Shares in Low & Bonar pushed strongly ahead after the performance textiles group maintained profit levels despite a “challenging” trading environment.
The company, founded as a jute merchant in Dundee more than a century ago, had millions added to its market value after revealing a 1.9% increase in sales to £410.6m in the year to November 30.
Statutory pre-tax profit levels were flat at £16.7m for the year, but investors were cheered by a full-year dividend up 3.8% on 2013 to 2.7p.
In October, the company announced plans to relocate part of its remaining Dundee-based Yarns manufacturing operation at Caldrum Works to a new facility in the Middle East.
The entire 127-strong workforce in Dundee was put on notice of redundancy, and the firm confirmed it was looking to shed around 70 of those roles.
The company yesterday said it had forked out £2.2m in severance and restructuring costs in relation to the Yarns business and integration of the group’s performance technical textile operations into the single Bonar brand.
It also reported revenues had increased by 10.8% to £36.2m within the Yarns division in the year just gone, with operating margins increasing by 56.8% to £0.8m before amortisation and non-recurring items.
“Yarns delivered another significant improvement this year, albeit profits and margins remain well below target level,” the company said in its statement.
“Actions taken to improve efficiency added to operational leverage but, with margins still well below target level, additional measures are currently being implemented.
“In October, we announced our intention to relocate production of fibrillated yarn from Dundee in order to concentrate the majority of production at our class-leading facility in Abu Dhabi.
“The consultation process was completed on November 27 and the equipment is now being transferred. To date, about a third of the reduction in staffing has been completed.”
Chief executive Brett Simpson, who took over at the helm of the group in the autumn, said the company had produced a “resilient performance” in a tricky climate.
“Since taking over the role of group chief executive in September, I have been getting under the skin of the business and our operations globally, and what I have found is greatly encouraging,” Mr Simpson said.
“This is a solid business with good market positions and compelling opportunities for growth.
“I believe there are further improvements which can be made which will enhance and accelerate our growth prospects, and I look forward to setting these out in detail later in the year.”
Chairman Martin Flower said the firm had made progress during the year.
“Whilst market conditions in Europe are expected to remain challenging, the board is confident that the group will continue to make further progress this year,” he said.
Shares in the firm, which employs more than 2,00 staff across its global operations, closed the day up 3.25p or 6.47% at 53.50p.