REG - Norcros PLC - Results for the year ended 31 March 2025
12/06/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250612:nRSL4631Ma&default-theme=true
RNS Number : 4631M Norcros PLC 12 June 2025
12 June 2025
Norcros plc
Results for the year ended 31 March 2025
Strategic execution delivering share gains and margin growth
Norcros, the number one bathroom products business in the UK and Ireland,
today announces its results for the year ended 31 March 2025.
Financial summary
2025 2024 % change
2025 v 2024
Revenue £368.1m £392.1m (6.1%)
Revenue constant currency LFL(1) 0.9%
Underlying operating profit(2) £43.2m £43.2m -
Underlying operating profit margin (%) 11.7% 11.0% 0.7pp
Underlying profit before taxation(2) £36.5m £36.4m 0.3%
Underlying operating cash flow(2) £38.9m £56.4m (31.0%)
Operating profit(3) £8.3m £39.9m (79.2%)
Underlying net debt(2) (£36.8m) (£37.3m) 1.3%
Diluted underlying EPS(2) 32.4p 32.1p 0.9%
Dividend per share 10.4p 10.2p 0.2p
1 LFL - Like for like after adjusting for the sale of Johnson Tiles UK in May
2024 and the closure of Norcros Adhesives in June 2023
2 Definitions and reconciliations of alternative performance measures are
provided in note 5
3 Operating profit is stated after acquisition and disposal related costs
(c.£25.4m largely relating to the sale of Johnson Tiles UK), exceptional
operating items and IAS 19R administrative expenses. Details are contained
later in this statement
Highlights
· Strong progress in a challenging environment:
o UK and Ireland - record underlying profit of £39.8m (2024: £38.4m) and
underlying operating profit margin of 15.5% (2024: 13.6%)
o South Africa - resilient performance with underlying profit of £3.4m
(2024: £4.8m); well placed to gain market share as conditions gradually
improve
· Disciplined strategic execution driving market share gains and
margin improvement:
o Portfolio development - sale of Johnson Tiles UK in May 2024 strengthens
portfolio; strategic review of Johnson Tiles SA nearing completion
o Organic growth - launch of first complete bathroom range, increased
cross-selling and market-leading customer service
o Operational excellence - benefits of scale and collaboration; Group
freight strategy and distribution efficiencies
o ESG - Sustainable Products framework developed; good progress against
2028 SBTi targets and implementation of people and culture strategy
· Underlying operating profit(2) of £43.2m, in line with the prior
year (2024: £43.2m)
· Underlying ROCE(2) of 17.3% (2024: 16.4%)
· Underlying cash conversion of 84% (2024: 123%), underlying net
debt(2) of £36.8m (2024: net debt of £37.3m) representing 0.8x leverage(2)
· 1 April 2024 pension valuation agreed at an actuarial deficit of
£11.7m (1 April 2021: £35.8m) with deficit repair contributions of c.£4.5m
p.a. to end after June 2027
· Strong balance sheet and capital availability - active M&A
pipeline and confident of future strategic progress
Medium term strategic targets
The Group remains committed to, and confident of, delivering our previously
stated medium term strategic targets:
· Organic growth at 2% - 3% above the market
· Group underlying operating profit margin to reach 15%
· Cash conversion greater than 90%
· Return on capital employed greater than 20%
· Delivery of SBTi-validated science-based emissions targets by 2028
Current trading
Group revenue in the two months to the end of May 2025 was 1.8% below the
prior year on a constant currency like for like basis, adjusting for Johnson
Tiles UK and the number of trading days in the period (UK and Ireland -1.1%,
SA -3.2%). Market conditions are likely to remain uncertain, with the pace of
recovery in the new build sector still unclear, however, the RMI sector
remains resilient and the Board's expectations for FY26 remain unchanged.
Thomas Willcocks, CEO, commented:
"In the context of current market challenges, I am pleased with the
performance over this period and excited by the significant opportunities that
remain in the more resilient mid-premium market segments where we hold leading
positions.
Our strategy is working and has momentum, building from a position of strength
and scale as we actively leverage the customer and operational synergies
within the Group. Our continued progress across our four key strategic pillars
is delivering as demonstrated by our operating margins in our core UK &
Ireland markets moving above 15% for the first time.
Whilst we are beginning to see some early evidence of a level of confidence
starting to return to the sector, especially in new build, we are not reliant
on any major recovery to deliver further progress against our medium term
targets and as a result, the Board's expectations for FY26 remain unchanged".
There will be a presentation today at 9.30am for analysts at the offices of
Hudson Sandler, 25 Charterhouse Square, London, EC1M 6AE. There will also be a
live audio webcast of the event (without Q&A) available at
https://brrmedia.news/NXR_FY25 (https://brrmedia.news/NXR_FY25) . The
supporting slides will be available in the investor section of the Norcros
website at www.norcros.com (http://www.norcros.com) later in the day.
Enquiries
Norcros plc Tel: 01625 547700
Thomas Willcocks, Chief Executive Officer
James Eyre, Chief Financial Officer
Hudson Sandler Tel: 0207 796 4133
Nick Lyon
Josh Hayler
Notes to Editors
Norcros is a market-leading group of brands specialising in design-led,
sustainable bathroom and kitchen products across the UK, Ireland, South
Africa, and select export markets. Each of our brands offers mid-premium
product ranges distinguished by their innovation, design, and commitment to
sustainability, all backed by industry-leading service to our trade and retail
customers.
Through a strategic blend of acquisitions and organic growth, Norcros has
become the UK and Ireland's number one bathroom products group. We see
significant potential for further expansion within this large and fragmented
market, accelerating growth and capturing market share through continued
acquisitions, organic development, operational excellence, and meaningful ESG
capabilities.
Norcros encompasses the renowned brands, Triton, MERLYN, Grant Westfield,
VADO, Croydex, and Abode in the UK, and Tile Africa, TAL, Johnson Tiles South
Africa, and House of Plumbing in South Africa.
Norcros is headquartered in Wilmslow, Cheshire and employs around 2,000
people. The Company is listed on the London Stock Exchange. For further
information please visit the Company website: www.norcros.com
(http://www.norcros.com)
Chair's Statement
Resilient performance, with clear platform for growth
Introduction
I am pleased to present my second annual statement as Chair of Norcros.
Looking back at the robust performance delivered over the last year, I
continue to be impressed by the strength of our differentiated businesses, the
energy and professionalism of our teams, and the strategic progress the Group
is making as it builds on its position as the number one bathroom products
business in our core UK and Ireland regions.
Progress in a challenging environment
The Group has delivered results in line with expectations and continued
progress on our pathway to delivering the medium-term targets published at the
start of the year. I am particularly pleased that we have continued to
strengthen the business and take market share despite the ongoing
macroeconomic challenges in our operating markets.
Norcros has an impressive record of consistently delivering through-cycle
market share growth, leveraging both our organic growth and M&A expertise
to good effect, with a focus on building a stable of strong, attractive brands
aimed at the more resilient mid-premium market segments. As a consequence, we
are less cyclical than most other businesses listed in the building product
category.
Delivering against our strategic objectives
At our Capital Markets Event in 2024, we set out clear medium-term ambitions
for the Group, and we are pleased with the progress delivered against those
targets. We have acted to strengthen the capital-light composition of our
portfolio, driving meaningful progress in operating margins and return on
capital employed in our core UK and Ireland markets. This included the sale of
Johnson Tiles UK, which was completed in May 2024. In addition, our strategic
review of Johnson Tiles South Africa is nearing completion.
We continue to invest in organic growth driven by new product development,
cross-selling, and exceptional service levels. This has been supported by
operational improvements across the Group, including the consolidation and
modernisation of key warehousing and distribution facilities in the UK and
Ireland.
The UK, Ireland and European bathrooms market remains fragmented, presenting
attractive opportunities to augment our organic growth through further
consolidation of our core and adjacent market segments. This remains an
important element of our strategic plans with a number of opportunities at
various stages of development in our pipeline.
The Board remains confident in the growth opportunities available to the
Group.
ESG: integral to how we grow
Sustainability continues to play a central role in our business strategy and
long-term success. I am pleased to report that the Group has continued to make
progress on its ESG agenda this year, and this is making an increasing
contribution to our profitable and responsible market share growth.
We have published our first standalone Norcros Sustainability Report, an
important milestone in our transparency and accountability journey. This
includes details on our Norcros Sustainable Products Framework that was
launched in the second half of the year. We are confident that we will
comfortably deliver our SBTi-validated science-based carbon emission targets
in the medium-term, as well as meeting our net zero ambitions by 2040.
As consumer expectations continue to evolve and regulation tightens, we
believe our focus on sustainability is not only the right thing to do, but a
source of long-term value and differentiation.
Acting responsibly
The Board ensures the highest standards of corporate governance and integrity
across the Group and keeps up to date on the latest governance standards. The
Board's regular interaction and communication with Executive Management means
that the Board is well-placed to challenge, guide and support the Executive
team in the continued delivery of our growth strategy.
The provision of a safe working environment for all our people and their
empowerment is of paramount importance. The Board also continues to set an
appropriate tone from the top in all diversity and inclusion matters.
Talent, culture and leadership
One of Norcros' greatest strengths is the quality and depth of its talent. The
leadership teams within each business continue to demonstrate agility,
commitment and ambition. At a Group level, our senior leadership team brings
together homegrown talent and exceptional external experience in a way that
reflects the best of both continuity and fresh perspective. I am particularly
pleased with the excellent work completed in the year on our updated Purpose
and Keys (values) culminating in the launch of our #BeSomeone campaign. This
is covered in more detail in the Chief Executive Officer's Review. The Board
would like to thank the entire Norcros team for their continued energy and
efforts this year.
Board changes
As previously communicated, in July 2024 we welcomed Rebecca DeNiro to the
Board as an additional Non-executive Director. Rebecca brings extensive
experience in consumer brands and is adding a valuable perspective as we
further develop and refine our operations and go to market strategy, and the
development of the wider business as a whole.
Dividend
The Board is recommending a final dividend of 6.9p per share (2024: 6.8p).
When combined with the interim dividend of 3.5p per share, this brings the
total dividend for the year to 10.4p per share, up 2.0% compared to the prior
year and maintaining an appropriate level of dividend cover.
Outlook
The Group has made important progress this year, strengthening the business
and delivering against its strategic objectives despite a challenging market
backdrop. Whilst macroeconomic conditions remain uncertain, Norcros is
well-placed to demonstrate its resilience and continue to grow share in the
bathroom products markets.
The Board remains confident in the Group's prospects and looks forward to
continuing to support and challenge management in the successful execution of
our strategy.
Chief Executive Officer's Review
Disciplined strategic execution and market share gains
Norcros has delivered another strong set of results with disciplined strategic
execution, driving profitable market share gains and improved operating
margins. Over recent years, we have continued to see a business environment in
which market challenges and uncertainty have become part of our everyday
lives. From a Norcros standpoint, we see further opportunities in this
environment for financially sound and trusted brands to grow share, as
demonstrated in our results.
Our position as the number one bathroom products business in our core UK and
Ireland markets has been built through a combination of design and service-led
organic growth, while implementing a market consolidation strategy through
acquisitions in a fragmented market.
We remain a group defined by our entrepreneurial spirit, decentralised model,
and collaborative approach, which allows us to leverage the sum of our parts.
This continues to drive ahead-of-market growth in both the RMI and new build
sectors, and together with our scale and mid-premium positioning, gives us the
through-the-cycle resilience that we are recognised for.
Strategic delivery across all pillars
Our growth strategy, presented at our Capital Markets Event in May 2024, is
built on four pillars: portfolio development, organic growth, operational
excellence and ESG. Over the past 12 months, we have reshaped our portfolio,
delivered ahead-of-market organic growth, executed impactful operational
improvements and made further progress across our ESG initiatives.
I am pleased with the progress that we have made against our published
targets, especially in our core UK and Ireland markets. Highlights across the
four pillars include:
Portfolio development
The sale of Johnson Tiles UK to its management team in May 2024, following the
closure of our UK Adhesives business in the prior year, has demonstrated our
focus on building a capital-light and cash-generative portfolio focused on
higher-margin, design-led, mid-premium market segments. This portfolio
development work continues with the current strategic review of our Johnson
Tiles South Africa business. The consultation process is well advanced and is
expected to conclude shortly.
Acquisitions remain a key component of our strategic growth plan, and we have
a well-developed pipeline of attractive prospects that are being evaluated.
Our focus remains on complementary opportunities, in our core UK and Ireland
markets in addition to carefully selected geographies in Europe and the Gulf.
We have a strong track record of acquiring, integrating and growing businesses
faster under our ownership, which will remain a key focus for the Group in the
year ahead.
Organic growth
Organic share growth is a real measure of the health and performance of our
businesses. Our published targets commit to growing our existing businesses
2%-3% ahead of the market, and we have delivered on this again this year. Our
organic growth is driven by in-house design (technical and fashion) that
delivers strong product range vitality, leverages our scale through targeted
cross-selling and exceptional customer service levels.
A key strength of our business model is our ability to enter new bathroom
categories organically or through acquisitions. This year, we entered the
bathroom furniture and sanitaryware categories organically and we launched
Cameo, our first complete and matched bathroom range, through our VADO
business. We were able to successfully leverage our South African supply chain
to deliver this project on time, with performance over the year being ahead of
plan. Given the success of this launch, we are now accelerating the
development of further ranges of matched and coordinated bathrooms over the
next 18 months.
Operational excellence
We have two main focus areas in operations, and in both, we are looking to
leverage our scale. The first is to ensure we continue improving stock
predictability and service. The second focuses on driving warehousing and
distribution efficiencies as we build on our strong service model.
Over the last year, we delivered strong operational progress, continuing to
unlock efficiencies, reduce complexity and build our service capabilities
across the Group. Our Group freight strategy, where we partnered with Maersk,
has delivered increased predictability and a programme of incremental
efficiencies. Working with Maersk, we also plan to ship 20% of all freight
from the Far East in the year ahead using eco-fuel vessels that will reduce
GHG emissions by 85%.
As reported at the half year, we also consolidated our warehouse footprint in
the UK from 26 to 15 sites, with the project delivering service improvements,
increasing operational savings and further reducing our carbon footprint.
Our ability to make doing business easier for our partners, teams and
customers underpins a targeted investment programme that is, over time,
improving our accuracy and efficiency and, more importantly, delivering a
multi-channel service offer that is becoming increasingly difficult to
replicate.
ESG
The Norcros ESG agenda is an important driver of performance and
differentiation, with meaningful progress made against our Net Zero Transition
Plan with a 22% reduction in carbon emissions delivered over the past two
years. Our well-progressed new product development pipeline continues to
deliver great products and a higher proportion of relevant ranges with real
sustainability benefits, which has become an increasingly important driver of
competitive advantage. We recently launched the Norcros Sustainable Products
Framework to measure our performance in a simple and understandable way for
both our B2B customers and end consumers, enabling us to accurately evaluate
and benchmark product sustainability across circa 70% of our portfolio for the
first time. This ability to measure where we are, good and bad, will ensure we
provide our customers with the authentic and powerful choices they
increasingly expect. Recognising our progress, Triton was awarded the
prestigious King's Award for Enterprise in Sustainable Development in the
period.
As we have worked to leverage our scale, we have distilled the common
behaviours that underpin what differentiates the Norcros collaborative way of
doing business. In the second half of the year, we launched our Norcros
Purpose - to create products and connections that offer sustainable choices
for better living - and our Keys (values). The Keys - Care, Courage,
Connection, and Common Sense - help guide our low ego but focused culture. A
highlight has been the launch of our #BeSomeone campaign, communicating and
reinforcing our belief that everyone, at every level, has the opportunity to
be someone, be heard, contribute and play a role in shaping our future. Our
ability to attract, develop and retain great people is one of the most
important enablers of long-term value creation across the Group.
We always start from the position of doing what is right, and we are motivated
by the fact that we are part of the communities in which we live, work and
interact and should always be putting in more than we take out. Recognising
the importance of ESG, we have published our first standalone Sustainability
Report, increasing transparency and accountability across all three ESG
pillars. This will be available on our website alongside our Annual Report and
Accounts.
What sets us apart
Norcros operates a decentralised but collaborative business model that ensures
that we are specialists where it counts, but can also leverage the significant
benefits of our collective scale. This model has allowed us to consolidate our
position as the number one bathroom products business in our core UK and
Ireland markets whilst maintaining the exceptional customer service that
underpins our brands.
Our capital-light portfolio of design-led, market-leading specialist brands
targets the more resilient mid-premium market segments, where consumers and
trade partners value our innovation, quality and service. We pursue
capital-light, margin-accretive growth and remain focused on strengthening our
market positions by offering customers and consumers powerful choices for
better living. The strength that comes from our teams, the positioning of our
brands and our collective scale continues to underpin our resilience and
long-term through-the-cycle growth prospects.
Looking forward to the year ahead
As a business, we have entered the new financial year with confidence and
momentum and remain focused on further executing the projects derived from our
four strategic pillars, delivering organic market share growth whilst
carefully advancing our M&A pipeline. As we do this, we will increasingly
see the benefits of scale derived from our ongoing investment in our
warehousing and distribution capabilities and related service levels. Our
well-developed new product pipeline will drive further competitive advantage,
supported by targeted capital expenditure to further increase the efficiency
of our operations.
ESG progress will continue to build through the deeper integration of
sustainability into product development, our culture and people strategy, and
reporting ensuring that Norcros remains well-positioned not just to respond to
market shifts but to help shape the future of our sector.
Current trading
Group revenue in the two months to the end of May 2025 was 1.8% below the
prior year on a constant currency like for like basis, adjusting for Johnson
Tiles UK and the number of trading days in the period (UK and Ireland -1.1%,
SA -3.2%). Market conditions are likely to remain uncertain, with the pace of
recovery in the new build sector still unclear, however, the RMI sector
remains resilient and the Board's expectations for FY26 remain unchanged.
Summing it all up
Our strategy is clear, our culture is aligned and our team is delivering -
with care, courage, connection and common sense. We will continue to do what
we said we would: improve our portfolio whilst re-energising and efficiently
growing our core business, responsibly and transparently. This focus means
that we are not reliant on the market as we continue to grow, with good
opportunities to take market share in our large and fragmented end markets,
both organically and through targeted acquisitions.
Business performance
2025 2024
£m £m
Revenue 368.1 392.1
Operating profit 8.3 39.9
IAS 19R administrative expenses 1.8 1.3
Acquisition and disposal related costs 25.4 4.3
Exceptional operating items 7.7 (2.3)
Underlying operating profit 43.2 43.2
2025 2024
£m £m
Revenue - UK and Ireland 256.4 281.9
Revenue - South Africa 111.7 110.2
Revenue - Group 368.1 392.1
Underlying operating profit - UK and Ireland 39.8 38.4
Underlying operating profit - South Africa 3.4 4.8
Underlying operating profit - Group 43.2 43.2
Underlying operating profit margin - UK and Ireland 15.5% 13.6%
Underlying operating profit margin - South Africa 3.0% 4.4%
Underlying operating profit margin - Group 11.7% 11.0%
2025 2024
£m £m
Underlying operating profit 43.2 43.2
Depreciation of right-of-use assets 5.2 4.7
Lease costs (6.8) (6.5)
Depreciation and underlying amortisation (owned assets) 4.8 4.3
Underlying EBITDA (pre-IFRS 16) 46.4 45.7
Net working capital movement (14.1) 3.3
IFRS 2 charge 0.3 0.9
Settlement of share options (0.5) -
Lease costs 6.8 6.5
Underlying operating cash flow 38.9 56.4
2025 2024
Basic underlying earnings per share 32.6p 32.4p
Diluted underlying earnings per share 32.4p 32.1p
Business review - UK and Ireland
Our core UK and Ireland business achieved revenue of £256.4m (2024:
£281.9m), up 1.1% on a like for like basis delivering ahead of the market
organic growth. Reported revenue was 9.0% lower than the prior year largely
due to the sale of Johnson Tiles UK, which completed in the first quarter of
the year. Our continued focus on the quality of our portfolio and market share
gains delivered a record level of underlying operating profit in the year with
underlying operating margins exceeding 15% for the first time.
The previously announced sale of Johnson Tiles UK to its management team was
completed in May 2024. Revenue of £4.3m (2024: £31.1m) and underlying
operating profit of £nil (2024: £0.7m) have been included in the underlying
results for the current and prior year.
RMI remains the largest component in the UK and Ireland bathroom market (circa
80%). Our market-leading brands are positioned in the mid-premium segment,
which was again more resilient than the rest of the sector this year. Although
housebuilding activity remained subdued, there are early indications of
recovery driven by the significant shortage of homes in the UK and Ireland,
and the clear focus coming from the UK government. We have long-standing
relationships with the leading national and regional housebuilders and
continue to grow share in this channel. Our alignment with new building
regulations (particularly regarding energy and water), outstanding customer
service, and strong balance sheet means that we are a trusted partner that
will benefit through this recovery cycle. Representing a relatively small part
of the UK and Ireland business, export sales were slightly ahead of the prior
year and remain largely unaffected by tariff uncertainty.
All of our brands performed strongly, growing their market-leading positions
through new product launches and excellent service levels. New products
included Cameo (VADO's first complete and matched bathroom offer), Naturepanel
(Grant Westfield's FSC-certified wall panel that can also be used outside of
the bathroom), and our first fully recyclable toilet seat (Croydex) with all
performing ahead of expectation. Our in-house design capabilities allow us to
cover all aspects of bathroom product design including fashion, technical and
sustainability aspects, and then get these safely to market in quick order.
Triton has also recently launched UniQ™, a technically innovative patented
corner riser rail and overhead shower solution, which is particularly
beneficial in new build homes where showering space can be at a premium. They
have also taken the next important step in terms of our already strong
sustainability credentials, launching a patented heat recovery system
(HeatRepeat) that will significantly reduce the amount of energy required in
electric showers. Our product vitality rate remains high and our pipeline of
new exciting products remains well developed.
Our market-leading product vitality, at 23%, and focus on a great customer
experience again saw the business not only deliver a strong financial
performance, but also earn industry recognition, winning a number of
prestigious awards during the year. In May 2024, Triton was honoured with the
King's Award for Enterprise for its outstanding commitment to sustainable
development. Triton also won a PlanetMark award for employee engagement with
its sustainability initiatives and "Genius Bathroom Product" award from Ideal
Home for ENVi(®). Grant Westfield's Naturepanel won KBB's Surface of the Year
Award and the Tile Collection won Ideal Home's Surface of the Year Award.
Abode's eco-conscious CAVA basins have already won Showhome's Bathroom Product
of the Year. MERLYN won a number of awards in recognition of the brand's
outstanding customer experience and was once again recognised as Shower Brand
Supplier of the Year from the Fortis Buying Group.
In line with our strategy, we continue to invest in driving efficiencies from
a service and cost perspective, helping to develop an already strong service
proposition. This includes investment in both systems and our infrastructure.
Two major structural projects were completed in the year. The first saw Grant
Westfield exit a regional depot distribution model in favour of central
distribution, where the warehouse and distribution function has been
consolidated with MERLYN. The second project at VADO resulted in four separate
warehouses being consolidated into a new fit-for-purpose warehouse in
Bridgwater. The result was a reduction in our UK warehouse footprint from 26
to 15 sites and, more importantly, enables a more efficient service to our
customers.
Our commitment to our ESG programmes and initiatives has been strengthened
over the last year with strong progress being made on our environment (planet)
and social (people) initiatives. Our businesses are well on track to
delivering on our 2028 SBTi commitments ahead of schedule with more detail
included in our standalone Sustainability Report.
The UK and Ireland business delivered a record underlying operating profit for
the year. Underlying operating profit was 3.6% higher than the prior year,
increasing to £39.8m, with the operating margin increasing by 1.9 percentage
points to 15.5% (2024: 13.6%). Operating cash conversion was slightly below
historical levels, due to the investment in working capital in the year as we
carefully navigate what remain challenging supply chain conditions.
Our core UK and Ireland business now accounts for 70% of Group revenue and 92%
of Group underlying operating profit. We are well-placed to continue growing
market share and winning new customers in our target market segments by
leveraging our strong new product development pipeline, scale-based
collaboration and superior customer service.
Business review - South Africa
Our South African business delivered revenue of £111.7m (2024: £110.2m),
0.5% higher than the prior year on a constant currency basis. This was a
resilient performance in a challenging macroeconomic environment characterised
by low consumer confidence, high interest rates, increased competition and
subdued new build activity.
The marginal increase in revenue is testament to the strength and experience
of the local management team, delivering resilient results despite market
conditions and significant additional competition from a large new regional
tile manufacturer. The significant additional tile capacity that has come to
market has added considerable pressure to an already over-supplied market,
impacting demand and pricing at Johnson Tiles. This has materially impacted
both the performance of Johnson Tiles and our Norcros SA business as a whole.
In addition, whilst energy interruptions have now subsided, the impact that
they had on consumers at the start of the year and the consequential impact on
the new build cycle will take more time to unwind.
Despite these challenges, the business remained profitable and has been
actively managed through this period with a specific eye on positioning the
Group for the gradual market recovery. This includes the previously announced
strategic review of the Johnson Tiles manufacturing business. The review,
including a formal consultation process is well advanced and is expected to
conclude by the end of Q1 of the current financial year. We do not expect the
market to materially improve in the year ahead and as a result will continue
to leverage our leading brands and strong financial position to grow market
share.
A key highlight in the year was the performance of TAL, our market-leading
adhesive business in South Africa. TAL grew market share and revenue as a
result of excellent execution of their new product development programme and
best-in-market service levels. Tile Africa and House of Plumbing both
strengthened their management teams in the period, and we expect to see
gradual progress coming from these changes in the year ahead. In both
businesses, the focus will be on driving improved like for like performance
from our existing store bases.
In the current market conditions, the teams in South Africa maintained their
focus on growing market share profitably by delivering exceptional service
levels and meaningful new product development rollouts. Highlights here
included the launch of the Abode inspired store-within-a-store kitchen
concepts in eight Tile Africa stores, the acceleration of our directly sourced
private label range at House of Plumbing, and the addition of a new cleaning
products range at TAL.
As with the UK and Ireland business, there has been investment focused on
driving operational efficiencies and improved service levels through targeted
investments in our infrastructure and systems. Tile Africa successfully
implemented a new ERP system in the first half of the year. The project was
completed with minimum disruption to our operations or customers.
South Africa is an energy and water scarce country. As with our UK and Ireland
business, sustainability is an increasingly core strategic driver both through
necessity and opportunity. Key progress has been made investing in solar
energy provision across our store estate. The introduction of water efficient
and storage products has also been progressed in the year ahead. Further
detail is included in our standalone Sustainability Report.
Underlying operating profit decreased to £3.4m (2024: £4.8m), with the
underlying operating margin at 3.0% (2024: 4.4%). Operating cash conversion
was behind the prior year largely due to our inability to place our tile
manufacturing capacity.
Whilst performance over the last two years has not been in line with
historical levels given the challenging macro and market conditions, we have a
solid, well-invested and well run business that remains in a strong
competitive position and is well-placed to gain market share in its respective
markets as conditions gradually improve.
Chief Financial Officer's Review
2025 2024
£m £m
Revenue 368.1 392.1
Underlying operating profit 43.2 43.2
IAS 19R administrative expenses (1.8) (1.3)
Acquisition and disposal-related costs (25.4) (4.3)
Exceptional operating items (7.7) 2.3
Operating profit 8.3 39.9
Net finance costs (6.3) (7.3)
Profit before taxation 2.0 32.6
Taxation 1.5 (5.8)
Profit for the year 3.5 26.8
Revenue
Group revenue at £368.1m (2024: £392.1m) increased by 0.9% on a constant
currency like for like basis after adjusting for Johnson Tiles UK, disposal in
May 2024, and Norcros Adhesives, closed in June 2023. Reported revenue
decreased by 6.1%.
Underlying operating profit
Underlying operating profit was in line with the prior year at £43.2m (2024:
£43.2m). Our UK and Ireland businesses delivered a record performance with an
underlying operating profit of £39.8m (2024: £38.4m) and underlying
operating profit margin of 15.5% (2024: 13.6%). Our South African businesses
recorded an underlying operating profit of £3.4m (2024: £4.8m) and
underlying operating profit margin of 3.0% (2024: 4.4%). Group underlying
operating profit margin was 11.7% (2024: 11.0%).
Acquisition and disposal related costs
Acquisition and disposal related costs of £25.4m (2024: £4.3m) have been
recognised in the year, of which £22.2m relates to the non-cash loss on
disposal of Johnson Tiles UK. In line with previous years, we also recognised
£6.5m of acquired intangible asset amortisation. A credit of £4.4m,
representing a release of deferred contingent consideration resulting from the
acquisition of Grant Westfield, has also been reflected.
Exceptional operating items
An exceptional cost of £7.7m (2024: credit of £2.3m) has been recognised in
the year.
2025 2024
£m £m
Restructuring costs 4.6 1.7
Costs in relation to new Enterprise Resource Planning Systems 2.0 -
Legal case 1.1 -
Reversal of impairment - (4.0)
7.7 (2.3)
The £4.6m (2024: £1.7m) exceptional restructuring costs predominantly relate
to the consolidation of warehousing and distribution costs at Grant Westfield
and the move to a single site in VADO. A total of £2.0m of costs were
incurred in relation to the implementation of new SaaS Enterprise Resource
Planning systems at MERLYN and Tile Africa. Exceptional legal case costs
include actual costs incurred in the year and the estimated future economic
outlay of finalising the case.
Finance costs
2025 2024
£m £m
Interest payable on bank borrowings 5.0 5.2
Interest on lease liabilities 1.7 1.6
Discounting of deferred contingent consideration - 0.9
Amortisation of costs of raising debt finance 0.4 0.4
Finance costs 7.1 8.1
IAS 19R finance credit (0.8) (0.8)
Net finance costs 6.3 7.3
Net finance costs for the year of £6.3m largely relates to interest payable
on bank borrowing and leases. The movement compared to £7.3m in 2024 is
mainly due to the discounting of deferred contingent consideration costs in
the prior year.
The Group has recognised a £0.8m IAS 19R interest credit in respect of the UK
defined benefit pension scheme surplus (2024: credit of £0.8m) due to the
accounting surplus throughout the year.
Underlying profit before tax
Underlying profit before tax was broadly in line with the prior year at
£36.5m (2024: £36.4m).
Taxation
The tax credit for the year of £1.5m (2024: charge of £5.8m) was
particularly impacted by the non-cash exceptional loss from the disposal of
Johnson Tiles UK in the period.
The weighted average applicable tax rate for the year decreased to (45.0%)
(2024: 21.5%) due to the weighting of corporation tax losses in relation to
the UK result relative to the profits made in Ireland and South Africa. The
underlying effective tax rate in the year was 20.0% (2024: 20.9%). The
standard rate of corporation tax in the UK is 25% (2024: 25%), in South Africa
27% (2024: 27%) and in Ireland 12.5% (2024: 12.5%).
Dividends
Diluted underlying EPS has increased in the year to 32.4p (2024: 32.1p) and
the Board recommends a final dividend of 6.9p per share (2024: 6.8p). This,
combined with the interim dividend of 3.5p per share (2024: 3.4p), results in
a total dividend of 10.4p per share (2024: 10.2p). The total dividend is
equivalent to a dividend cover of 3.1 times, in line with the prior year. The
cash cost of the total dividend is £9.3m.
This final dividend, if approved at the Annual General Meeting, will be
payable on 1 August 2025 to shareholders on the register on 27 June 2025. The
shares will be quoted ex-dividend on 26 June 2025. Norcros plc operates a
Dividend Reinvestment Plan (DRIP). If a shareholder wishes to use the DRIP,
the latest date to elect for this in respect of this final dividend is 11 July
2025.
Cash flow and net debt
Underlying operating cash flow was £17.5m lower than in the prior year at
£38.9m (2024: £56.4m).
2025 2024
£m £m
Underlying operating profit 43.2 43.2
Depreciation and underlying amortisation (owned assets) 4.8 4.3
Depreciation of right-of-use assets 5.2 4.7
Lease costs (6.8) (6.5)
Underlying EBITDA (pre-IFRS 16) 46.4 45.7
Net working capital movement (14.1) 3.3
IFRS 2 charge add-back 0.3 0.9
Settlement of share options (0.5) -
Lease costs 6.8 6.5
Underlying operating cash flow 38.9 56.4
Underlying operating cash conversion(1) 84% 123%
1 Represents underlying operating cash flow as a percentage of underlying
EBITDA (pre-IFRS 16).
The main driver of the reduction in underlying operating cash flow was largely
due to the increase of inventories in the period, helping to maintain our
excellent customer service levels across the Group. The increase in
inventories in Johnson Tiles SA, as noted earlier in the report, also impacted
operating cash flow. Underlying operating cash conversion in the year was 84%
of underlying EBITDA (2024: 123%).
The Group ended the year with net debt of £36.8m (2024: net debt of £37.3m)
on a pre-IFRS 16 basis. This represents a leverage of 0.8 times underlying
EBITDA (2024: 0.8 times). Net debt inclusive of IFRS 16 lease liabilities was
£57.4m (2024: £59.5m).
Balance sheet
The Group's balance sheet is summarised below.
2025 2024
£m £m
Property, plant and equipment 21.8 28.1
Asset held for sale 3.7 -
Right-of-use assets 16.7 18.0
Goodwill and intangible assets 153.5 161.2
Deferred tax (8.6) (13.4)
Net current assets excluding cash and borrowings 72.7 77.1
Pension scheme surplus 6.8 16.5
Lease liabilities (20.6) (22.2)
Other non-current assets and liabilities (1.3) (5.6)
Net debt (36.8) (37.3)
Net assets 207.9 222.4
Total net assets decreased by £14.5m to £207.9m (2024: £222.4m). Net
current assets (excluding cash and borrowings) decreased by £4.4m largely
reflecting the sale of Johnson Tiles UK.
Property, plant and equipment decreased by £6.3m to £21.8m as a result of
the sale of Johnson Tiles UK, the subsequent sale of an element of the former
Johnson Tiles UK site and a £3.7m reclassification to asset held for sale for
the remainder of the site. The depreciation charge was £4.4m (2024: £4.0m)
and no foreign exchange gains/losses relating to assets held in South Africa
were recognised (2024: loss of £1.1m). Disposals of £2.8m of assets were
reflected in the year mainly due to the sale of Johnson Tiles UK and the
consolidation of warehousing and distribution at Grant Westfield. Fixed asset
additions for the year were £6.2m (2024: £6.2m).
Right-of-use assets decreased by £1.3m to £16.7m (2024: £18.0m), primarily
reflecting net additions of £4.0m, offset by right-of-use depreciation of
£5.2m (2024: £4.7m). No exchange gains or losses were recognised in relation
to right-of-use assets (2024: loss of £0.8m).
The net deferred tax liability decreased by £4.8m to a liability of £8.6m
(2024: liability of £13.4m). The decrease is primarily the result of the
amortisation of acquired intangible assets, actuarial losses on the pension
scheme and the recognition of UK tax losses in the period.
Pension schemes
On an IAS 19R accounting basis, the gross defined benefit pension scheme
valuation of the UK scheme showed a surplus of £6.8m compared to a surplus of
£16.5m last year. The present value of scheme liabilities decreased by
£17.8m as benefit payments made in the year and an increase in the discount
rate to 5.60% (2024: 4.85%) were partially offset by a loss in relation to
updated mortality assumptions. The value of scheme assets decreased by £27.5m
largely due to benefit payments made in the year.
In the current year, the Group reached agreement with the Trustee on the 31
March 2024 triennial actuarial valuation for the UK defined benefit scheme.
The actuarial deficit at 31 March 2024 was £11.7m (2021: £35.8m). The
current deficit repair contributions were reconfirmed at £3.8m per annum from
1 April 2022 to June 2027 (increasing with CPI, capped at 5%, each year). It
was agreed that there would be no further deficit repair contributions after
June 2027.
The agreement also included a mechanism where deficit repair contributions
would be diverted into an escrow account when the scheme is deemed to be in
surplus on a technical provisions basis. In addition, the Group will
contribute up to a maximum of £1.0m per annum to cover pension administrative
expenses should asset investment performance not be sufficient to cover the
ongoing management fees. The 2027 triennial actuarial valuation is expected to
take place during the year ending 31 March 2028.
The Group's cash contributions to its defined contribution pension schemes
were £3.8m (2024: £3.9m).
Funding, liquidity and capital allocation framework
The Group has committed banking facilities of £130m (plus a £70m uncommitted
accordion) with a maturity date of the facility of October 2027. The Group has
also now confirmed a capital allocation framework of 1) Organic investment; 2)
Ordinary dividends; 3) Complementary acquisitions; and 4) Supplementary
distributions. Alongside this framework are investment guardrails of
maintaining leverage below 2.0x underlying EBITDA and dividend cover of c.3.0x
in addition to the strategic objectives of cash conversion above 90% and a
ROCE target of 20% in the medium term.
Johnson Tiles SA
As previously announced, as a result of challenging demand conditions in the
tile manufacturing segment and a material increase in tile manufacturing
capacity in the area, we have commenced a strategic review of Johnson Tiles SA
which we expect to conclude shortly. Johnson Tiles SA delivered external
revenue in the year of £12.3m, a small operating loss pre-South African
central costs and an operating cash outflow of £4.4m. The Johnson Tiles SA
performance has been included in the underlying results for the period.
Principal risks and uncertainties
Risk management remains a priority for the Group to help sustain the success
of the business in the future. There is a range of potential risks and
uncertainties which could have a material impact on the Group's performance.
The objective of our risk management framework is to support the business in
meeting its strategic and operational objectives through the identification,
monitoring and mitigation of risks within clearly defined risk appetite levels
for each risk category.
The Board has carried out a robust assessment of the principal risks and taken
them into consideration when assessing the long-term viability of the Company.
The principal risks are listed below and they do not comprise all the risks
that the Group may face, and are not listed in any order of priority.
Strategic risks include the risks associated with future acquisitions.
· Environmental, Social and Governance (ESG) risks include the risks
associated with stakeholder requirements and reporting requirements.
· People risks include the risks associated with staff retention and
recruitment. The Board's paramount concern as regards our people is to keep
them safe.
· Commercial risks include risks associated with market conditions,
the loss of key customers and competition.
· Operational risks include the risks associated with the reliance on
production facilities and the loss of a key supplier.
· Financial risks include the risks associated with exchange rates,
maintaining a suitable level of funding and liquidity and those associated
with managing the defined benefit pension scheme.
· Information technology and cyber security risks include the risk of
reliance on automated processes and systems and the increasing sophistication
of cyber-crime.
Further details on the principal risks including detailed descriptions and
mitigating actions are presented in the Annual Report and Accounts.
Responsibility statement
Each of the Directors, whose names and functions are listed below, confirms
that, to the best of their knowledge:
· The consolidated financial statements, prepared in accordance with
the applicable United Kingdom law and in conformity with UK-adopted
international accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and the
undertakings included in the consolidation taken as a whole;
· The business review includes a fair review of the development and
performance of the business and the position of the Group and the undertakings
included in the consolidation taken as a whole; and
· There have been no significant individual related party
transactions during the year.
Directors: Steve Good (Board Chair and Non-Executive Director), Thomas
Willcocks (Chief Executive Officer), James Eyre (Chief Financial Officer),
Alison Littley (Non-Executive Director), Stefan Allanson (Non-Executive
Director) and Rebecca DeNiro (Non-Executive Director).
Thomas Willcocks
Chief Executive Officer
James Eyre
Chief Financial Officer
Consolidated income statement
Year ended 31 March 2025
Notes 2025 2024
£m £m
Continuing operations
Revenue 2 368.1 392.1
Underlying operating profit 43.2 43.2
IAS 19R administrative expenses (1.8) (1.3)
Acquisition and disposal related costs 3 (25.4) (4.3)
Exceptional operating items 3 (7.7) 2.3
Operating profit 8.3 39.9
Finance costs 4 (7.1) (8.1)
IAS 19R finance credit 0.8 0.8
Profit before taxation 2.0 32.6
Taxation 1.5 (5.8)
Profit for the year attributable to equity holders of the Company 3.5 26.8
Earnings per share attributable to equity holders of the Company
Basic earnings per share:
From profit for the year 6 3.9p 30.1p
Diluted earnings per share:
From profit for the year 6 3.9p 29.8p
Weighted average number of shares for basic earnings per share (m) 89.5 89.0
Alternative performance measures
Underlying profit before taxation (£m) 5 36.5 36.4
Underlying earnings (£m) 5 29.2 28.8
Basic underlying earnings per share 6 32.6p 32.4p
Diluted underlying earnings per share 6 32.4p 32.1p
Consolidated statement of comprehensive income
Year ended 31 March 2025
2025 2024
£m £m
Profit for the year 3.5 26.8
Other comprehensive income and expense:
Items that will not subsequently be reclassified to the Income Statement
Actuarial losses on retirement benefit obligations (8.9) (1.4)
Items that may be subsequently reclassified to the Income Statement
Cash flow hedges - fair value gain in year 0.1 1.0
Foreign currency translation of foreign operations 0.3 (5.3)
Other comprehensive expense for the year (8.5) (5.7)
Total comprehensive result for the year attributable to equity holders (5.0) 21.1
of the Company
Items in the statement are disclosed net of tax.
Consolidated balance sheet
At 31 March 2025
2025 2024
£m £m
Non-current assets
Goodwill 107.4 107.3
Intangible assets 46.1 53.9
Property, plant and equipment 21.8 28.1
Deferred tax asset 1.4 0.7
Pension scheme asset 6.8 16.5
Right-of-use assets 16.7 18.0
200.2 224.5
Current assets
Inventories 88.2 97.4
Trade and other receivables 71.7 72.6
Current tax assets 1.5 -
Cash and cash equivalents 22.7 30.8
Asset held for sale 3.7 -
187.8 200.8
Current liabilities
Trade and other payables (86.7) (89.1)
Lease liabilities (6.5) (6.3)
Current tax liabilities (1.0) (2.5)
Derivative financial instruments (0.5) (0.6)
Provisions (0.5) (0.7)
(95.2) (99.2)
Net current assets 92.6 101.6
Total assets less current liabilities 292.8 326.1
Non-current liabilities
Financial liabilities - borrowings (59.5) (68.1)
Lease liabilities (14.1) (15.9)
Deferred tax liabilities (10.0) (14.1)
Other non-current liabilities (0.2) (4.6)
Provisions (1.1) (1.0)
(84.9) (103.7)
Net assets 207.9 222.4
Financed by:
Share capital 8.9 8.9
Share premium 47.6 47.6
Retained earnings and other reserves 151.4 165.9
Total equity 207.9 222.4
Consolidated cash flow statement
Year ended 31 March 2025
Note 2025 2024
£m £m
Cash generated from operations 7 28.3 49.0
Income taxes paid (3.4) (5.6)
Interest paid (6.4) (6.8)
Net cash generated from operating activities 18.5 36.6
Cash flows from investing activities
Proceeds from sale of property 3.5 -
Purchase of property, plant and equipment and intangible assets (6.9) (7.3)
Net cash used in investing activities (3.4) (7.3)
Cash flows from financing activities
Purchase of treasury shares (0.1) (0.8)
Costs of raising debt finance - (0.2)
Principal element of lease payments (5.1) (4.9)
Drawdown of borrowings 21.0 18.0
Repayment of borrowings (30.0) (29.0)
Dividends paid to the Company's shareholders (9.2) (9.1)
Net cash used in financing activities (23.4) (26.0)
Net (decrease)/increase in cash and cash equivalents (8.3) 3.3
Cash and cash equivalents at the beginning of the year 30.8 29.0
Exchange movements on cash and cash equivalents 0.2 (1.5)
Cash and cash equivalents at the end of the year 22.7 30.8
Consolidated statement of changes in equity
Year ended 31 March 2025
Ordinary Share Treasury Hedging Translation Retained Total
share premium reserve reserve reserve earnings equity
capital £m £m £m £m £m £m
£m
At 1 April 2023 8.9 47.6 (0.1) (1.4) (21.1) 176.5 210.4
Comprehensive income:
Profit for the year - - - - - 26.8 26.8
Other comprehensive expense:
Actuarial loss on retirement benefit obligations - - - - - (1.4) (1.4)
Fair value gain on cash flow hedges - - - 1.0 - - 1.0
Foreign currency translation adjustments - - - - (5.3) - (5.3)
Total other comprehensive expense for the year - - - 1.0 (5.3) (1.4) (5.7)
Transactions with owners:
Purchase of treasury shares - - (0.8) - - - (0.8)
Dividends paid - - - - - (9.1) (9.1)
Settlement of share option schemes - - 1.1 - - (1.2) (0.1)
Value of employee services - - - - - 0.9 0.9
At 31 March 2024 8.9 47.6 0.2 (0.4) (26.4) 192.5 222.4
Comprehensive income:
Profit for the year - - - - - 3.5 3.5
Other comprehensive expense:
Actuarial loss on retirement benefit obligations - - - - - (8.9) (8.9)
Fair value gain on cash flow hedges - - - 0.1 - - 0.1
Foreign currency translation adjustments - - - - 0.3 - 0.3
Total other comprehensive expense for the year - - - 0.1 0.3 (8.9) (8.5)
Transactions with owners:
Purchase of treasury shares - - (0.1) - - - (0.1)
Dividends paid - - - - - (9.2) (9.2)
Settlement of share option schemes - - 0.6 - - (1.1) (0.5)
Value of employee services - - - - - 0.3 0.3
At 31 March 2025 8.9 47.6 0.7 (0.3) (26.1) 177.1 207.9
Notes to the preliminary statement
Year ended 31 March 2025
1. Basis of preparation
Norcros plc (the Company), and its subsidiaries (together the Group), is a
market-leading designer and supplier of high-quality bathroom and kitchen
products in the UK, Europe and South African markets.
The Company is a public limited company which is listed on the London Stock
Exchange market of listed securities and is incorporated and domiciled in the
UK. The address of its registered office is Ladyfield House, Station Road,
Wilmslow, SK9 1BU.
The financial information presented in this preliminary statement is extracted
from, and is consistent with, the Group's audited financial statements for the
year ended 31 March 2025. The financial information set out above does not
constitute the Company's statutory financial statements for the periods ended
31 March 2025 or 31 March 2024 but is derived from those financial statements.
Statutory financial statements for 2025 will be delivered following the
Company's annual general meeting. The auditors have reported on those
financial statements; their report was unqualified and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
The Group's results have been prepared in accordance with UK-adopted
International Accounting Standards and with the accounting policies set out in
the Annual Report and Accounts consistently applied to all periods.
Going concern
In adopting the going concern basis for preparing the financial statements,
the Directors have considered the Group's business activities and the
principal risks and uncertainties including current macroeconomic factors in
the context of the current operating environment.
The Group, in acknowledging its TCFD requirements, has also considered
climate risks in the financial statements. A going concern financial
assessment was developed on a bottom-up basis by taking the output of the
annual budgeting process built up by individual businesses and then subjected
to review and challenge by the Board. The financial model was then stress
tested by modelling the most extreme but plausible scenario, that being a
global pandemic similar in nature to COVID-19. This has been based on the
actual impact of the COVID-19 pandemic on the Group, which, at its peak, saw a
revenue reduction of 25% on the prior year over a six-month period. The
scenario also incorporates management actions the Group has at its disposal,
including a number of cash conservation and cost reduction measures including
capital expenditure reductions, dividend decreases and restructuring
activities.
The Group continues to exhibit sufficient and prudent levels of liquidity
headroom against our key banking financial covenants during the 12-month
period under assessment. Reverse stress testing has also been applied to the
financial model, which represents a further decline in sales compared with the
reasonable worst case. Such a scenario, and the sequence of events which could
lead to it, is considered to be implausible and remote.
As a result of this detailed assessment, the Board has concluded that the
Company is able to meet its obligations when they fall due for a period of at
least 12 months from the date of this report. For this reason, the Company
continues to adopt the going concern basis for preparing the Group financial
statements. In forming this view, the Board has also concluded that no
material uncertainty exists in its use of the going concern basis of
preparation.
2. Segmental reporting
Year ended 31 March 2025
UK and Ireland South Group
£m Africa £m
£m
Revenue 256.4 111.7 368.1
Underlying operating profit 39.8 3.4 43.2
IAS 19R administrative expenses (1.8) - (1.8)
Acquisition and disposal related costs (25.2) (0.2) (25.4)
Exceptional operating items (6.2) (1.5) (7.7)
Operating profit 6.6 1.7 8.3
Finance costs (6.3)
Profit before taxation 2.0
Taxation 1.5
Profit for the year 3.5
Net debt excluding lease liabilities (36.8)
Segmental assets 302.8 85.2 388.0
Segmental liabilities (153.9) (26.2) (180.1)
Additions to tangible, intangibles and right-of-use assets 6.2 4.5 10.7
Depreciation and amortisation 11.5 5.0 16.5
Year ended 31 March 2024
UK and Ireland South Group
£m Africa £m
£m
Revenue 281.9 110.2 392.1
Underlying operating profit 38.4 4.8 43.2
IAS 19R administrative expenses (1.3) - (1.3)
Acquisition and disposal related costs (4.1) (0.2) (4.3)
Exceptional operating items 2.3 - 2.3
Operating profit 35.3 4.6 39.9
Finance costs (7.3)
Profit before taxation 32.6
Taxation (5.8)
Profit for the year 26.8
Net debt excluding lease liabilities (37.3)
Segmental assets 334.6 90.7 425.3
Segmental liabilities (171.8) (31.1) (202.9)
Additions to tangible, intangibles and right-of-use assets 7.2 4.1 11.3
Depreciation and amortisation 10.9 4.6 15.5
The split of revenue by geographical destination of the customer is below:
2025 2024
£m £m
UK and Ireland 224.1 251.0
Africa 112.8 111.4
Rest of World 31.2 29.7
368.1 392.1
No one customer had revenue over 10% of total Group revenue (2024: none).
3. Acquisition and disposal related costs and exceptional operating items
An analysis of acquisition and disposal related costs and exceptional
operating items is shown below:
Acquisition and disposal related costs 2025 2024
£m £m
Intangible asset amortisation(1) 6.5 6.5
Advisory fees(2) 1.1 0.2
Johnson Tiles UK loss on disposal and associated property costs(3) 22.2 -
Deferred contingent consideration(4) (3.0) (3.0)
Deferred remuneration(5) (1.4) 0.6
25.4 4.3
(1 ) Non-cash amortisation charges in respect of acquired intangible
assets.
(2 ) Professional advisory fees incurred in connection with the Group's
business combination activities.
(3 ) On 19 May 2024, the trade and assets of the Johnson Tiles UK
division were sold to Johnson Tiles Limited, a new company incorporated and
run by the former divisional management team. The sale completed at a
consideration lower than the carrying value of the assets of the business and
as a result the Group incurred a non-cash loss on disposal of £22.2m. Revenue
in the period of £4.3m (2024: £31.1m) and the underlying operating profit in
the period of £nil (2024: £0.7m) have been included in the underlying
results for the current and prior year. In addition, the Group incurred £1.6m
of remediation costs in relation to the site retained following the sale of
the trade and assets. These costs are partially offset by a £1.6m profit on
the subsequent sale of part of the site to Johnson Tiles Limited.
(4 ) Relates to the release of the deferred contingent consideration
arising on the acquisition of Grant Westfield.
(5) In accordance with IFRS 3, a proportion of the deferred contingent
consideration had been treated as remuneration and, accordingly, expensed to
the Income Statement as incurred. In the current year the accrued deferred
remuneration was released. In the prior year a cost of £0.6m in relation to
the Grant Westfield acquisition was recognised.
Exceptional operating items 2025 2024
£m £m
Restructuring costs(1) 4.6 1.7
Costs in relation to new Enterprise Resource Planning systems(2) 2.0 -
Legal case(3) 1.1 -
Reversal of impairment(4) - (4.0)
7.7 (2.3)
(1 ) In the current year, restructuring costs of £4.6m have been
incurred, predominantly in relation to the consolidation of warehousing and
distribution costs at Grant Westfield. In the prior year, exceptional
restructuring costs of £1.7m were incurred in relation to the restructuring
programme implemented at Johnson Tiles UK and the warehouse consolidation at
VADO.
(2 ) Costs incurred in relation to the implementation of new Enterprise
Resource Planning systems.
(3 ) Costs incurred in the year and the estimated future economic outlay
in relation to an ongoing legal case.
(4 ) The reversal of previous land and buildings impairments of the
Johnson Tiles UK site, following an independent valuation in the prior year.
4. Finance costs
2025 2024
£m £m
Interest payable on bank borrowings 5.0 5.2
Interest on lease liabilities 1.7 1.6
Discounting of deferred contingent consideration - 0.9
Amortisation of costs of raising debt finance 0.4 0.4
Finance costs 7.1 8.1
5. Alternative performance measures
The Group makes use of a number of alternative performance measures to assess
business performance and provide additional useful information to
shareholders. Such alternative performance measures should not be viewed as a
replacement of, or superior to, those defined by Generally Accepted Accounting
Principles (GAAP). Definitions of alternative performance measures used by the
Group and, where relevant, reconciliations from GAAP-defined reporting
measures to the Group's alternative performance measures are provided below.
The alternative performance measures used by the Group are:
Measure Definition
Underlying operating profit Operating profit before IAS 19R administrative expenses, acquisition and
disposal related costs and exceptional operating items.
Underlying profit before taxation Profit before taxation before IAS 19R administrative expenses, acquisition and
disposal related costs, exceptional operating items, amortisation of costs of
raising finance, discounting of deferred contingent consideration, discounting
of property lease provisions and finance costs relating to pension schemes.
Underlying taxation Taxation on underlying profit before tax.
Underlying earnings Underlying profit before tax less underlying taxation.
Underlying capital employed Capital employed on a pre-IFRS 16 basis adjusted for business combinations
where relevant to reflect the assets in both the opening and closing capital
employed balances, and the average impact of exchange rate movements.
Underlying operating margin Underlying operating profit expressed as a percentage of revenue.
Underlying return on capital employed (ROCE) Underlying operating profit on a pre-IFRS 16 basis expressed as a percentage
of the average of opening and closing underlying capital employed.
Basic underlying earnings per share Underlying earnings divided by the weighted average number of shares for basic
earnings per share.
Diluted underlying earnings per share Underlying earnings divided by the weighted average number of shares for
diluted earnings per share.
Underlying EBITDA Underlying EBITDA is derived from underlying operating profit before
depreciation and amortisation excluding the impact of IFRS 16 in line with our
banking covenants.
Underlying operating cash flow Cash generated from continuing operations before cash outflows from
exceptional items and acquisition and disposal related costs and pension fund
deficit recovery contributions.
Underlying net debt/cash Underlying net debt/cash is the net of cash, capitalised costs of raising
finance and total borrowings. IFRS 16 lease commitments are not included in
line with our banking covenants.
Pro-forma underlying EBITDA An annualised underlying EBITDA figure used for the purpose of calculating
banking covenant ratios.
Pro-forma leverage Net debt expressed as a ratio of pro-forma underlying EBITDA.
Underlying profit and underlying earnings per share measures provide
shareholders with additional useful information on the underlying performance
of the Group. This is because these measures are those principally used by the
Directors to assess the performance of the Group and are used as the basis for
calculating the level of the annual bonus and long-term incentives earned by
the Directors. Underlying ROCE is one of the Group's strategic key performance
indicators and is therefore provided so that shareholders can assess the
Group's performance in relation to its strategic targets. Underlying EBITDA
and underlying operating cash flow are also used internally by the Directors
in order to assess the Group's cash generation. The term 'underlying' is not
recognised under IFRS and consequently the Group's definition of underlying
may differ from that used by other companies.
Reconciliations from GAAP-defined reporting measures to the Group's
alternative performance measures
Consolidated Income Statement
(a) Underlying profit before taxation and underlying earnings
2025 2024
£m £m
Profit before taxation 2.0 32.6
Adjusted for:
- IAS 19R administrative expenses 1.8 1.3
- IAS 19R finance income (0.8) (0.8)
- acquisition and disposal related costs (see note 3) 25.4 4.3
- exceptional operating items (see note 3) 7.7 (2.3)
- amortisation of costs of raising finance 0.4 0.4
- discounting of deferred contingent consideration - 0.9
Underlying profit before taxation 36.5 36.4
Taxation attributable to underlying profit before taxation (7.3) (7.6)
Underlying earnings 29.2 28.8
(b) Underlying operating profit and EBITDA (pre-IFRS 16)
2025 2024
£m £m
Operating profit 8.3 39.9
Adjusted for:
- IAS 19R administrative expenses 1.8 1.3
- acquisition and disposal related costs (see note 3) 25.4 4.3
- exceptional operating items (see note 3) 7.7 (2.3)
Underlying operating profit 43.2 43.2
Adjusted for:
- depreciation and amortisation (owned assets) 4.8 4.3
- depreciation of leased assets 5.2 4.7
- lease costs (6.8) (6.5)
Underlying EBITDA (pre-IFRS 16) 46.4 45.7
Consolidated Cash Flow Statement
(a) Underlying operating cash flow
2025 2024
£m £m
Cash generated from operations (see note 7) 28.3 49.0
Adjusted for:
- cash flows from exceptional items and acquisition and disposal related costs 7.5 3.4
(see note 7)
- pension fund deficit recovery contributions 3.1 4.0
Underlying operating cash flow 38.9 56.4
Consolidated Balance Sheet
(a) Underlying capital employed and underlying return on capital employed
2025 2024
£m £m
Net assets 207.9 222.4
Adjusted for:
- pension scheme asset (net of associated tax) (5.1) (12.4)
- right-of-use assets (IFRS 16) (16.7) (18.0)
- lease liabilities (IFRS 16) 20.6 22.2
- cash and cash equivalents (22.7) (30.8)
- financial liabilities - borrowings 59.5 68.1
243.5 251.5
Foreign exchange adjustment 1.5 (1.9)
Adjustment for acquisitions (15.3) -
Underlying capital employed 229.7 249.6
Average underlying capital employed 240.6 251.7
Underlying operating profit (pre-IFRS 16) 41.6 41.4
Underlying return on capital employed 17.3% 16.4%
6. Earnings per share
Basic EPS is calculated by dividing the profit attributable to shareholders by
the weighted average number of ordinary shares in issue during the year,
excluding those held in the Norcros Employee Benefit Trust.
For diluted EPS, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all potential dilutive ordinary shares. At 31
March 2025, the potential dilutive ordinary shares amounted to 513,488 (2024:
811,567) as calculated in accordance with IAS 33.
The calculation of EPS is based on the following profits and numbers of
shares:
2025 2024
£m £m
Profit for the year 3.5 26.8
2025 2024
Number Number
Weighted average number of shares for basic earnings per share 89,497,030 89,003,947
Share options 513,488 811,567
Weighted average number of shares for diluted earnings per share 90,010,518 89,815,514
2025 2024
Basic earnings per share:
From profit for the year 3.9p 30.1p
Diluted earnings per share:
From profit for the year 3.9p 29.8p
Basic and diluted underlying earnings per share
Basic and diluted underlying earnings per share have also been provided which
reflects underlying earnings from continuing operations divided by the
weighted average number of shares set out above.
2025 2024
£m £m
Underlying earnings (see note 5) 29.2 28.8
2025 2024
Basic underlying earnings per share 32.6p 32.4p
Diluted underlying earnings per share 32.4p 32.1p
7. Consolidated cash flow statement
(a) Cash generated from operations
The analysis of cash generated from operations is given below:
Continuing operations
2025 2024
£m £m
Profit before taxation 2.0 32.6
Adjustments for:
- IAS 19R administrative expenses included in the Income Statement 1.8 1.3
- acquisition and disposal related costs included in the Income Statement 25.4 4.3
- exceptional items included in the Income Statement 7.7 (2.3)
- finance costs included in the Income Statement 7.1 8.1
- IAS 19R finance credit included in the Income Statement (0.8) (0.8)
- cash flows from exceptional items and acquisition and disposal related costs (7.5) (3.4)
- settlement of share options (0.5) -
- depreciation of property, plant and equipment 4.4 4.0
- underlying amortisation 0.4 0.3
- depreciation of right-of-use assets 5.2 4.7
- pension fund deficit recovery contributions (3.1) (4.0)
- IFRS 2 charges 0.3 0.9
Operating cash flows before movement in working capital 42.4 45.7
Changes in working capital:
- (increase)/decrease in inventories (10.3) 2.9
- (increase)/decrease in trade and other receivables (4.4) 9.3
- increase/(decrease) in trade and other payables 0.6 (8.9)
Cash generated from operations 28.3 49.0
(b) Analysis of underlying net cash/(debt)
Cash Current Non-current Underlying
£m borrowings borrowings net debt
£m £m £m
At 1 April 2023 29.0 - (78.9) (49.9)
Cash flow 3.3 - 11.0 14.3
Non-cash finance costs - - (0.2) (0.2)
Exchange movement (1.5) - - (1.5)
At 31 March 2024 30.8 - (68.1) (37.3)
Cash flow (8.3) - 9.0 0.7
Non-cash finance costs - - (0.4) (0.4)
Exchange movement 0.2 - - 0.2
At 31 March 2025 22.7 - (59.5) (36.8)
Non-cash finance costs relate to the movement in the costs of raising debt
finance in the year.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UASVRVVUNAARRecent news on Norcros
See all newsREG - Norcros PLC - Results for the year ended 31 March 2025
AnnouncementRCS - Norcros PLC - Investor Webinar
AnnouncementREG - Norcros PLC - Trading update for the year ended 31 March 2025
AnnouncementREG - Norcros PLC - Total Voting Rights
AnnouncementREG - Norcros PLC - Block Listing 6 Monthly Return
Announcement