REG - Norcros PLC - Trading Update

NorcrosAnnouncement

12/10/2023 07:00

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RNS Number : 8612P  Norcros PLC  12 October 2023

 

12 October 2023

 

Trading update

Norcros plc, a market leading group providing design led, high quality
bathroom and kitchen products, today releases its scheduled trading update
ahead of announcing its Interim Results for the 26 weeks to 1 October 2023 on
16 November 2023.

 

Robust trading performance in line with expectations

The Group delivered a robust H1 performance despite the challenging demand
environment, reflecting market share gains driven by successful new product
launches, the strength of our customer proposition and the breadth of our
distribution channels.

 

               H1 revenue increase/(decrease)
               Reported     CC(1)        CC(1) LFL(2)
 UK            1%           1%           (1%)
 South Africa  (25%)        (11%)        (11%)
 Group         (8%)         (3%)         (4%)

 

In our UK business, reported revenue for the first half was 1% higher than the
previous year and on a LFL(2) basis, just 1% lower with Triton and Merlyn
performing particularly strongly. We continue to proactively manage our
capital allocation and, in this regard, will be reducing manufacturing
capacity at Johnson Tiles (UK) by approximately 50% in response to lower UK
tile demand. Costs associated with this of circa £1.4m will be reported
separately as an exceptional item.

 

In South Africa, notwithstanding national energy supply constraints impacting
home market demand, our market leading business, brands, and experienced
management team, continued to take market share, albeit revenue for the first
half was 11% lower than the record prior year on a CC(1) basis.

 

Group revenue for the 26 week period is approximately £202m (2022: £219.9m),
4% lower on a constant currency LFL(2) basis and 8% lower on a reported basis
than the record prior year comparator.

 

Our performance in the first half of this financial year continues to reflect
the strength of our in-house product development capabilities, leading brands
and excellent customer service proposition. We expect to report an underlying
operating profit in the first half of the year of no less than £21m (2022:
£22.0m).

 

Financial position

The balance sheet remains strong with net debt of approximately £48m on a
pre-IFRS16 basis (net debt of £58.9m as at 30 September 2022 and £49.9m as
at 31 March 2023). This represents leverage of approximately 1.0x net debt to
EBITDA. The Group has committed banking facilities of £130m maturing October
2026.

 

Senior management appointment

We are pleased to announce the appointment from 2 January 2024 of Helene
Roberts to the executive committee of the Norcros Group as Managing Director
for the UK and Ireland. Helene succeeds Thomas Willcocks following his
appointment as Chief Executive Officer in April 2023. Helene joins from
Robinson plc, the European plastic and packaging manufacturer, where she was
CEO for four years. Helene brings extensive leadership experience and a strong
track record in sustainable product development and sourcing.

 

Outlook

The Board remains confident that our experienced management teams and
consistent execution of strategy will continue to deliver market share gains
for the year ending 31 March 2024 and expect full year operating profit to be
in line with market expectations (3).

 

(1.)( )CC refers to constant currency basis

(2.)( )LFL (like for like) adjusted for Grant Westfield (acquired 31 May
2022) and Norcros Adhesives

(3.)( )Norcros compiled market consensus for the year to 31 March 2024 is for
an underlying operating profit of £43.4 million

 

 

 

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 design and service led bathroom and kitchen business with market
leading brands operating primarily in the UK and South Africa.

 

In the UK, Norcros operates under seven brands, Triton, Merlyn, Multipanel
(Grant Westfield), Vado, Croydex, Abode, and Johnson Tiles.

 

In South Africa, Norcros operates under four brands, Tile Africa, House of
Plumbing, TAL, and Johnson Tiles.

 

Norcros is headquartered in Wilmslow, Cheshire and employs around 2,400
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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