Low & Bonar warns on profits; CEO Philip de Klerk set to step down
Source - SMW
Low & Bonar said Philip de Klerk would step down as CEO after the company warned on profits after reporting second-quarter trading performance that fell short of expectations amid ongoing weakness in its coated technical textiles division.
The company said it expected first half performance will be materially behind that of the prior half year, and as a result expectations for full-year performance were lowered.
Philip de Klerk would step down as CEO and leave the board on 1 July, and the current non-executive Chairman of the board, Daniel Dayan, would become executive Chairman on 2 July 2019, the company said.
The company decided that a change of leadership was required to accelerate delivery of the transformation programme initiated in late 2018, Low & Bonar said.
In the coated technical textiles business, the company said it was clear that, despite quality improvements in place, it would take longer than expected to regain customer loyalty and improve sales. 'Weak demand in transport markets, notably Germany and Eastern Europe, has also been a headwind,' it added.
The planned divestment of the Civil Engineering division continued to proceed well, following the sale processes for the two businesses in the division - Construction Fibres and Needle-Punched Non-Wovens - both of which were still expected to conclude during the current financial year.
'The balance sheet remains a focus with net debt at mid-year expected to be below £110m. Despite weaker performance, and considering the likely impact of the CE disposals, the Board expects to meet banking covenants at both the mid and full year,' the company said.