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Low & Bonar's profits unravel

LOW & Bonar's yarns division has fallen to an operating loss of £1.8 million and caused the company to take an £11.2m impairment charge.

Yarns – the smallest part of the group and employing 120 people in Dundee – had posted a £300,000 profit in the previous year, but the maker of artificial grass and carpet backing material saw revenue dip from £30.6m to £26.5m in the 12 months to the end of November 2012.

The company had previously removed £3m of annual costs to concentrate yarn manufacturing in Tayside and Dubai.

However, it has continued to be affected by reduced public spending on new and replacement artificial sports fields.

Low & Bonar said: "Actions have already been taken to reduce costs across the [yarns] business and we are working on additional measures to improve performance. As a result, the group is confident the performance of the business will improve in 2013."

Group pre-tax profits dipped 74% from £23.4m to £6.1m with a large chunk of that fall due to the impairment charge from the yarns business. Stripping out the impairment and other non-recurring costs profits rose to £24.5m.

Total revenue fell 2.1% or £388.7m to £380.5m although the final dividend has been increased from 1.4p to 1.6p per share.

Low & Bonar provide textile products to business sectors including construction, transport and leisure.

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