Underlying profit increases by 21% but 拢8.4m cartel fine hits interims

An 拢8.4m EU fine has hit profit at materials specialist Low & Bonar. The fine contributed towards a 18.2% fall in profit before tax to 拢2.9m for the six months ended 31 March 2006.

The 拢8.4m fine was imposed because of an alleged cartel in 1997 relating to industrial bags. The group exited the market in 1997 and has lodged an appeal against the EU鈥檚 decision.

Low & Bonar, which specialises in flooring and textiles, was also hit by additional pension contributions of 拢9.3m, which increased net debt to 拢23m.

Despite the fall in profit, group chief executive Paul Forman remained upbeat over the results. The underlying profit before tax increased by 20.9% from 拢3.8m to 拢4.5m while turnover for the period increased 14.7% from 拢78.2m to 拢89.7m.

Forman said: 鈥淭his has been another strong performance with revenue growth in both our divisions and profit growth in spite of further increases in raw material costs.鈥�

The group said that the recent acquisitions of Xirion, Threshold and Geotippex had been successfully integrated and that the proposed takeover of Colbond would create new opportunities in the technical textiles market.

Shares slipped 1.75 points to 127.25 this morning.