Materials specialist Low & Bonar says a good year for flooring is keeping 2006 profits on target
Materials specialist Low & Bonar has issued an upbeat trading statement ahead of its preliminary results.
The company, which specialises in flooring and textiles, said profit before tax for the year to 30 November should be in line with expectations.
The company said its flooring division has performed better than last year, with a Ministry of Defence contract having been extended two years to June 2009.
It said Colbond, which it acquired on 31 July, is delivering slightly ahead of expectations but warned that during the second half its yarns & fabrics division had experienced continuing cost rises. Shares in the company slipped 3.75p to 128p this morning.
A spokesperson said: “To create a more appropriate cost structure, we will be incurring a non-recurring charge of around £0.75m within the current financial year, which is expected to pay back within three years.”
From 1 December the yarns & fabrics division will be merged with Colbond to form the technical textiles division.
In July the company was fined £8.4m by the EU for cartel activity. The fine contributed towards a 18.2% fall in profit before tax to £2.9m for the six months ended 31 March. The £8.4m fine was imposed because of an alleged cartel in 1997 relating to industrial bags.