Low & Bonar

LN: LWB

£56m market cap

16.95p last close

Low & Bonar produces specialist performance materials for a variety of end-markets by combining polymers with specialty additives and pigments. It reports as four global business units.

Investment summary

Low & Bonar announced a fully underwritten £54m placing and open offer (c £50m net) alongside FY18 results. The new equity funding goes a long way towards resolving balance sheet net debt constraints and allows the relatively new management team to execute its updated strategic plan. Our revised estimates incorporate the funding effects, more gradual EBIT margin recovery and reset dividends in line with the stated policy.

Y/E Nov
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 446.5 55.8 30.7 0.0 N/A 1.7
2018A 431.9 39.2 16.7 0.0 N/A 1.2
2019E 440.4 42.6 18.9 2.2 7.7 5.6
2020E 451.6 46.3 23.3 2.4 7.1 2.7
Last updated on 19/02/2019
Industry outlook

The new management team has restated key strategic medium-term financial targets of revenue growth 1-2% above regional weighted GDP, 10% operating margins, a 12%+ return on capital employed and an average dividend payout equal to 40% of PAT.

Last updated on 19/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 93.6
Forecast gearing ratio (%) 50
Price performance
%
1m
3m
12m
Actual (9.6) (31.4) (69.1)
Relative* (12.0) (33.1) (68.7)
52-week high/low 57.3p/12.8p
*% relative to local index
Key management
Philip de Klerk CEO
Ian Ashton CFO

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