REG - Norcros PLC - Trading Update

NorcrosAnnouncement

14/04/2022 07:16

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RNS Number : 3346I  Norcros PLC  14 April 2022

 

 

 

14 April 2022

Trading Update

Norcros plc ("Norcros" or the "Group"), a market leading supplier of high
quality and innovative bathroom and kitchen products, will announce its
preliminary results for the year ended 31 March 2022(1) on 9 June 2022. In
advance of this, the Group is providing the following trading update.

 

Full year trading performance ahead of expectations

The Group has continued to trade robustly, acting decisively to counter
unprecedented cost inflation and navigate exceptional supply chain challenges.
The Board now expects underlying operating profit for the year to 31 March
2022(1) to be at a record level and ahead of its previous expectations.

 

Group revenue for the year ended 31 March 2022(1) is expected to be in the
region of £396 million (2021: £324.2 million, 2020: £342.0 million), 22.2%
above prior year on a reported basis and 20.6% above on a constant currency
basis.

 

Against a pre-pandemic FY20 comparator, this represents a 15.8% increase on
FY20 on a reported basis, 18.6% above on a constant currency basis and 20.8%
above on a constant currency LFL(3) basis.

 

                        Revenue increase on prior year           Revenue increase on FY20
                        Reported                                 Reported  LFL(3)
                        H1           H2           FY             FY        H1       H2       FY
 UK                     39.6%        (0.4%)       16.6%          13.9%     17.5%    14.8%    16.1%
 South Africa           68.5%        11.1%        34.0%          19.6%     10.9%    35.9%    21.9%
 South Africa at CC(2)  52.4%        11.1%        28.6%          28.1%     20.0%    43.8%    30.5%
 Group                  48.5%        3.4%         22.2%          15.8%     15.1%    21.5%    18.1%
 Group at CC(2)         43.8%        3.4%         20.6%          18.6%     18.4%    23.6%    20.8%

 

Our UK business has continued to perform strongly with revenue at 16.6% above
prior year and 16.1% above FY20 on a like for like "LFL(3)" basis, benefitting
from the breadth of its distribution channels, stock availability and market
leading service levels.

 

Our South African business also continued to perform robustly, reflecting its
leading market positions, stock availability and enhanced product offer
resulting in increasing share gains in the second half. Revenue for the year
was 28.6% higher than prior year and 30.5% higher than FY20 on a constant
currency LFL(3) basis.

 

Financial position

The Group remains in a strong financial position and has invested in inventory
in the period to optimise our service and stock availability proposition in
the light of exceptional supply chain challenges. Net cash (on a pre-IFRS 16
basis) at 31 March 2022(1) is expected to be circa £7 million (2021: net cash
of £10.5 million, 2020: net debt of £36.4 million).

 

Refinancing of banking facilities

The Group is pleased to announce that it has agreed a new, £130 million
multicurrency revolving credit facility ("RCF") with four lenders. The
facility is for an initial three year and seven month term, with two further
years as extension options, and includes the option for an uncommitted
accordion facility of £70 million.

 

Triennial pension scheme valuation

The Group has reached agreement recently with the Trustee on the 2021
triennial actuarial valuation for the UK defined benefit scheme and on a new
deficit recovery plan. The actuarial deficit at 31 March 2021 was £35.8m
(2018: £49.3m). Deficit repair contributions have been agreed at £3.8m per
annum from 1 April 2022 to March 2027 (increasing with CPI, capped at 5%, each
year).

 

Groundwell - exit from last onerous property lease

The Group has also reached agreement with the landlord to exit early the only
remaining surplus and legacy onerous property lease at Groundwell, Swindon
which was expiring on 23 June 2022. A cash settlement payment of £1.3 million
including dilapidation obligations was made in the period. Annualised holding
costs were previously £0.6m.

 

Notice of results

The Group will announce its full year results for the year ended 31 March
2022(1) on Thursday 9 June 2022.

 

Nick Kelsall, Chief Executive Officer, said:

 

"Norcros has continued to build on last year's strong recovery from the
unprecedented global disruption and uncertainty caused by the pandemic. It is
particularly pleasing to see how well our businesses both in the UK and South
Africa have continued to make strong progress notwithstanding the supply chain
challenges and a period of exceptional cost inflation.

 

Whilst market conditions are likely to remain uncertain, exacerbated by the
situation in Ukraine, the Board believes that the Group's highly experienced
management teams, leading brands, proven business model, and leading customer
service proposition will continue to drive outperformance leading to further
progress in the year ahead."

 

( )

(1. )The accounting reference 'year to 31 March 2022' relates to the 52-week
accounting period commencing on 5 April 2021 and ending 3 April 2022

(2. )CC refers to constant currency basis

(3. )LFL adjusts 2020 revenue from a 53 to a 52 week period pro-rating and H1
2020 revenue from a 27 week to a 26 week pro rating

 

 

 

Enquiries

 Norcros plc                            Tel: 01625 547700
 Nick Kelsall, Chief Executive Officer
 James Eyre, Chief Financial Officer

 Hudson Sandler                         Tel: 0207 796 4133
 Nick Lyon

 Sophie Miles

Notes to Editors

Norcros is a market leading supplier of high quality and innovative bathroom
and kitchen products with operations primarily in the UK and South Africa.

 

·    Based in the UK, Norcros operates under seven brands:

 

 •    Triton - Market leader in the manufacture and marketing of showers in the UK
 •    Merlyn - The UK and Ireland's No.1 supplier of shower enclosures and trays to
      the residential, commercial and hospitality sectors
 •    Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom
      accessories and valves
 •    Croydex - A market-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 - The leading manufacturer and supplier of ceramic tiles in the
      UK
 •    Norcros Adhesives - Manufacturer of tile and stone adhesives, grouts and
      related products

 

 

·    Based in South Africa, Norcros operates under four brands:

 

 •    Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles,
      and associated products such as sanitaryware, showers and adhesives
 •    Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles
 •    TAL - The leading manufacturer of ceramic and building adhesives
 •    House of Plumbing - Market leading supplier of specialist plumbing materials

 

·    Norcros is headquartered in Wilmslow, Cheshire and employs around
2,200 people. The Company is listed on the London Stock Exchange. For further
information please visit the Company website: http://www.norcros.com
(http://www.norcros.com)

 

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