Low & Bonar chief executive to depart as Us-china trade war hits revenues
● Dundee-founded materials specialist says turnaround plans will take time
Low & Bonar, the specialist materials group with Dundee roots, has announced the departure of its chief executive while warning that the trade dispute between the US and China is hurting sales.
The group, which retains a base in its home city, said a change of leadership was required “to accelerate delivery of the transformation programme initiated in late 2018”.
Philip de Klerk will step down from the top job and leave the board at the start of July, with non-executive chairman Daniel Dayan assuming the role of executive chairman on 2 July.
The group said a search for a new chief executive would not take place immediately and the situation would be reviewed later in the year.
It added: “The board expresses its thanks to Philip for his efforts as CFO[ chief fin ancial officer] and CEO in identifying and tack ling significant and long-standing cultural, operational and organisational weaknesses during a very challenging period for the group.”
Releasing a trading update, the firm said the US-China trade war had created significant uncertainty and dented sales, prompting it to warn that its first-half performance would be “materially behind that of the prior half year”.
It pointed to other headwinds, noting that Colb ond sales in Europe were slightly lower than the prior year to date, with ongoing softness in the automotive market, although the second quarter was showing an “improved trajectory”.
The group, which sources polymer sand manufactures them into yarns, fibre s and coated fabrics used in the likes of roofing, buildings and motor cars, told inv estors: “The board continues to expect the improving sales trend to underpin a stronger second half, helped by the usual seasonality in the business, and also supported by further cost reductions already in process.
“In light of current trading and ongoing weakness in certain markets, the board has lowered its expectations of full-year performance. The planned divestment of the civil engineering division continues to proceed well.
“The balance sheet remains a focus with net debt at midyear expected to be below £110 million.
“As set out in the group’s 2018 results announcement, 2019 is a year of transition as the group simplifies its portfolio and structure while working to improve operational performance. Progress is being made, but it is taking longer than anticipated to resolve some of the legacy issues during a challenging period.”