Strong sales growth characterises first half results from performance materials specialist Low & Bonar (LWB). Shares in the £255.2 million cap respond by rising 2.9% to 80.5p, investors clearly like half yearly revenues that are 10.2% higher at £196.3 million. The increase is 8% if you strip acquisitions and currency fluctuations.

The group's September 2013 acquisition Texiplast performed in line with expectations, contributing an additional 2% to constant currency sales growth. Sales in Europe have grown in line with forecasts with the region benefiting from a weak prior year comparative as well as a maiden contribution from Texiplast's largely European based business.


Asia Pacific sales, meanwhile, did much better, jumping 27% on the back of progress in China and the Middle East. This was partly offset by slowing growth in North American as demand for the group's flooring products softened.

These interims suggest that Low & Bonar is on track to deliver significant full year progress. While profits are traditionally weighted towards the second half of the year, this bias has been further emphasised by the acquisition of Texiplast, which makes around 80% of its annual profits in the second half.

Broker N+Singer maintains that the group's ‘investing for growth’ strategy continues to progress and analyst Jon Lienard continues to see upside, both organically and from further acquisitions and divestments. The broker maintains its Buy recommendation with a target price of 96p.

Issue Date: 10 Jul 2014