Underlying profit increases by 21% but £8.4m cartel fine hits interims
An £8.4m EU fine has hit profit at materials specialist Low & Bonar. The fine contributed towards a 18.2% fall in profit before tax to £2.9m for the six months ended 31 March 2006.
The £8.4m fine was imposed because of an alleged cartel in 1997 relating to industrial bags. The group exited the market in 1997 and has lodged an appeal against the EU’s decision.
Low & Bonar, which specialises in flooring and textiles, was also hit by additional pension contributions of £9.3m, which increased net debt to £23m.
Despite the fall in profit, group chief executive Paul Forman remained upbeat over the results. The underlying profit before tax increased by 20.9% from £3.8m to £4.5m while turnover for the period increased 14.7% from £78.2m to £89.7m.
Forman said: “This has been another strong performance with revenue growth in both our divisions and profit growth in spite of further increases in raw material costs.”
The group said that the recent acquisitions of Xirion, Threshold and Geotippex had been successfully integrated and that the proposed takeover of Colbond would create new opportunities in the technical textiles market.
Shares slipped 1.75 points to 127.25 this morning.