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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.£155.5m
Last close47.10p
High / Low (52 weeks)84.0p / 43.0p
Stock market listingLN
Forecast net debt (£m)128.4
Forecast gearing ratio (%)76
TeamIndustrials
SectorBasic Industries

Price performance

%1m3m12m
Actual(6.2)(12.8)(46.9)
Relative *(5.4)(10.8)(47.9)

* % 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 7.9 4.6
2017A 446.5 55.8 30.7 6.3 7.5 4.8
2018E 427.5 49.9 24.1 5.1 9.2 3.0
2019E 439.8 55.3 28.5 6.1 7.7 2.9

Last updated on 23/07/2018

Investment summary

Headline group revenue was modestly lower y-o-y in H118 but reported operating profit was down 42% (or £5.5m) compared to H117. Revenue mix accounted for around half of this reduction and unrecovered rising polymer input prices most of the remainder. Business unit themes were largely consistent with previous updates. The new management team has a clear focus on improving financial and operational performance across the group and individual business units and net debt stability is one indicator of progress here. The interim dividend was held at the prior year level. Improving organisational efficiency, reducing net debt and investing in growth areas are fundamental strategic objectives to position the group for the future.

Last updated on 27/07/2018

Industry outlook

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

Last updated on 27/07/2018

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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