REG - Norcros PLC - Trading Update <Origin Href="QuoteRef">NXR.L</Origin>

NorcrosAnnouncement

12/04/2017 07:01

RNS Number : 2537C
Norcros PLC
12 April 2017
12 April 2017
("Norcros", the "Group" or the "Company")
Trading Update
Norcros, the market leading supplier of innovative branded showers, taps, bathroom accessories, tiles and adhesives will announce its preliminary results for the year ended 31 March 2017 on 14 June 2017. In advance of this, the Group is providing the following trading update.
Trading
Group underlying operating profit1for the year is expected to be in line with the Board's expectationsreflecting a robust performance and demonstrating the Group's resilience.
Group revenue for the year is expected to be in the region of 271m (2016: 235.9m), 14.9% higher than the prior year, 10.6% higher on a constant currency basis, and 4.0% higher on a constant currency like for like basis2.
Reported
Constant
Currency
Constant Currency LFL2
FY
FY
H1
H2
FY
UK
+11.7%
+11.7%
( 5.0)%
8.3%
1.8%
South Africa
+22.1%
+ 8.4%
10.0%
7.0%
8.4%
Group
+14.9%
+10.6%
( 0.2)%
7.9%
4.0%
UK revenue for the year was 11.7% higher than the prior year reflecting a stronger performance in the second half of the year and the success of the Group's acquisition strategy. Abode which was acquired on 31 March 2016 has integrated well into the Group and performed in line with the Board's expectations in the year. Vado and Croydex, acquired in March 2013 and June 2015 respectively, also continued to make good progress. On a like for like basis2, UK revenue was 1.8% higher than the prior year reflecting a strong recovery in all segments in the second half (+8.3%) following softer conditions in the first half of the year (-5.0%).
Our South African business again delivered strong revenue growth, 8.4% higher than the prior year on a constant currency basis and 22.1% higher on a reported basis, continuing the sustained progress of recent years.
Reorganisation
In order to improve operating performance and better align capacity with demand, in March 2017, the Group commenced a restructuring of its UK tiles business. The reorganisation will increase Johnson Tiles' manufacturing flexibility, reduce inventory and involve the loss of around 90 jobs. This will result in a charge of around 2.3million, to be treated as an exceptional operating item and recognised in the financial year ended 31 March 2017 with the subsequent cash outflow occurring in the first half of 2017/18. It is expected that the restructuring will pay back in cash terms within twelve months.
Financial position
Closing year end net debt is expected to be around 24m (2016: 32.5m), due to continued good cash generation in the second half of the year. 
Outlook
Despite the widely documented challenging markets, the Group has achieved another year of growth and is in a strong financial position with a well managed pension situation. The Board is confident that the Group is well placed to make further progress.
Nick Kelsall, Group Chief Executive, commented
"The Group expects to deliver its eighth consecutive year of revenue and underlying operating profit growth during a period of variable trading conditions. This demonstrates the success and resilience of the Group's business portfolio and operating model. 
The Group continues to focus on growth, both organically and via acquisitions. It is particularly pleasing to note the strong performances from our South African operations and the acquired businesses of Vado, Croydex and Abode. We continue to actively pursue complementary opportunities in line with our stated strategy.
We closely monitor market conditions and accordingly, proactively manage our cost base and our deployment of capital.
We are pleased with our performance over the year, and the Board believes the Group remains well positioned to make further progress." 

1Underlying operating profit excludes IAS 19R administrative expenses, acquisition related costs and exceptional operating items
2LFL / like for like excludes Abode revenues (acquired 31 March 2016) and Croydex quarter one revenues (acquired 25 June 2015)
ENQUIRIES:
Norcros plc
Tel: 01625 547 700
Nick Kelsall, Group Chief Executive
Shaun Smith, Group Finance Director
Hudson Sandler
Tel: 0207 796 4133
Nick Lyon
Charlie Jack
Notes to Editors
 Norcros is a leading supplier of high quality and innovative showers, taps, bathroom accessories, ceramic wall and floor tiles and adhesive products with operations primarily in the UK and South Africa.
 Based in the UK, Norcros operates under six brands:
Triton Showers - Market leader in the manufacture and marketing of showers in the UK
Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom accessories and valves
Croydex - Amarket-leading, innovative designer, manufacturer and distributor of high quality bathroom furnishings and accessories
Abode - A leading niche designer and distributor of high quality kitchen taps, bathroom taps and kitchen sinks
  Johnson Tiles - A leading manufacturer and supplier of ceramic tiles in the UK
Norcros Adhesives - Manufacturer of tile & stone adhesives, grouts and related products
 Based in South Africa, Norcros operates under three brands:
Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitary ware, showers and adhesives
Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles
TAL - The leading manufacturer of ceramic and building adhesives
 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: http://www.norcros.com

This information is provided by RNS
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