REG - Norcros PLC - Trading Update

NorcrosAnnouncement

13/04/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230413:nRSM0267Wa&default-theme=true

RNS Number : 0267W  Norcros PLC  13 April 2023

 

13 April 2023

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 2023(1) on 15 June 2023. In
advance of this, the Group is providing the following trading update.

 

Full year trading performance - Underlying operating profit up 10% and in line
with market expectations(2)

 

The Group has continued to demonstrate resilience in its business model,
trading well against the challenging macroeconomic backdrop and the Board
expects underlying operating profit for the year to 31 March 2023(1) to be at
a record level and in line with market expectations(2).

 

Group revenue for the year ended 31 March 2023(1) is expected to be
approximately £440 million (2022: £396.3 million), 11.3% above prior year on
a reported basis and 1.5% above on a constant currency "CC(3)" and like for
like(4) "LFL" basis.

 

                        Revenue increase on prior year
                        Reported  LFL(4)
                        FY        H1        H2        FY
 UK                     15.2%     (3.4%)    3.3%      (0.2%)
 South Africa           3.9%      10.0%     (2.2%)    3.9%
 South Africa at CC(3)  4.6%      9.7%      (0.6%)    4.6%
 Group                  11.3%     1.2%      1.3%      1.3%
 Group at CC(3)         11.5%     1.1%      1.9%      1.5%

 

Our UK business has continued to perform well, with revenue at 15.2% above
prior year on a reported basis and broadly in line with prior year on a LFL(4)
basis. Our performance demonstrated the breadth of our distribution channels,
strong stock management and excellent levels of service resulting in market
share gains.

 

Our South African business continued to perform robustly, despite market
conditions being more challenging in the second half of the year, gaining
share as a result of our market leading positions and stock availability.
Reported revenue for the year was 3.9% higher than prior year and 4.6% higher
than prior year on a constant currency basis.

 

Financial position and extension of banking facilities

The Group remains in a strong financial position with net debt (on a pre-IFRS
16 basis) at 31 March 2023(1) expected to be circa £50 million (2022: net
cash of £8.6 million). The year on year movement principally reflects the
acquisition of Grant Westfield.

 

The Group has extended its £130 million multicurrency revolving credit
facility ("RCF") for a further year. The facility has a three year and seven
month term to October 2026, with a further year extension available. It also
includes the option for an uncommitted accordion facility of £70 million.

 

Norcros Adhesives - closure

It is with regret we have commenced the closure of Norcros Adhesives, a small
but loss making division with the loss of 70 jobs. Norcros Adhesives
represented approximately 3% of Group revenue in the year. The revenues and
approximately £3 million of underlying operating losses are included in the
underlying financial results for the year. In addition, costs relating to the
closure of circa £5 million (of which circa £2 million represents the gross
cash cost) will be separately reported as an exceptional item in the results
to 31 March 2023(1). This represents a cash payback period of less than one
year. The net impact on cash is not expected to be significant.

 

Notice of results

The Group will announce its full year results for the year ended 31 March
2023(1) on Thursday 15 June 2023.

 

Thomas Willcocks, Chief Executive Officer, said:

 

"Norcros has delivered record results, again demonstrating resilience and
market share growth, notwithstanding the significant macroeconomic challenges.
Whilst market conditions are likely to remain uncertain in the short term, the
Board believes that the Group's proven business model, leading customer
service proposition, leading brands and highly experienced management teams
will continue to deliver market share growth in the year ahead.

 

Whilst I have been with the Group since 2006, and a member of the Executive
team at Norcros since August 2021, I was delighted to join the Board from 1
April 2023 as CEO. I would like to take this opportunity, on behalf of myself
and the Board, to thank Nick Kelsall for his outstanding commitment to the
Group over the last thirty years. He has left the Group in an excellent
position to continue growing market share in what remain fragmented and
attractive markets. We wish him a long and healthy retirement."

( )

(1.) The accounting reference 'year to 31 March 2023' relates to the 52-week
accounting period commencing on 4 April 2022 and ending 2 April 2023

(2.) Norcros compiled market consensus for the year to 31 March 2023
underlying operating profit is £45.9 million

(3.) CC refers to constant currency basis

(4.) LFL excludes Grant Westfield, which was acquired on 31 May 2022

 

 

 

 

 

Enquiries

 Norcros plc                                Tel: 01625 547700
 Thomas Willcocks, 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

·       Multipanel - Grant Westfield is a leading manufacturer of
high-end waterproof bathroom wall panels

·       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

 

·    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
2,300 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)

 

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  TSTQLLFFXZLFBBX