Materials group says disposal leaves it 'comfortably within' its financing covenants

Materials group Low & Bonar has told the stock exchange it expects to remain comfortably within its financing covenants after completing the sale of its flooring division.

The firm, which sold its flooring business for £123m on 30 September, said today that the disposal had strengthened its balance sheet by substantially reducing debt.

It said: “We expect to remain comfortably within our financing covenants and our bank loan facilities are committed until December 2011.”

However, the firm added: “Macroeconomic trends have clearly softened since the summer period and some of our business segments, whilst being resilient, have not been immune.”

The company said it expected trading for 2008 to be broadly in line with market expectations.