A trebling of pre-tax profits failed to stop shares in performance materials Low & Bonar from falling back yesterday after chief executive Steve Good shocked investors by announcing his retirement.
The 52-year-old joined the firm’s board a decade ago and was appointed to the top job in September 2009.
In his time at the helm, Mr Good has played an instrumental role in the significant reshaping and repositioning of the company and has been credited with positioning the business to grow in new markets outside its traditional trading plays in Europe.
The announcement came as L&B which employs more than 2,000 people group-wide and which operates a yarns manufacturing facility at Caldrum Works in Dundee posted pre-tax profits of £17.8 million in the year to November 30, a near trebling of the £6.1m of a year earlier.
Mr Good will leave in the second half of the year once a successor has been identified and appointed.
“The business is in good shape, the results are fine and the things we have been doing to sustain progress are in place,” he said.
“(My departure) is nothing to do with the business, it is purely down to personal reasons. I have spent 15 years packing and unpacking suitcases, staying in hotels and flying around the world, and I fancy a different balance in my life and that is what I am trying to achieve.”
The group saw revenues climb 5.9% during the year from £380.5m to £403.1m, while profits before tax, amortisation and non-recurring items increased by £1.6m to £26.1m.
The Dundee and Abu Dhabi-based yarns division which manufactures artificial grass surfaces for sports pitches and for use in landscaping projects returned to the black with a £500,000 profit last year, after a difficult 2012 in which it slumped to a £1.8m loss.
Revenues within the subsidiary grew by almost a quarter during the year to £32.8m from £26.5m the previous year, with the results being assisted by positive currency movements.
“The business, which represents 8% of group sales, made significant progress this year,” the firm said as it published its final results.
“Sales volumes increased by 24%, partly through slightly easier although still tough market conditions, but mainly through share gains.
“Sales to the USA and Middle East were particularly strong. Actions taken last year to reduce costs across the business added to operational leverage to deliver a small operating profit of £0.5m.
“We are continuing to work on additional measures to improve performance, and the group is confident that the business will make further progress in 2014.”
The firm’s dominant Bonar division, which produces geosynthetics, carpet backings and textiles used in the agricultural sector, saw an 8% fall in operating profits to £23m despite a 2.9% uplift in revenues, while the technical coated fabrics operation posted a 13.1% increase in operating profits to £12.1m after turnover rose 8.2% to £124.7m.
Chairman Martin Flower hailed a strong year for L&B. “The group has continued to make investments to drive future growth, extending its product range in attractive segments with the acquisition of Texiplast, and increasing its geographic reach.
“These investments are already contributing to the current year and further underpin the board’s confidence in a continuation of cash generative, profitable growth,” he said.
Howard Seymour of house broker Numis said the company was on track for growth despite the “disappointing news” of Mr Good’s departure.
“A strong performance as more normal market conditions have prevailed in H2 is taking place alongside the benefits of organic and acquisitive investment, which we expect to be a major driver of the group in the coming year and beyond.
“This in our view will lead to double-digit earnings growth.”
Shares in Low & Bonar closed down 2.25p or 2.60% at 84.25p yesterday.