The Investment column: Low & Bonar takes the wrap
Tuesday 18 February 1997
Dundee-based Low & Bonar flagged sluggish results for the year to November with its own profits warning in October which wiped 15 per cent of the share price.
In the event pre-tax profits dipped fractionally from pounds 52.3m (pounds 52.4m) on sales 5 per cent lower at pounds 420m. Earnings per share advanced a mere 2 per cent though the well-covered dividend was increased by 11 per cent to 14.7p.
The main problem was in the core silage wrap business where bad weather conditions, increased competition and higher raw material prices knocked about pounds 3m off the bottom line.
To address the sales decline chief executive Jim Heilig promises a series of customer initiatives, one of which involves rolling out Kellogg's packaging operations into continental Europe.
Low & Bonar supplies all the carton board for all of Kellogg's cereal business in the UK from the US giant's Manchester base.
Mr Heilig is also keen on more acquisitions, having spent pounds 32m in the last four months alone. The balance sheet should be able to support such expansion as gearing is low at 7 per cent. But with a currency translation hit of pounds 3m expected this year - just over half of sales are overseas - Low & Bonar will have to run hard just to stand still.
Pre-tax profits of pounds 56.5m put the shares on a forward p/e ratio of 11 with the shares up 26.5p to 424.5p. That's undemanding, but the stock market can be very unforgiving about companies which lose their momentum. Best watched from the sidelines.
- 1 Man who was struck and killed by lightning in Brecon Beacons 'was carrying a selfie stick'
- 3 Tube strike: This pedestrian-friendly map tells you the time it takes to walk between stations
- 4 Pamplona Running of the Bulls 2015: Three men gored and 10 hospitalised on first day of festival
- 5 Sarah Jessica Parker explains why she is not a feminist: 'It's not just about women now'
Man who was struck and killed by lightning in Brecon Beacons 'was carrying a selfie stick'
Greece debt crisis: Greek future in the euro slips into deeper uncertainty as Alexis Tsipras arrives at emergency talks without a written plan
Man soars over Calgary after tying 110 balloons filled with helium to his lawn chair for PR stunt, gets arrested for mischief
Tube strike: This pedestrian-friendly map tells you the time it takes to walk between stations
Pamplona Running of the Bulls 2015: Three men gored and 10 hospitalised on first day of festival
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
Greece debt crisis: Angela Merkel and Francois Hollande issue Athens with 24-hour ultimatum to avoid crashing out of the euro
Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...