Laird says that after a disappointing first half, a significant improvement in the second half was expected, particularly in the Performance Materials (PM) division. But it says the acceleration of production for mobile devices has come much later than in previous cycles and visibility on volumes remains poor. In addition, it has experienced increased margin pressure due to unprecedented pricing pressures and some operational factors. This has led to a very challenging trading performance in PM in Q3 and it now anticipates full year group underlying profit before tax to be around £50m. Laird says management is taking actions to stabilise and improve the financial performance of the PM division with a considerable focus on managing costs and cash across the group. It expects year end net debt to EBITDA to be within covenant limits of 3.5x. Revenue in sterling for the third quarter increased by 29% to £207m (Q3 2015: £160m). On an organic basis at constant currency, revenue was lower by 4%. Year to date, for the nine month period to 30 September, revenue increased 20% to £560m (YTD Sept 2015: £466m). On an organic basis at constant currency, revenue was down 4%. Chief executive Tony Quinlan said: "We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division, at a time when other parts of the business continue to perform well. We are confident that the actions we have taken will stabilise and improve the business. "Moving into 2017, the work to improve our operating model is progressing well and we are on track to deliver the associated significant financial benefits. This, together with the Novero turnaround, as well as the positive momentum in our automotive business, will improve performance next year and beyond."
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