REG - Norcros PLC - Trading update

NorcrosAnnouncement

10/10/2024 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:20241010:nRSJ6126Ha&default-theme=true

RNS Number : 6126H  Norcros PLC  10 October 2024

 

10 October 2024

 

 

Trading update

 

Norcros plc, the market leading designer and supplier of high quality
sustainable bathroom and kitchen products, will announce its Interim Results
for the 26 weeks to 29 September 2024 on 21 November 2024. In advance of this,
the Group is pleased to provide the following trading update.

 

Resilient trading performance with profit in line with market expectations

 

The Group's performance in H1 has continued to demonstrate the strength of our
market leading brands and market positions in a challenging demand
environment.

 

Our in-house product design and development capabilities, excellent customer
service and  the ongoing implementation of our strategy have ensured that we
continue to grow market share and are well placed to capitalise on our
position as the market recovers.

 

Group revenue for the 26-week period is expected to be in line with the
previous year on a constant currency (CC) LFL(1) basis. Reported revenue is
expected to be 7% lower than the previous year at approximately £188 million
(2023: £201.6 million). Underlying operating profit is expected to be at
least £19.5 million (2023: £21.4 million) in the first half of the year.

 

                        H1 revenue versus prior year
                        LFL              Reported
 UK                     1%               (9%)
 South Africa           (1%)             (1%)
 South Africa at CC(2)  (2%)             (2%)
 Group                  0%               (7%)
 Group at CC            0%               (7%)

 

In our UK business, LFL revenue for the first half was 1% higher than the
prior year, with market share gains driven by continued new product
development and cross selling programmes. Reported revenue was 9% lower than
the previous year largely due to the sale of Johnson Tiles UK which completed
in May this year. During the period we successfully completed the
consolidation of the warehousing and distribution functions at both Grant
Westfield and Vado. One off cash cost, associated with this investment of
circa £2 million will be reported separately as an exceptional item.

 

In our South African business, revenue for the first half was 1% lower than
the prior year on a reported basis and 2% lower on a CC basis. Encouragingly,
there have been no electricity supply interruptions in the last four months,
however, consumer sentiment is yet to improve and therefore trading conditions
remain challenging.

 

Financial position

 

The Group remains in a strong financial position with net debt (on a pre-IFRS
16 basis) at 29 September 2024 expected to be circa £45 million (net debt of
£46.6 million as at 30 September 2023 and £37.3 million as at 31 March 2024)
reflecting a normal seasonal cashflow trend. This represents leverage of
approximately 1.0x underlying EBITDA and provides a solid foundation from
which the Group can further execute its strategic priorities.

 

Outlook

 

The Board remains confident that our market leading positions and strategy
implementation will continue to deliver market share gains for the year ending
31 March 2025. Despite the ongoing challenging market conditions, the Board
expects full year underlying operating profit to be in line with market
expectations(3) and to show further progress towards our medium-term targets.

 

(1.)( )LFL (like for like) adjusted for Johnson Tiles UK and Norcros
Adhesives

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

(3.)( )Norcros compiled market consensus for the year to 31 March 2025 is for
an underlying operating profit of £43.2 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

 Lucy Wollam-Coles

Notes to Editors

Norcros is a market leading group of brands specialising in design led,
sustainable bathroom and kitchen products across the UK, Ireland, South
Africa, and select export markets. Each of our brands offers mid-premium
product ranges distinguished by their innovation, design, and commitment to
sustainability, all backed by industry leading service to our trade and retail
customers.

 

Through a strategic blend of acquisitions and organic growth, Norcros has
become the UK and Ireland's number one bathroom products group. We see
significant potential for further expansion within this large and fragmented
market, accelerating growth and capturing market share through continued
acquisitions, organic development, operational excellence, and meaningful ESG
capabilities.

 

Norcros encompasses the renowned brands, Triton, Merlyn, Grant Westfield,
Vado, Croydex, and Abode in the UK, and Tile Africa, TAL, Johnson Tiles South
Africa, and House of Plumbing in South Africa.

 

Norcros is headquartered in Wilmslow, Cheshire and employs around 2,100
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  TSTDKLFBZBLFFBZ