue growth may be supplemented by M&A. The onus is clearly on territories outside Europe to provide the growth engine.

Last updated on 06/04/2018

Key management

Martin Flower, Chairman
Philip de Klerk, CEO
Simon Webb, CFO

Company address

One Connaught Place,
London
W2 2ET
United Kingdom
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