Shares in Low & Bonar plunged after it claimed that it had been cursed by the political crisis in Ukraine and the stagnant European economy.
Low & Bonar has transformed itself from a Scottish jute merchant to a producer of carpet tiles. It is now a manufacturer of complex “geotextiles” used in the drainage of construction projects such as roads and railways.
Yesterday the company warned that its European civil engineering operations experienced a reverse in the summer and has been trading down by as much as 8 per cent year on year.
Steve Good, the chief executive who is leaving at the end of the month, said that its French business had been hit by the slow economy there, and that its strong Polish business had been damaged by the uncertainty created by Russian hostilities with Ukraine, but he confessed that he could not put his finger on why its business in Germany had dropped.
After a decent start to the year, profits in the civil engineering business would be flat for 2014, the company said, and delays in the development of its business in Saudi Arabia would result in losses of £1 million there.
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The broker N+1 Singer yesterday slashed profit forecasts from £31 million to slightly more than £25 million. That prompted a slide in the shares, which closed 15¼p lower at 66p.