Low & Bonar hit by rising raw material prices

Shares in Dundee firm fall after ‘challenging’ first half of the year

Shares in Dundee textiles firm Low & Bonar tumbled as the firm said it faced a “challenging” first half of the year.

The group, which has a long-standing manufacturing plant in Dundee, went into the red as raw material prices increased more than anticipated.

Group chief executive Philip de Klerk said the firm had not been able to pass on the full impact of the cost increases to customers.

He said: “Our operational performance is not yet at the level I expect, although we are confident that the organisational changes which we are implementing will improve this.”

Revenue dropped by 2% in the first six months of the year to £206.2 million compared to the same period last year.

The firm made a pre-tax loss of £13.2m compared to a £10.8m profit last year. Net debt fell by £8.7m to £140.3m.

A transformation programme is under way at the firm with a focus on “cash and business optimisation”.

“The strategic actions under way will deliver against this objective and although it is early in the programme, good progress has been made,” Mr de Klerk added.

“We have put the customer back at the centre of what we are doing and will drive further innovation and product development to meet market needs.”

Low & Bonar was founded in Dundee and continues to employ 48 staff at Caldrum Works.

The company’s shares closed down

4.9p at 43.00p.

A worker at Low & Bonar’s Dundee site.