The Courier & Advertiser (Angus and Dundee)
Sales boost for Dundee textiles firm Low & Bonar
COSTS: Firm’s prices rise to counter higher overheads and tough marketplace
Revenues increased for textiles group Low & Bonar in the first quarter of the year despite challenging market conditions in Europe and the USA, the firm announced yesterday.
The rise in sales has been led by growth in its building and industrial and interiors and transportation businesses.
However, raw material cost rises have had a negative impact in the first quarter. The firm said it had countered this by increasing prices.
The company was founded in Dundee and continues to employ 48 staff at Caldrum Works, its city carpet backing manufacturing site.
Low & Bonar previously highlighted issues with its civil engineering division which led it to take a £31.6 million asset and goodwill impairment charge in last year’s accounts.
The trading update revealed the loss-making weaving plant in Slovakia ceased production at the end of March.
“The actions from the first stage of the civil engineering review are being implemented,” the statement said.
“The Ivanka site (in Slovakia) ceased production at the end of March, as planned, and the process to sell assets and inventory is under way.
“A new management team has been in place since March 1 to lead the remaining parts of the civil engineering business, needle-punched non-woven and construction fibres with a focus on improving performance.
“The outcome of the second stage of civil engineering business review will be announced at the time of the group’s interim results in July.”
The group said progress had been made on solving the production consistency issues in its coated technical textiles department and a cost savings initiative across the group had started.
“As part of this programme, production at some manufacturing sites has been reduced in order to better manage inventory levels, which has had a negative impact on cost recoveries,” the update added.
“Whilst the board’s expectations for the full year remain unchanged, it expects the group’s financial results to have a much greater weighting to the second half than in the prior year.”
Meanwhile, the company has appointed Simon Webb as group chief financial officer.
Chairman Martin Flower said: “Simon has strong financial, commercial and operational experience of relevance to his new role at Low & Bonar. We are delighted to welcome him to the board, and we look forward to working with him as we drive forward our strategy of ongoing operational improvement and profitable growth.”