REG - Norcros PLC - Trading update

NorcrosAnnouncement

11/04/2024 07:00

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RNS Number : 0965K  Norcros PLC  11 April 2024

11 April 2024

 

 

Trading update - Underlying operating profit in line with expectations

 

 

Norcros plc ("Norcros" or the "Group"), a market-leading designer and supplier
of high quality bathroom and kitchen products in the UK, Europe and South
African markets will announce its full year results for the year ended 31
March 2024(1) on 13 June 2024. In advance of this, the Group is pleased to
provide the following trading update.

 

Trading

 

The Group has continued to demonstrate the strength of its business in a
challenging demand environment, and the Board expects underlying operating
profit for the year ended 31 March 2024 to be in line with market
expectations(2).

 

Overall Group revenue for the year ended 31 March 2024 is expected to be circa
£390 million (2023: £441.0 million), 11.1% below prior year on a reported
basis and 6.1% below on a constant currency ("CC") like for like ("LFL(3)")
basis.

 

                     Revenue versus prior year
                     Reported       LFL(3)
 UK                  (4.7%)         (3.3%)
 South Africa        (24.1%)        (24.1%)
 South Africa at CC  (12.3%)        (12.3%)
 Group               (11.1%)        (10.4%)
 Group at CC         (7.0%)         (6.1%)

 

Our market-leading UK business has performed robustly, with revenue 3.3% below
prior year on a LFL basis with year on year improvement in operating margins.
This improvement has been driven by ongoing portfolio management, our proven
new product development programme and our positioning within the more
resilient mid-premium segment of the RMI market.

 

Our South African business performed resiliently, despite the challenging
market conditions aggravated by the significant and unpredictable power
interruptions in H1.  Reported revenue for the year was 12.3% lower than
prior year on a CC basis. The local management team has implemented proactive
self-help initiatives and, notwithstanding improved power availability, we
expect the recovery in demand to be gradual.

 

Financial position and extension of banking facilities

 

The Group remains in a strong financial position, maintaining its historically
high levels of cash generation, with net debt (on a pre-IFRS 16 basis) at 31
March 2024 expected to be circa £37 million (2023: net debt of £49.9
million). This represents leverage of less than 0.9x underlying EBITDA and
provides a solid foundation from which the Group can execute its strategic
priorities.

 

Net Zero targets - SBTi approved

We are pleased to announce that the Group's targets for Near Term and Net Zero
emission targets have been validated and approved by the Science Based Targets
initiative ("SBTi") and we continue to make progress to reduce our emissions.
Our approved targets are listed on the Science Based Targets website:
https://sciencebasedtargets.org/companies-taking-action
(https://sciencebasedtargets.org/companies-taking-action)

 

Notice of results and capital markets event

 

The Group will announce its full year results for the year ended 31 March 2024
on Thursday 13 June 2024. Ahead of this, there will be a Capital Markets Event
on Wednesday 1 May 2024. For further details please contact
norcros@hudsonsandler.com (mailto:norcros@hudsonsandler.com) .

 

Thomas Willcocks, Chief Executive Officer, said:

 

"Norcros has again demonstrated the strength of its business and leading
positions in its end markets, delivering solid results notwithstanding the
macroeconomic challenges. The Group's focus on continuing portfolio
management, our collective organic growth accelerators and scale-based
operational efficiencies will continue to deliver profitable market share
growth in the year ahead."

 

( )

1.       The accounting reference 'year to 31 March 2024' relates to the
52-week period commencing on 3 April 2023 and ending 31 March 2024

2.       Norcros-compiled market consensus for the year to 31 March 2024
underlying operating profit is £42.7 million

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

 

 

 

 

 

Enquiries

 Norcros plc                                Tel: 01625 547700
 Thomas Willcocks, Chief Executive Officer
 James Eyre, Chief Financial Officer

 Hudson Sandler                             Tel: 0207 796 4133
 Nick Lyon

 Lucy Wollam-Coles

Notes to Editors

Norcros is a market-leading designer and supplier of high quality bathroom and
kitchen products in the UK, Europe and South African markets.

In the UK, Norcros operates under seven brands, Triton, Merlyn, 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 2,300
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)

 

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