TIDMNXR
RNS Number : 2348O
Norcros PLC
09 June 2022
9 June 2022
Norcros plc
Results for the year ended 31 March 2022
Record underlying operating profit and strong financial
position
Norcros, a market leading supplier of high quality and
innovative bathroom and kitchen products, today announces its
results for the year ended 31 March 2022.
Financial Summary
2022 2021 % change 2020 % change
2022 v 2021 2022 v 2020
Revenue GBP396.3m GBP324.2m +22.2% GBP342.0m +15.9%
---------- ---------- ------------- ----------- -------------
Revenue constant currency
LFL +20.6% +20.9%
---------- ---------- ------------- ----------- -------------
Underlying operating
profit(1) GBP41.8m GBP33.8m +23.7% GBP32.3m +29.4%
---------- ---------- ------------- ----------- -------------
Underlying profit before
taxation(1) GBP39.3m GBP30.6m +28.4% GBP28.8m +36.5%
---------- ---------- ------------- ----------- -------------
Diluted Underlying EPS(1) 38.2p 31.1p +22.8% 28.2p +35.5%
---------- ---------- ------------- ----------- -------------
Underlying operating
cash flow(1) GBP28.6m GBP65.8m -56.5% GBP38.4m -25.5%
---------- ---------- ------------- ----------- -------------
Operating profit GBP36.2m GBP24.9m +45.4% GBP17.8m +103.4%
---------- ---------- ------------- ----------- -------------
Underlying net cash/(debt)(1) GBP8.6m GBP10.5m (GBP36.4m)
---------- ---------- ------------- ----------- -------------
Dividend per share 10.0p 8.2p +21.9% 3.1p +222.6%
---------- ---------- ------------- ----------- -------------
(1) Definitions and reconciliations of alternative performance
measures are provided in note 5
Highlights
-- Robust trading and decisive action taken to counter
unprecedented cost inflation and supply chain challenges
-- Strong execution of strategy
-- Full year revenue of GBP396.3m (2021: GBP324.2m), 20.6%
higher than prior year on a constant currency basis and 20.9%
higher than the pre-pandemic 2020 comparator on a constant currency
like for like basis (after adjusting the 2020 comparator period
from a 53 to a 52 week period pro-rating)
-- Record underlying operating profit of GBP41.8m, 23.7% higher than prior year (2021: GBP33.8m)
-- Underlying net cash of GBP8.6m (2021: net cash of GBP10.5m)
-- Underlying ROCE above strategic target rate at 23.9% (2021: 18.2%)
-- Diluted underlying EPS of 38.2p, 22.8% higher than prior year (2021: 31.1p)
-- Progressive dividend at 10.0p for the year (2021: 8.2p)
-- The acquisition of Grant Westfield completed after the year
end, a compelling strategic fit with the Group
Current trading
-- Group revenue in the two months to the end of May 2022 was
marginally ahead of the strong prior year comparator by
approximately 1% and significantly ahead of the pre-pandemic
comparator of the two months ended May 2019 by approximately 25%.
Whilst market conditions are likely to remain uncertain, the Board
believes that the Group's proven business model and leading
customer service proposition will continue to drive outperformance
leading to further progress and market share gains, in line with
its expectations, for the year to 31 March 2023.
Gary Kennedy , Chair, commented:
"I am pleased to report a record performance for the Group.
Norcros has continued its recovery following the period of
exceptional global disruption and uncertainty caused by the
COVID-19 pandemic. Furthermore, the resilience of the Group's
business model and strategy has proven once again to be highly
effective through a period of unprecedented cost inflation and
supply chain challenges."
There will be a presentation today at 9.30 am for analysts at
the offices of Hudson Sandler, 25 Charterhouse Square, London, EC1M
6AE. The supporting slides will be available on the Norcros website
at http://www.norcros.com later in the day.
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 eight 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
-- Multipanel - Grant Westfield is a leading manufacturer of
high-end waterproof bathroom wall panels
-- 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 2,400 people. The Company is listed on the London Stock
Exchange. For further information please visit the Company website:
http://www.norcros.com
Chair's Statement
Overview
In my first year as Chair, I am pleased to report a record
performance for the Group. Norcros has continued its recovery
following the period of exceptional global disruption and
uncertainty caused by the COVID-19 pandemic. The resilience of the
Group's business model and strategy has proven once again to be
highly effective through a period of unprecedented cost inflation,
supply chain challenges and more recently the Ukraine crisis.
Group revenue for the year was GBP396.3m (2021: GBP324.2m),
22.2% higher than the prior year on a reported basis and 20.6%
higher on a constant currency basis. Against the pre-pandemic 2020
comparator, this represents a 15.9% increase on a reported basis,
18.6% on a constant currency basis and 20.9% on a constant currency
like for like basis after adjusting the 2020 comparator period from
a 53 to a 52 week period pro-rating.
Underlying operating profit was at a record level of GBP41.8m
(2021: GBP33.8m), 23.7% ahead of the prior year reflecting the
strong progress and market share gains in both the UK and South
Africa.
The Group finished the year with net cash of GBP8.6m (2021: net
cash of GBP10.5m), reflecting investment into inventory in the
period to optimise our service and stock availability in the light
of the exceptional supply chain challenges.
Acquisition of Grant Westfield
On 31 May 2022, we completed the acquisition of 100% of the
share capital of Granfit Holdings Limited and its subsidiaries
including Grant Westfield Limited, trading as Multipanel. Grant
Westfield is a leading manufacturer of high-end waterproof bathroom
wall panels. The Company has a 140 year track record and operates
under the leading UK bathroom wall panel brand Multipanel.
Headquartered in Edinburgh, Scotland, customers are served from a
nationwide UK distribution network of 8 locations, and a growing
presence in Europe from a distribution hub in Germany. Customers
include national and regional merchants, major buying groups,
specification and online customers.
Strategy
Notwithstanding the challenges of COVID-19, we have made strong
strategic progress and our focused growth strategy continues to be
valid and relevant. Our targets to grow Group revenue to GBP600m by
2025 whilst sustaining a pre-tax return on underlying capital
employed of more than 15% over the economic cycle continue to
govern how we evaluate opportunities and deploy capital. The
Group's performance in the year demonstrates the resilience and
effectiveness of our business model and strategy. Whilst there is
still a significant degree of uncertainty around the post-COVID-19
economic recovery, supply chain challenges and the Ukraine crisis,
we are convinced of the validity and effectiveness of the strategy
and remain committed to these targets.
Dividend
The Group responded swiftly to the impact of the COVID-19
pandemic and the need to preserve cash by not paying a final
dividend in relation to the year ended 31 March 2020 nor an interim
dividend in relation to the year ended 31 March 2021. Based on the
improved trading performance in the second half of the prior year,
the further strengthening of the balance sheet and the outlook, the
Board reinstated the progressive dividend policy with a final (and
total) dividend for 2021 of 8.2p per share. For the year ended 31
March 2022, the Board is recommending a final dividend of 6.9p
(2021: 8.2p) per share. When combined with the interim dividend of
3.1p (2021: nil) per share, which was paid on 11 January 2022, this
will make a total dividend for the year of 10.0p (2021: 8.2p) per
share, a 21.9% increase on the previous year in line with the
growth in earnings albeit maintaining a prudent level of cover.
Pension scheme
The net position relating to our UK defined benefit pension
scheme (as calculated under IAS 19R) has improved to a surplus
position of GBP19.6m at 31 March 2022 from a deficit of GBP18.3m at
31 March 2021, primarily as a result of an increase in the discount
rate driven by market factors.
The Group has reached agreement with the Trustee on the 2021
triennial actuarial valuation for the UK defined benefit scheme and
on a new deficit recovery plan. Deficit repair contributions have
been agreed at GBP3.8m per annum from 1 April 2022 to March 2027
(increasing with CPI, capped at 5%, each year). Both the Group and
the Trustee regard this as an appropriate outcome.
We remain confident that our pension obligations continue to be
appropriately funded and well managed. The Group recognises that
the pension scheme is a key stakeholder and the Group and the
Trustee continue to work constructively together.
Environmental, social and governance (ESG)
The Board remains committed to embedding sustainability within
our business strategy. We recognise that our stakeholders,
including employees, investors and our customers have rising
expectations about our environmental and social impacts and in the
way that we operate our business. We are proud of our history of
environmental and social leadership, our achievements in setting
industry leading standards in our products and the support we
provide our communities. This year, we have made enhancements to
our emissions and energy data collection process and are pleased to
include in our Annual Report and Accounts our first report aligned
to the recommendations of the Task Force on Climate-Related
Financial Disclosures ("TCFD"), which outlines our approach to
managing climate-related risks and opportunities across the Group.
We also report on the enhanced structure of our ESG management
internally which has helped us develop our framework and improve
the management of our impact.
Board changes and senior management appointments
As previously announced, I was appointed as a Non-executive
Director and Non-executive Board Chair on 8 December 2021. I am
delighted to join the Board and be part of the future growth of the
Group. I would like to thank David McKeith who was acting chair for
the Group from April 2021 until my appointment.
As previously reported, James Eyre was appointed to the Board as
Chief Financial Officer with effect from 1 August 2021 following
Shaun Smith's retirement at the end of December 2021. James was our
Corporate Development and Strategy Director and has been a member
of the Group's senior team since 2014, responsible for leading our
acquisitions. He is a Chartered Accountant and held senior finance
roles at AstraZeneca, Bank of Ireland and Rothschild & Co prior
to joining Norcros.
The Board composition can be found in our Annual Report and
Accounts.
As previously announced, Thomas Willcocks was appointed to the
Group senior executive team as Group Business Director - UK, with
effect from 1 August 2021. Thomas joined Norcros South Africa in
2006 and was promoted to Managing Director of Norcros South Africa
in 2009. He has overseen the sustained and profitable growth of our
South African business. Kevin Swan succeeded Thomas as Managing
Director of Norcros South Africa, also from 1 August 2021, having
joined Norcros in March 2021. He was previously Chief Executive of
Bidvest Packaging.
The Group executive committee comprises our CEO (Nick Kelsall),
CFO (James Eyre), Group Counsel/Company Secretary (Richard Collins)
and Group Business Director - UK (Thomas Willcocks).
Governance
As Chair, one of my primary responsibilities is to ensure that
the Group continues to operate to the highest standards in all
aspects of governance and risk management. Our aim at Norcros has
always been to operate in line with our values and the "Norcros
DNA" which sets us apart from our competitors, while ensuring that
proper operating procedures and internal controls are maintained at
all times. Transparency is central to this objective and you will
find more detail about our approach and progress over the last year
in the Corporate Governance section in our Annual Report and
Accounts.
People
The Board continues to regard our employees as our most valuable
asset and in recognition of this the Group aims to create a safe
and positive working environment within an open, transparent and
entrepreneurial culture and de-centralised operating model. On
behalf of the Board, I would like to thank the Group's employees
who have helped to deliver on the Group's strategic objectives and
in particular for their dedication and contribution over the last
twelve months. I would also like to warmly welcome the management
team and employees of the Grant Westfield business to the
Group.
Current trading
Group revenue in the two months to the end of May 2022 was
marginally ahead of the strong prior year comparator by
approximately 1% and significantly ahead of the pre-pandemic
comparator of the two months ended May 2019 by approximately
25%.
Summary
The Group has delivered a robust performance and a record result
despite challenging market conditions. This demonstrates the
effectiveness and resilience of our Group with its highly
experienced management teams, leading brands, proven business
model, leading customer service proposition and strong financial
position. In addition, through the acquisition of Grant Westfield,
the Group has taken a further important step forward in its growth
strategy.
Market conditions are likely to remain uncertain and
challenging, albeit the Board is confident that the Group's
resilient business model and strong execution of strategy will
continue to deliver outperformance leading to further progress and
market share gains in line with its expectations in the year
ahead.
Chief Executive Officer's Statement
Overview
Norcros has ended the year reporting record levels of revenue
and underlying operating profit and a net cash position.
We have continued to build on last year's strong recovery from
the COVID-19 pandemic against a backdrop of unprecedented cost
inflation and exceptional supply chain challenges. It is
particularly pleasing to see how well our businesses in the UK and
South Africa responded and adapted to these challenges and
continued to make the strong progress in performance. It is a
testament to our management teams, proven business model, supply
chain infrastructure and our leading customer service
proposition.
Group revenue at GBP396.3m (2021: GBP324.2m) increased by 22.2%
on a reported basis and by 20.6% on a constant currency basis.
Revenue was also 20.9% higher than the pre-pandemic comparator of
2020 on a constant currency like for like basis (after adjusting
the 2020 comparator period from a 53 to a 52 week period
pro-rating). The strong trading performance in the first half of
the year continued into the second half with further revenue growth
in South Africa and a robust performance in the UK.
Group underlying operating profit for the year increased by
23.7% to a record of GBP41.8m (2021: GBP33.8m) reflecting the
increased revenue in the year and an operating margin slightly
ahead of last year at 10.5% (2021: 10.4%). Management acted
decisively to counter unprecedented cost inflation and supply chain
challenges to protect margins through implementing selling price
increases and ensuring superior levels of stock availability and
service.
Revenue in the UK was GBP256.7m for the year (2021: GBP220.2m),
16.6% higher than the prior year on a reported basis and 16.1%
higher than 2020 on a like for like basis. Buoyant demand in the
RMI sector, market share gains (supported by excellent stock
availability) and increased selling prices to recover higher input
costs, were the key drivers. All businesses apart from Johnson
Tiles (which was relatively more impacted by the slower recovery in
the commercial sector) delivered revenue growth on the pre-pandemic
levels in 2020 and all divisions outperformed the prior year.
UK underlying operating profit for the year was a record at
GBP30.9m (2021: GBP26.9m) with an underlying operating margin of
12.0%, (2021: 12.2%). Underlying operating profit growth was driven
by a strong performance across the UK businesses.
Operating cashflow was lower than prior year as a result of
investment into working capital, primarily inventory.
Revenue in South Africa increased by 28.8% on prior year on a
constant currency basis, and 34.2% higher on a Sterling reported
basis, to GBP139.6m (2021: GBP104.0m). Revenue was also 30.7%
higher than 2020 on a constant currency like for like basis. All
divisions delivered revenue growth on both prior year and 2020.
Tile Africa, Johnson Tiles and TAL continued to benefit from
higher demand and market share gains in the retail renovation
market, while House of Plumbing's growth from new branch openings
was partially offset by subdued activity in the large-scale
commercial building segment.
South African underlying operating profit for the year was at a
record level of GBP10.9m (2021: GBP6.9m), largely reflecting strong
retail demand and a GBP0.2m foreign exchange translation gain from
a stronger Rand. Underlying operating margin was 7.8% (2021:
6.6%).
As in the UK, operating cashflow was lower than prior year as a
result of investment into working capital, primarily inventory.
Acquisition of Grant Westfield
On 31 May 2022 we completed the acquisition of 100% of the share
capital of Granfit Holdings Limited and its subsidiaries including
Grant Westfield Limited, trading as Multipanel. The acquisition was
funded through equity and utilisation of the Group's banking
facilities. Grant Westfield is a quality business with a strong
track record of profitability and cash generation run by an
experienced and capable management team. We welcome all the
employees to the Norcros Group and expect the business to make a
strong contribution to the Group through its complementary range of
waterproof bathroom wall panels.
Strong financial position
The Group has a strong balance sheet with net cash of GBP8.6m
(2021: net cash of GBP10.5m). This position reflects a planned
investment into working capital in the year of GBP23.6m,
particularly inventory, with a resultant underlying operating cash
flow of GBP28.6m (2021: GBP65.8m) in the year.
The Group completed a refinancing of its banking facilities in
the second half of the year. The new facility is a GBP130m
multicurrency revolving credit facility for an initial three year
and seven month term, with two further years as extension options.
There is also an uncommitted accordion facility of GBP70m. The
Group therefore remains well-positioned to progress its growth
strategy.
Following the acquisition of Grant Westfield in May 2022,
proforma leverage is approximately 1.0x EBITDA.
Strategy remains valid
In April 2018 we launched a refreshed strategy for growth and a
2023 vision for the Group, including an updated set of strategic
targets which were: to increase Group revenue to GBP600m by 2023;
to maintain revenue derived outside of the UK at approximately 50%
of Group revenue; and to sustain a pre-tax return on underlying
capital employed of more than 15% over the economic cycle. The
previous timescale of 2023 was extended to 2025 in the prior year
reflecting the COVID-19 disruption. Notwithstanding the extended
timeframe, the strategy remains valid and we have performed
strongly against these targets as detailed below:
-- Group revenue increased by 22.2% to GBP396.3m (2021:
GBP324.2m; original 2023 target: GBP600m).
-- On a Sterling reported basis, Group revenue derived outside
of the UK was 43.9% (2021: 41.6%), and in constant currency terms,
from when the targets were set, 47.0% (2021: 45.6%).
-- Group underlying return on capital employed was 23.9% on a
pre-IFRS 16 basis (2021: 18.2%) and significantly exceeded our
strategic target of 15%.
The Group's very strong recovery from the COVID-19 pandemic and
the decisive response to the inflationary and supply chain
challenges continue to demonstrate the resilience of our business
model and the effectiveness of our strategy.
The UK bathroom and kitchen product market remains highly
fragmented with significant consolidation opportunities to either
broaden our product portfolio or further consolidate our current
offerings. The significant strength of the balance sheet means the
business is well placed to take advantage of further acquisitions
or organic growth opportunities as they arise.
Sustained investment in new product development will continue to
drive organic growth alongside our market leading brands, customer
service and best in class quality. Our product vitality rate (the
percentage of revenue in the period derived from new products
launched in the last three years) remained high at 29% (2021: 28%)
but marginally short of our demanding target of 30% mainly due to
the COVID-19 related disruption to supply chains and the temporary
closure of retail showrooms in recent years postponing projects.
Our vitality rates are nonetheless market leading and are expected
to increase again as our new product launches return to
pre-COVID-19 levels.
Summary and outlook
The Group has outperformed expectations, recovering very
strongly from the pandemic and then successfully navigating a
period of unprecedented cost inflation and supply chain challenges.
Our performance on all fronts is a testament to our business model
and our employees, particularly against the backdrop of challenging
markets as demand continues to adjust to the impact of 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, gain market share and benefit from their leading
brands, supply chain infrastructure and stock availability.
Whilst the recovery has been strong, the normalisation of
consumer spending patterns in addition to pressure on household
disposable incomes will provide some uncertainty in our markets. In
addition, the secondary impacts of the COVID-19 pandemic and the
Ukraine crisis remains difficult to predict. Notwithstanding these
uncertainties, we are confident that our supply chain
infrastructure combined with our local inventory holdings will
ensure our leading competitive position is maintained.
In summary, we have ended the year strongly, outperforming our
expectations and our markets and delivered record levels of revenue
and profit and growth on prior year and the pre-pandemic
levels.
Whilst market conditions are likely to remain uncertain, the
Board believes that the Group's proven business model and leading
customer service proposition will continue to drive outperformance
leading to further progress and market share gains, in line with
its expectations, for the year to 31 March 2023.
Business performance
2022 2021
GBPm GBPm
-------------------------------- ----- -----
Revenue 396.3 324.2
-------------------------------- ----- -----
Operating profit 36.2 24.9
IAS 19R administrative expenses 1.7 1.4
Acquisition related costs 4.8 3.7
Exceptional operating items (0.9) 3.8
-------------------------------- ----- -----
Underlying operating profit 41.8 33.8
-------------------------------- ----- -----
2022 2021
GBPm GBPm
-------------------------------------------------- ----- -----
Revenue - UK 256.7 220.2
Revenue - South Africa 139.6 104.0
-------------------------------------------------- ----- -----
Revenue - Group 396.3 324.2
-------------------------------------------------- ----- -----
Underlying operating profit - UK 30.9 26.9
Underlying operating profit - South Africa 10.9 6.9
-------------------------------------------------- ----- -----
Underlying operating profit - Group 41.8 33.8
-------------------------------------------------- ----- -----
Underlying operating profit margin - UK 12.0% 12.2%
Underlying operating profit margin - South Africa 7.8% 6.6%
-------------------------------------------------- ----- -----
Underlying operating profit margin - Group 10.5% 10.4%
-------------------------------------------------- ----- -----
2022 2021
GBPm GBPm
-------------------------------------------------------- ------ -----
Underlying operating profit 41.8 33.8
Depreciation of right of use assets 4.1 4.0
Lease costs (5.7) (5.3)
Depreciation and underlying amortisation (owned assets) 5.2 5.4
-------------------------------------------------------- ------ -----
Underlying EBITDA 45.4 37.9
Net working capital movement (23.6) 21.8
Share-based payments 1.1 1.0
Operating profit impact of IFRS 16 1.6 1.3
Depreciation of right of use assets 4.1 4.0
Cash settlement of share options - (0.2)
-------------------------------------------------------- ------ -----
Underlying operating cash flow 28.6 65.8
-------------------------------------------------------- ------ -----
2022 2021
-------------------------------------- ----- -----
Basic underlying earnings per share 38.9p 31.2p
Diluted underlying earnings per share 38.2p 31.1p
-------------------------------------- ----- -----
Business review - UK
In the UK, full year revenue was 16.6% higher than the prior
year on a reported basis at GBP256.7m (2021: GBP220.2m). We have
continued to build on last year's strong recovery from the COVID-19
pandemic, the impact of which appears to be reducing. Demand was
driven by an increase in RMI activity and a robust private new
housebuilding sector, where we enjoy market leading positions.
Exports also performed well in the year. The commercial and local
authority sectors have taken longer to recover but are showing
early signs of improved demand in the year ahead.
Our businesses further capitalised on these market conditions by
a planned reinvestment in inventory levels to help mitigate the
significant supply chain challenges in the period, which benefited
from our well-established supplier infrastructure in China. This
targeted investment in inventory, combined with our experienced and
dedicated staff, and a strong new product development pipeline
helped deliver meaningful market share growth over the period in
our chosen markets and segments. Whilst overheads were carefully
managed as we emerged from the disruption of the previous year, we
experienced unprecedented raw material, freight, and energy cost
increases. These cost increases were largely recovered through
price increases to our customers and margins continue to be closely
monitored.
Further progress has been made on our ESG initiatives, with the
businesses specifically focused on our Carbon Management Plans. We
are particularly proud of the fact that Triton has achieved The
Carbon Trust Standard with a 38% reduction in CO2 footprint over
the assessment period and has now embarked on becoming net carbon
zero as part of our 'cleaner conscience' campaign by 2025. Further
detail is included in our Annual Report and Accounts.
The business and our teams continue to be mindful of the risks
associated with the ongoing COVID-19 pandemic. Whilst the impact of
the pandemic appears to be reducing, we continue to ensure that
every reasonable action is being taken to provide a safe working
environment for all our team members. We are proud of the
resilience and agility demonstrated by our teams and partners and
are confident that we are well positioned to continue to profitably
grow market share in the year ahead.
Underlying operating profit for the year grew by GBP4.0m to a
record level of GBP30.9m (2021: GBP26.9m) with an operating margin
of 12.0% (2021 12.2%). This increase in profitability mainly
reflected the benefits of the operational leverage resulting from
the significant increase in revenue in the period.
Triton
Revenue at Triton, the UK's market leader in showers, was
GBP60.1m (2021: GBP54.5m), 10.3% higher than the prior year and
26.3% higher than the pre-COVID 2020 comparator on a like for like
basis.
Triton has benefited from strong retail sales over the last two
years by ensuring product availability and maintaining high
customer service levels. As a result, as competitors struggled to
react to the challenging situation, Triton was able to build on its
market leading position taking an increasing market share in
electric and mixer showers which has been retained. Retail sector
revenue increased by 2.9% in the year and by 31.2% in comparison to
2020 on a like for like basis.
Following an initial delay in the recovery of contract, housing
and local authority business, the trade sector revenue has returned
strongly. Trade sector revenue in the year was 22.1% higher than
prior year and 21.3% higher than 2020 on a like for like basis.
Export revenue also performed strongly with 11.0% growth on the
prior year and 31.5% growth against 2020 on a like for like
basis.
Proud to be manufactured in Britain for over 45 years and a
member of the "Made in Britain" scheme since 2014, Triton is known
as a leader in electric shower innovation with a focus on its
environmental credentials. Our 'cleaner conscience' TV and press
campaigns highlighting the environmental and financial benefits of
showering less have been well received. Further initiatives were
introduced in the year such as 100% recycled bags for shipping,
30%+ recycled content plastic packaging, carbon neutral paper for
all production (such as installation instructions) and electric
vehicles within the fleet.
During the year Triton continued to work with The Carbon Trust
with the target to be net carbon zero by the end of 2025, Triton's
50th anniversary year.
New products continue to be a key driver in maintaining Triton's
long-term leading market position where ongoing investment and new
product launches have proven successful. Notable revenue growth in
the year was delivered from the Omnicare Ultra, a shower range for
the care and adaptations segment. Triton's Enrich electric shower
won an award in the year as the product of choice by installers
and, overall Triton was awarded the Feefo Platinum Trusted Service
award for demonstrating outstanding service to customers.
Triton again delivered a high level of underlying operating
profit ahead of the prior year combined with good cash
conversion.
Merlyn
Merlyn, the UK and Ireland's no. 1 supplier of shower enclosures
and trays to the residential, commercial and hospitality sectors,
performed strongly and recorded revenue of GBP58.3m (2021:
GBP43.3m), growth of 34.6% on the prior year and 39.8% against 2020
on a like for like basis. The business continued to grow its market
share, leveraging its leading position in the UK through its
quality product offering, stock availability and customer
service.
UK revenue grew by 35.8% on prior year and 41.7% on 2020 on a
like for like basis, with a particularly strong performance in the
trade sector where revenue grew by 56.3% against prior year and
65.8% against 2020 on a like for like basis. This was driven by
growth across a number of existing customers in addition to a
number of new contracts including Sanctuary Housing and St Modwen
Homes. The retail sector revenue increased by 21.3% against prior
year and 25.2% against 2020 on a like for like basis representing
an increased share of showroom spend. Exports increased by 26.0% in
the year and 26.0% against 2020 on a like for like basis reflecting
growth in Ireland and France.
New product development remains a core component of Merlyn's
growth strategy with the launches of Arysto luxury shower
enclosures and slip resistant trays during the year. The future
pipeline includes an Arysto range extension, a next generation of
shower trays, further storage options and products with improved
glass cleaning properties. Our focus on our customers was reflected
in Merlyn winning the Fortis Overall Supplier of the Year and the
Wetroom Supplier of the Year and the Neville Lumb Overall Supplier
of the Year and also attaining the Gold Standard in Excellence
through People.
Merlyn has continued to progress its environmental credentials
during the year and has launched an eco-packaging solution
developed last year to eliminate the use of single-use plastics
with fully recyclable alternatives. All new product launches will
incorporate eco-packaging.
Notwithstanding substantial increases in input and sea freight
costs, Merlyn recorded a strong underlying operating profit
performance. Cash conversion remained strong in the period.
Vado
Vado, our leading manufacturer of taps, mixer showers, bathroom
accessories and valves, recorded revenue of GBP43.9m for the year
(2021: GBP38.2m), 14.9% higher than the prior year and 5.8% higher
than 2020 on a like for like basis.
In the UK, our retail sector revenue showed strong growth, up on
prior year by 23.8% and 12.0% up on 2020 on a like for like basis
on the back of a vibrant new product development programme and
excellent stock availability.
The trade sector was more challenging, with revenue up 6.3% on
prior year but 4.5% lower than 2020 on a like for like basis. This
was in part driven by the lack of availability of building
materials and labour which resulted in slower than planned build
programmes at key customers.
Export revenue was 16.5% ahead of both prior year and 2020 on a
like for like basis on the back of strong growth in Europe and the
Middle East.
The business continued to invest in NPD with further market
leading launches planned to follow the successful launches of the
Knurled X Fusion and Omika Noir ranges this year. Our NPD programme
has a strong environmental and sustainability focus, with the
launch of our EcoTurn range of cold start taps last year
reinforcing Vado's position as an on-trend and sustainable
brand.
Vado generated an underlying operating profit ahead of last year
and a strong level of cash conversion in the period.
Croydex
Croydex, our market leading, innovative designer, manufacturer,
and distributor of high-quality bathroom furnishings and
accessories, recorded revenue of GBP27.0m (2021: GBP24.1m) for the
period, 12.0% higher than the prior year and 15.9% higher than 2020
on a like for like basis.
Retail sector revenue was marginally ahead of prior year and
14.0% up on 2020 on a like for like basis. Retail and E-Commerce
sales slowed in the second half of the year as customers returned
to physical stores and activity returned to more normal levels. The
business continues to develop its digital strategy and has secured
further listings with Home Depot.com, Lowes, Walmart and Amazon,
providing a sound base for both our export and online growth
plans.
Trade sector revenue was up 28.4% on the prior year and up 16.9%
against 2020 on a like for like basis, with the toilet seat
category including Croydex's patented fixing system performing
especially well.
Export sales were in line with prior year and 18.2% up on 2020
on a like for like basis, mainly driven by new business in Italy,
offset by a slowdown in Germany.
Croydex's ongoing new product development programme has played a
major role in driving new sales opportunities, particularly through
new patented solutions within the shower rod, toilet seat and
medicine cabinet categories. Hygiene-focused products with
anti-bacterial and anti-viral surfaces and non-touch taps were also
introduced. The packaging policy was developed further in the year
to reduce the environmental impact and Eco-design was integrated
into all products. Croydex has worked with the FSC on timber
certification and BEIS, DEFRA, BMA and UWL regarding the proposed
water efficiency labelling scheme.
Underlying operating profit was ahead of the prior year albeit
cash conversion was significantly lower than prior year reflecting
investment into inventory to support stock availability and
service.
Abode
Abode, our leading designer and distributor of high quality hot
water taps, bathroom mixers, kitchen sinks and taps, recorded
revenue of GBP18.9m for the year (2021: GBP15.0m), a 26.0% increase
on prior year and a 30.3% increase against 2020 on a like for like
basis.
The business continued to benefit from its strong market
positions with key customers, a well planned and executed NPD
programme and timely investment in additional inventory. The
business has grown market share over the period and remains focused
on developing sustainable products that provide customers with
'water the way you want it'.
Retail growth has been supported by an 'Approved Retailer'
scheme and investment in point-of-sale display aids to drive market
share growth in our premium Distinctly Abode ranges. Growth in the
specification sector has benefited from the Pronteau and ProTrad
hot water taps with further initiatives planned in the year ahead.
Both taps have been awarded WRAS approval, a pre-requisite for new
build markets.
Our focus on our products and customers will see further market
leading product launches in the year ahead that will further
benefit the growth of the business.
Underlying operating profit was higher than prior year with cash
conversion lower than prior year reflecting the investment into
inventory.
Johnson Tiles
Johnson Tiles, our UK market leading ceramic tile manufacturer
and a market leader in the supply of both own manufactured and
imported tiles, recorded revenue of GBP34.2m (2021: GBP32.8m), 4.3%
higher than the prior year but 16.4% lower than 2020 on a like for
like basis. We have accelerated the process of repositioning
Johnson Tiles and specifically exited a number of lower margin
products as part of this plan resulting in a more focused
business.
Trade sector revenue was up 17.6% on the prior year but 5.7%
down on 2020 on a like for like basis, with the second half
recording a 2.0% decrease on 2020 on a like for like basis. The
house developer sector continued its strong performance during the
year but commercial specifications, which are driven by the
hospitality and retail sectors, continued to operate significantly
below pre-COVID levels. The social housing refurbishment market
continues to be impacted by the overhang from the Grenfell cladding
issue. Johnson Tiles' strong relationships with the national house
developers continued, including Barratt, David Wilson, Persimmon,
Charles Church, Redrow and Countryside.
Retail sector revenue was down 9.9% on prior year and 28.9% down
on 2020 on a like for like basis driven primarily by the planned
exit of lower margin product categories. This has freed up
resources for our growing focus on small format niche product
ranges.
In 2021 Johnson Tiles celebrated both its 120th year as a UK
manufacturer of tiles and its heritage as a designer and innovator
in tiles, with the business winning a Product of the Year award for
the South Bank range at the Mix Interiors 2022 Mixology Awards.
Export revenue was 11.1% below prior year and 22.6% below 2020
on a like for like basis due mainly to lower revenues to
France.
Johnson Tiles has developed a market leading position on
sustainability over many years focusing strongly on recycling
energy, water and waste and will pursue further initiatives to
progress the reduction in our carbon footprint in the year
ahead.
In the past year, while the business made encouraging progress,
the performance was impacted by the significant increase in input
costs and in particular energy. These cost increases have now been
passed through to our customers by a series of phased selling price
increases, albeit with some lag effect. The underlying operating
loss was lower than the previous year and the level of cash
generation reflected an investment into inventory.
Norcros Adhesives
Norcros Adhesives, our UK manufacturer and supplier of tile and
stone adhesives and ancillary products recorded revenue of GBP14.3m
(2021: GBP12.3m), 16.3% higher than prior year and 23.3% higher
than 2020 on a like for like basis.
Retail sector revenue was 70.5% ahead of prior year and 73.3%
above 2020 on a like for like basis, reflecting significant growth
of our product lines into some of our larger customers combined
with a displacement of competitor products.
Trade sector revenue was 29.1% below prior year and 4.9% below
2020 on a like for like basis reflecting a slower recovery in the
larger private and public commercial specification projects and an
increased focus on the retail sector.
The Middle Eastern operations were closed at the end of the
previous financial year, and as a result, there were no revenues in
the year.
Norcros Adhesives maintained the 'Gold Standard' from the Supply
Chain Sustainability School and the business remains committed to
making further progress, especially in the areas of packaging and
recycling.
Raw material and transport costs both increased significantly in
the year and impacted margins as the recovery through selling price
increases lagged the increase in operating costs. Norcros Adhesives
made a small underlying operating loss in line with the prior
year.
Business review - South Africa
Revenue for the year increased by 28.8% on prior year on a
constant currency basis and increased by 34.2% on a Sterling
reported basis to GBP139.6m (2021: GBP104.0m).
The prior year's performance was materially impacted by the
COVID-19 related nationwide lockdown, which saw revenue decline
sharply caused by the temporary suspension of manufacturing and
closure of retail operations in the first quarter. Market activity
returned in the year with Tile Africa, Johnson Tiles and TAL
continuing to benefit from the higher demand and market share gains
in the retail renovation market. House of Plumbing revenues
benefited from the opening of new branches but were held back by
the lack of large-scale commercial building activity.
The business continued to prioritise staff wellness during the
year and proactively supported all employees with full access to
our Wellness Centre that extended to all aspects of wellbeing,
including independent psychological support. The third and fourth
COVID-19 waves were safely navigated by focusing on the
well-practised protocols and continuing to shield our vulnerable
staff. Staff are encouraged but not forced to vaccinate against
COVID-19 and the business has provided four internal free
vaccination drives in addition to the private sector and government
offerings. During the year, 828 employees undertook a COVID-19
test, many at the onsite Wellness Centre at Olifantsfontein, with
259 positive cases reported. There were no cases of work
transmission and thankfully, only a small number of employees
required hospitalisation in the year.
Underlying operating profit for the year was at a record level
at GBP10.9m (2021: GBP6.9m) and a substantial increase over 2021,
reflecting the strong retail demand for our products and a GBP0.2m
translation exchange gain from a stronger Rand. Cash generation was
good, reflecting investment in capital expenditure and the planned
increase in our stock holding mitigating the supply chain
challenges and delays in imported raw material and finished goods.
The business finished the year in a very strong financial and
competitive position, well placed to continue to gain market share
and grow in its respective markets.
Johnson Tiles South Africa
Johnson Tiles South Africa, our tile manufacturing business,
recorded revenue of GBP16.5m (2021: GBP12.5m), a 32.0% increase on
a reported basis and 26.9% higher on a constant currency basis.
Revenue was 27.9% higher than 2020 on a constant currency like for
like basis.
Record levels of manufacturing output were achieved during the
year as productivity and efficiency initiatives were successfully
delivered. Together with targeted plant investments during the
period, this focus helped to drive improved throughput and product
quality, enabling the business to meet the increased demand from
housing renovations, commercial housebuilders and in the latter
part of the year from the recovering commercial sector,
particularly the corporate renovation segment. A lack of big build
construction activity remains.
Products were specified and installed in leading developments
across the country, in quality, entry-level residential
developments such as Thaba Village, The Reeds and Greenpark in
Johannesburg, The Blyde and Greencreek in Pretoria, The Huntsman,
Fynbos and Greenbay in Cape Town and Ballito Hills in Durban.
During the year, the manufactured tile range was consolidated,
reducing the complexity of the portfolio to further improve
in-stock and customer service levels whilst increasing the depth of
some ranges.
Underlying operating profit was ahead of the prior year.
Tile Africa
Tile Africa, our leading retailer of wall and floor tiles,
sanitaryware and bathroom fittings, recorded revenue of GBP75.5m
(2021: GBP54.9m), a 37.5% increase on a reported basis and 32.0%
higher on a constant currency basis. Revenue was 45.5% higher than
2020 on a constant currency like for like basis.
The substantial growth on prior year was driven by buoyant
retail demand from increased renovation activity, significantly
improved operating disciplines, and superior stock
availability.
The successful, exclusive Evox range of bathroomware and
sanitaryware was expanded with several new bath and tap ranges, and
an exclusive upmarket range, Nuvo, was launched in the second half
of the year. An appealing range of bathroom furniture was also
added.
The commercial contracts sector however remains subdued with
lower overall new build activity. Despite this, several retail
floor covering installations for Pick n Pay, Boxer and Spar were
completed.
Tile Africa currently operates from thirty-three owned stores
and two franchise stores. The temporary Wynberg pop-up clearance
store was closed during the year, and a new store opened in
Thohoyandou. The dual Tile Africa HOMEXPRESS value-for-money brand
is being trialled in this store.
Ongoing capital investment continues, mirroring the successful
flagship Greenstone store and Ballito store concepts, incorporating
a bathroom store-within-a-store format and a bespoke alternative
floorcoverings offer.
Tile Africa's underlying operating profit was significantly
ahead of prior year, with strong cashflow partially offset by the
investment into inventory. This investment enabled the business to
both support the revenue growth and ensure our customer service and
stock availability was maintained notwithstanding the supply chain
challenges and extended import lead times.
TAL
TAL, our market leading adhesives business, recorded revenue of
GBP22.5m (2021: GBP19.1m), a 17.8% increase on a reported basis and
a 13.1% increase on a constant currency. Revenue was 11.4% higher
than 2020 on a constant currency like for like basis.
Large commercial new build projects remained limited, which
impacted demand for the business's high specification rapid setting
adhesives and system-driven construction products. Export retail
demand remained solid despite competitors re-opening plants in
neighbouring countries.
Notwithstanding market conditions, TAL remains the leading
supplier, with the business supplying market-leading products and
technical expertise to several construction projects during the
year, including The Blyde Residential Development, Babylonstoren
Spa, Ford Motor Company's new manufacturing facility, Dr Pixley
Kaseme Hospital, The Hilton Hotel, Hilton Towers and The Arch.
Investment in new product development continued during the
period with the launch of products in the waterproofing category as
well as barrier and keying compounds. Ongoing development of novel
fixing systems for coverings outside our traditional tile market
continues.
TAL's underlying operating profit and cash generation were ahead
of the prior year.
House of Plumbing
House of Plumbing, our market leading supplier of specialist
plumbing materials into the specification and commercial segments,
recorded full year revenue of GBP25.1m (2021: GBP17.5m), 43.4%
higher than the prior year on a reported basis and 37.2% higher on
a constant currency basis. Revenue was 15.1% higher than 2020 on a
constant currency like for like basis.
The large commercial projects traditionally supplied by House of
Plumbing are yet to recover post-COVID-19. However, additions to
the branch network contributed to increased revenues compared to
the prior year. During the period, four new branches were added, in
Nelspruit, Secunda, City Deep and Durban South, focused on the
civils product ranges used in infrastructure, mining, engineering,
and irrigation projects in addition to the traditional commercial
plumbing offering.
House of Plumbing now operates eight branches. The focus is on
providing expert technical advice and consistent stock availability
with the business planning to continue to extend its geographical
expansion and further establish a national footprint.
During the year, House of Plumbing supplied several landmark
projects, including Redhill School, Ford Silverton, Coca Cola
Midrand, SAB Alrode, Rand Airport, N2 Woodhill shopping mall and
Netcare Hospital Alberton.
House of Plumbing's underlying operating profit was marginally
higher than prior year, with cashflow reflecting the investment
into inventory and new branches.
Financial overview
2022 2021
GBPm GBPm
-------------------------------- ----- -----
Revenue 396.3 324.2
-------------------------------- ----- -----
Underlying operating profit 41.8 33.8
IAS 19R administrative expenses (1.7) (1.4)
Acquisition related costs (4.8) (3.7)
Exceptional operating items 0.9 (3.8)
-------------------------------- ----- -----
Operating profit 36.2 24.9
Net finance costs (3.2) (6.4)
-------------------------------- ----- -----
Profit before taxation 33.0 18.5
Taxation (7.3) (3.5)
-------------------------------- ----- -----
Profit for the year 25.7 15.0
-------------------------------- ----- -----
Revenue
Group revenue at GBP396.3m (2021: GBP324.2m) increased by 22.2%
on a reported basis and by 20.6% on a constant currency basis.
Group revenue was 20.9% higher than 2020 on a constant currency
like for like basis, after adjusting the 2020 comparator period
from a 53 to a 52 week period pro-rating.
Underlying operating profit
Underlying operating profit increased by 23.7% to GBP41.8m
(2021: GBP33.8m). Our UK businesses recorded an underlying
operating profit of GBP30.9m (2021: GBP26.9m), and our South
African businesses an underlying operating profit of GBP10.9m
(2021: GBP6.9m). Group underlying operating profit margin was 10.5%
(2021: 10.4%).
IAS 19R administrative costs
These costs represent the costs incurred by the Trustee of
administering the UK defined benefit pension scheme and are
reflected in the Income Statement under IAS 19R. Costs of GBP1.7m
are higher than prior year largely as a result of the fees relating
to the triennial actuarial valuation (2021: GBP1.4m).
Acquisition related costs
A cost of GBP4.8m (2021: GBP3.7m) has been recognised in the
year and is analysed as follows:
2022 2021
GBPm GBPm
------------------------------ ----- -----
Intangible asset amortisation 3.7 3.7
Advisory fees 1.1 -
------------------------------ ----- -----
4.8 3.7
------------------------------ ----- -----
The advisory fees relate to the costs incurred in relation to
acquisition activity.
Exceptional operating items
A net exceptional operating credit of GBP0.9m (2021: charge of
GBP3.8m) has been recognised in the year.
2022 2021
GBPm GBPm
--------------------------------- ----- -----
Release of UK property provision (0.9) -
COVID-19 related restructuring - 3.8
--------------------------------- ----- -----
(0.9) 3.8
--------------------------------- ----- -----
The UK property provision related to the only remaining surplus
and legacy onerous property lease at Groundwell, Swindon. In the
year, the Group reached agreement with the landlord to exit the
lease early. A cash settlement payment of GBP1.3m including
dilapidation obligations was made in the period. The remaining
GBP0.9m of the related provision has been released as an
exceptional operating item.
During the prior year an exceptional charge of GBP3.8m was
incurred in relation to restructuring programmes implemented by the
Group as a result of COVID-19.
Finance costs
2022 2021
GBPm GBPm
----------------------------------------------------------- ----- -----
Interest payable on bank borrowings 0.8 1.5
Interest on lease liabilities 1.7 1.7
Movement on fair value of derivative financial instruments - 2.0
Discounting of property lease provisions 0.1 -
Amortisation of costs of raising debt finance 0.2 0.2
----------------------------------------------------------- ----- -----
Finance costs 2.8 5.4
----------------------------------------------------------- ----- -----
IAS 19R finance cost 0.4 1.0
----------------------------------------------------------- ----- -----
Total finance costs 3.2 6.4
----------------------------------------------------------- ----- -----
Net finance costs for the year of GBP3.2m compares to GBP6.4m in
2021. This decrease is mainly due to the movement in the fair value
of foreign exchange contracts which was a GBP2.0m cost in the prior
year in relation to expired forward foreign exchange contracts.
Forward foreign exchange contracts are now accounted for under IFRS
9 hedge accounting, with the movement in fair value recognised in
the Consolidated Statement of Comprehensive Income.
The Group has recognised a GBP0.4m interest cost in respect of
the UK defined benefit pension scheme liability (2021: GBP1.0m)
which decreased by GBP0.6m principally reflecting the lower deficit
throughout the year.
Underlying profit before tax
Underlying profit before tax was GBP39.3m (2021: GBP30.6m),
mainly reflecting the increase in underlying operating profit noted
above.
Taxation
The tax charge for the year of GBP7.3m (2021: GBP3.5m)
represents an effective tax rate for the year of 22.1% (2021:
18.9%). The increase in the effective tax rate mainly relates to a
higher proportion of the Group's taxable profits being generated in
South Africa and the non-deductible acquisition related costs in
2022.
The standard rates of corporation tax in the UK, South Africa
and Ireland in the period were 19% (2021: 19%), 28% (2021: 28%) and
12.5% (2021: 12.5%) respectively.
Dividends
The Group responded swiftly to the impact of the COVID-19
pandemic and the need to preserve cash by not paying a final
dividend in relation to the year ended 31 March 2020 or an interim
dividend in relation to the year ended 31 March 2021. The Group's
dividend policy, which takes into account the Group's growth
strategy, the interests of other key stakeholders, the Group's
cash-generative characteristics and its earnings growth, was
reinstated in the second half of the prior year. The Board
recommends a final dividend of 6.9p per share (2021: 8.2p). This,
combined with the interim dividend of 3.1p per share (2021: nil)
results in a total dividend of 10.0p per share (2021: 8.2p). The
total dividend is equivalent to a dividend cover of 3.8 times,
consistent with the year ended 31 March 2021. The cash cost of the
total dividend is GBP8.7m.
This final dividend, if approved at the Annual General Meeting,
will be payable on 29 July 2022 to shareholders on the register on
24 June 2022. The shares will be quoted ex-dividend on 23 June
2022. Norcros plc operates a Dividend Reinvestment Plan (DRIP). If
a shareholder wishes to use the DRIP the latest date to elect for
this in respect of this final dividend is 8 July 2022.
Balance sheet
The Group's balance sheet is summarised below.
2022 2021
GBPm GBPm
------------------------------------------------- ------ ------
Property, plant and equipment 29.0 28.0
Right of use assets 19.9 19.6
Goodwill and intangible assets 90.3 93.6
Deferred tax (9.4) (0.5)
Net current assets excluding cash and borrowings 68.2 44.0
Pension scheme surplus/(liability) 19.6 (18.3)
Lease liabilities (24.0) (24.2)
Other non-current assets and liabilities (1.9) (4.3)
Net cash 8.6 10.5
------------------------------------------------- ------ ------
Net assets 200.3 148.4
------------------------------------------------- ------ ------
Total net assets increased by GBP51.9m to GBP200.3m (2021:
GBP148.4m). Net current assets increased by GBP24.2m reflecting the
significant cash investment into working capital, particularly
inventory.
Property, plant and equipment increased by GBP1.0m to GBP29.0m
and included additions of GBP5.3m (2021: GBP2.5m). The depreciation
charge was GBP5.1m (2021: GBP5.2m) and foreign exchange gains were
GBP0.8m (2021: gain of GBP1.7m).
Right of use assets increased by GBP0.3m to GBP19.9m (2021:
GBP19.6m), reflecting the small difference between additions or
renewals and right of use asset depreciation in the year. Lease
liabilities of GBP24.0m (2021: GBP24.2m) decreased by GBP0.2m.
The deferred tax liability increased by GBP8.9m to a liability
of GBP9.4m (2021: liability of GBP0.5m). The increase is mainly the
result of a movement in the pension scheme position from a deficit
at 31 March 2021 to a surplus at 31 March 2022.
Pension schemes
On an IAS 19R accounting basis, the gross defined benefit
pension scheme valuation of the UK scheme showed a surplus of
GBP19.6m compared to a deficit of GBP18.3m last year. The present
value of scheme liabilities decreased by GBP47.8m primarily due to
an increase in the discount rate to 2.75% (31 March 2021: 2.05%)
and benefit payments made in the period. The value of scheme assets
decreased by GBP9.9m largely due to benefit payments made in the
period partially offset by asset returns.
During the year, the Group reached agreement 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 GBP35.8m (2018: GBP49.3m). Deficit repair
contributions have been agreed at GBP3.8m per annum from 1 April
2022 to March 2027 (increasing with CPI, capped at 5%, each
year).
The Group's contributions to its defined contribution pension
schemes were GBP3.7m (2021: GBP3.0m).
Cash flow and net debt
Underlying operating cash flow was GBP37.2m lower than in the
prior year at GBP28.6m (2021: GBP65.8m).
2022 2021
GBPm GBPm
------------------------------------ ------ -----
Underlying operating profit 41.8 33.8
Depreciation and amortisation 5.2 5.4
Net working capital movement (23.6) 21.8
IFRS 2 charge add-back 1.1 1.0
Depreciation of right of use assets 4.1 4.0
Cash settlement of share options - (0.2)
------------------------------------ ------ -----
Underlying operating cash flow 28.6 65.8
------------------------------------ ------ -----
The main driver of the reduction in the underlying operating
cash flow was a significant cash investment into working capital,
particularly inventory, to optimise our service and stock
availability proposition in the light of exceptional supply chain
challenges. Underlying operating cash conversion in the year was
63% of underlying EBITDA (2021: 174%).
2022 2021
GBPm GBPm
---------------------------------------------------------- ----- ------
Underlying operating cash flow 28.6 65.8
Cash flows from exceptional items and acquisition related
costs (1.7) (2.5)
Pension fund deficit recovery contributions (3.3) (3.3)
---------------------------------------------------------- ----- ------
Cash flow generated from operations 23.6 60.0
Net interest paid (2.5) (3.2)
Taxation (6.5) (3.5)
---------------------------------------------------------- ----- ------
Net cash generated from operating activities 14.6 53.3
Capital expenditure (5.4) (2.8)
Dividends (9.1) -
Share transactions 0.1 0.3
Principal element of lease payments (4.7) (4.3)
Exchange movement 1.6 0.6
Movement in costs of raising finance 1.0 (0.2)
---------------------------------------------------------- ----- ------
Net cash (spent)/generated (1.9) 46.9
Opening net cash/(debt) 10.5 (36.4)
---------------------------------------------------------- ----- ------
Closing net cash 8.6 10.5
---------------------------------------------------------- ----- ------
Cash generated from operating activities was GBP38.7m lower than
the prior year at GBP14.6m, largely due to the GBP37.2m reduction
in underlying operating cash flows.
Cash flows from exceptional items and acquisition related costs
in the current year primarily relate to the settlement of the
surplus legacy lease at Groundwell of GBP1.3m.
Capital expenditure at GBP5.4m (2021: GBP2.8m) represents an
increase against COVID-19 levels and includes investment in new
product programmes, new stores and upgrades, IT systems and
manufacturing facilities.
The Group ended the year with net cash of GBP8.6m (2021: net
cash of GBP10.5m) on a pre-IFRS 16 basis after a net cash outflow
of GBP1.9m. Net debt inclusive of IFRS 16 lease liabilities was
GBP15.4m (2021: GBP13.7m).
Funding and liquidity
The Group agreed a new multicurrency revolving credit facility
with four lenders in the second half of the year. The Group now has
committed banking facilities of GBP130m (plus a GBP70m uncommitted
accordion) with a maturity date of the facility of October 2025
with two further years as extension options.
Principal Risks and Uncertainties
Risk management remains a priority for the Group to help sustain
the success of the business in the future. There is a range of
potential risks and uncertainties which could have a material
impact on the Group's performance. The objective of our risk
management framework is to support the business in meeting its
strategic and operational objectives through the identification,
monitoring and mitigation of risks within clearly defined risk
appetite levels for each risk category.
The Board has carried out a robust assessment of the principal
risks and taken them into consideration when assessing the
long-term viability of the Company. The principal risks are listed
below and they do not comprise all the risks that the Group may
face, and are not listed in any order of priority.
-- Strategic risks, include the risks associated with the
Coronavirus (COVID-19) pandemic, future acquisitions, and the
Environmental, Social and Governance (ESG) agenda.
-- People risks, include the risks associated with staff retention and recruitment.
-- Commercial risks, include risks associated with market
conditions, the loss of key customers and competition.
-- Operational risks include the risks associated with the
reliance on production facilities, the loss of a key supplier and
cyber security.
-- Financial risks, include the risks associated with
maintaining a suitable level of funding and liquidity and those
associated with managing the defined benefit pension scheme.
Further details on the principal risks including detailed
descriptions and mitigating actions are presented in the Annual
Report and Accounts.
Responsibility Statement
Each of the directors, whose names and functions are listed
below, confirms that, to the best of their knowledge:
-- The consolidated financial statements, prepared in accordance
with the applicable United Kingdom law and in conformity with
UK-adopted international accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Group and the undertakings included in the
consolidation taken as a whole; and
-- The business review includes a fair review of the development
and performance of the business and the position of the Group and
the undertakings included in the consolidation taken as a whole;
and
-- There have been no significant individual related party transactions during the year.
Directors: Gary Kennedy (Chair), Nick Kelsall (Chief Executive
Officer), James Eyre (Chief Financial Officer), David McKeith
(Non-Executive Director) and Alison Littley (Non-Executive
Director).
Nick Kelsall
Chief Executive Officer
James Eyre
Chief Financial Officer
Consolidated income statement
Year ended 31 March 2022
2022 2021
Notes GBPm GBPm
----------------------------------------------------- ----- ----- -----
Continuing operations
Revenue 2 396.3 324.2
----------------------------------------------------- ----- ----- -----
Underlying operating profit 41.8 33.8
IAS 19R administrative expenses (1.7) (1.4)
Acquisition related costs 3 (4.8) (3.7)
Exceptional operating items 3 0.9 (3.8)
----------------------------------------------------- ----- ----- -----
Operating profit 36.2 24.9
Finance costs 4 (2.8) (5.4)
IAS 19R finance cost (0.4) (1.0)
----------------------------------------------------- ----- ----- -----
Profit before taxation 33.0 18.5
Taxation (7.3) (3.5)
----------------------------------------------------- ----- ----- -----
Profit for the year to equity holders of the
Company 25.7 15.0
----------------------------------------------------- ----- ----- -----
Earnings per share attributable to equity holders
of the Company
Basic earnings per share:
From profit for the year 6 31.8p 18.6p
----------------------------------------------------- ----- ----- -----
Diluted earnings per share:
From profit for the year 6 31.2p 18.6p
----------------------------------------------------- ----- ----- -----
Weighted average number of shares for basic earnings
per share (millions) 80.9 80.6
Alternative performance measures
----------------------------------------------------- ----- ----- -----
Underlying profit before taxation (GBPm) 5 39.3 30.6
Underlying earnings (GBPm) 5 31.5 25.1
Basic underlying earnings per share 6 38.9p 31.2p
Diluted underlying earnings per share 6 38.2p 31.1p
----------------------------------------------------- ----- ----- -----
Consolidated statement of comprehensive income
Year ended 31 March 2022
2022 2021
GBPm GBPm
----------------------------------------------------- ----- -----
Profit for the year 25.7 15.0
------------------------------------------------------ ----- -----
Other comprehensive income and expense:
Items that will not subsequently be reclassified
to the Income Statement
Actuarial gains on retirement benefit obligations 27.5 24.1
Items that may be subsequently reclassified to the
Income Statement
Cash flow hedges - fair value gain/(loss) in year 3.0 (1.5)
Foreign currency translation of foreign operations 3.6 5.3
------------------------------------------------------ ----- -----
Other comprehensive income for the year 34.1 27.9
------------------------------------------------------ ----- -----
Total comprehensive income for the year attributable
to equity holders of the Company 59.8 42.9
------------------------------------------------------ ----- -----
Items in the statement are disclosed net of tax.
Consolidated balance sheet
At 31 March 2022
2022 2021
GBPm GBPm
-------------------------------------- ------- -------
Non-current assets
Goodwill 61.2 60.8
Intangible assets 29.1 32.8
Property, plant and equipment 29.0 28.0
Pension scheme asset 19.6 -
Right of use assets 19.9 19.6
--------------------------------------- ------- -------
158.8 141.2
-------------------------------------- ------- -------
Current assets
Inventories 100.6 78.1
Trade and other receivables 71.1 64.6
Derivative financial instruments 1.6 -
Cash and cash equivalents 27.4 28.3
--------------------------------------- ------- -------
200.7 171.0
-------------------------------------- ------- -------
Current liabilities
Trade and other payables (102.4) (95.4)
Lease liabilities (5.7) (5.4)
Current tax liabilities (2.7) (1.0)
Derivative financial instruments - (2.3)
--------------------------------------- ------- -------
(110.8) (104.1)
-------------------------------------- ------- -------
Net current assets 89.9 66.9
--------------------------------------- ------- -------
Total assets less current liabilities 248.7 208.1
--------------------------------------- ------- -------
Non-current liabilities
Financial liabilities - borrowings (18.8) (17.8)
Pension scheme liability - (18.3)
Lease liabilities (18.3) (18.8)
Deferred tax liabilities (9.4) (0.5)
Other non-current liabilities (0.3) (0.3)
Provisions (1.6) (4.0)
--------------------------------------- ------- -------
(48.4) (59.7)
-------------------------------------- ------- -------
Net assets 200.3 148.4
--------------------------------------- ------- -------
Financed by:
Share capital 8.1 8.1
Share premium 30.3 30.2
Retained earnings and other reserves 161.9 110.1
--------------------------------------- ------- -------
Total equity 200.3 148.4
--------------------------------------- ------- -------
Consolidated cash flow statement
Year ended 31 March 2022
2022 2021
Note GBPm GBPm
----------------------------------------------- ---- ------ ------
Cash generated from operations 7 23.6 60.0
Income taxes paid (6.5) (3.5)
Interest paid (2.5) (3.2)
----------------------------------------------- ---- ------ ------
Net cash generated from operating activities 14.6 53.3
----------------------------------------------- ---- ------ ------
Cash flows from investing activities
Purchase of property, plant and equipment and
intangible assets (5.4) (2.8)
----------------------------------------------- ---- ------ ------
Net cash used in investing activities (5.4) (2.8)
----------------------------------------------- ---- ------ ------
Cash flows from financing activities
Proceeds from issue of ordinary share capital 0.1 0.3
Principal element of lease payments (4.7) (4.3)
Drawdown of borrowings 25.0 -
Repayment of borrowings (23.0) (66.0)
Dividends paid to the Company's shareholders (9.1) -
----------------------------------------------- ---- ------ ------
Net cash used in financing activities (11.7) (70.0)
----------------------------------------------- ---- ------ ------
Net decrease in cash at bank and in hand and
bank overdrafts (2.5) (19.5)
Cash at bank and in hand and bank overdrafts
at the beginning of the year 28.3 47.2
Exchange movements on cash and bank overdrafts 1.6 0.6
----------------------------------------------- ---- ------ ------
Cash at bank and in hand and bank overdrafts
at the end of the year 27.4 28.3
----------------------------------------------- ---- ------ ------
Consolidated statement of changes in equity
Year ended 31 March 2022
Ordinary
share Share Treasury Hedging Translation Retained Total
capital premium reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------- -------- -------- -------- -------- ----------- --------- -------
At 1 April 2020 8.1 29.9 (0.4) - (21.7) 88.5 104.4
Comprehensive income:
Profit for the year - - - - - 15.0 15.0
Other comprehensive
(expense)/income:
Actuarial gain on
retirement benefit
obligations - - - - - 24.1 24.1
Fair value loss on
cash flow hedges - - - (1.5) - - (1.5)
Foreign currency
translation adjustments - - - - 5.3 - 5.3
-------------------------- -------- -------- -------- -------- ----------- --------- -------
Total other comprehensive
(expense)/income
for the year - - - (1.5) 5.3 24.1 27.9
Transactions with
owners:
Shares issued - 0.3 - - - - 0.3
Dividends paid - - - - - - -
Settlement of share
option schemes - - 0.3 - - (0.5) (0.2)
Value of employee
services - - - - - 1.0 1.0
-------------------------- -------- -------- -------- -------- ----------- --------- -------
At 31 March 2021 8.1 30.2 (0.1) (1.5) (16.4) 128.1 148.4
Comprehensive income:
Profit for the year - - - - - 25.7 25.7
Other comprehensive
income:
Actuarial gain on
retirement benefit
obligations - - - - - 27.5 27.5
Fair value gain on
cash flow hedges - - - 3.0 - - 3.0
Foreign currency
translation adjustments - - - - 3.6 - 3.6
-------------------------- -------- -------- -------- -------- ----------- --------- -------
Total other comprehensive
income for the year - - - 3.0 3.6 27.5 34.1
Transactions with
owners:
Shares issued - 0.1 - - - - 0.1
Dividends paid - - - - - (9.1) (9.1)
Value of employee
services - - - - - 1.1 1.1
-------------------------- -------- -------- -------- -------- ----------- --------- -------
At 31 March 2022 8.1 30.3 (0.1) 1.5 (12.8) 173.3 200.3
-------------------------- -------- -------- -------- -------- ----------- --------- -------
Notes to the preliminary statement
Year ended 31 March 2022
1. Basis of preparation
The principal activities of Norcros plc ("the Company") and its
subsidiaries (together "the Group") are the design, manufacture and
distribution of a range of high quality and innovative bathroom and
kitchen products mainly in the UK and South Africa. The Company is
a public limited company which is listed on the premium segment of
the London Stock Exchange market of listed securities and is
incorporated and domiciled in the UK. The address of its registered
office is Ladyfield House, Station Road, Wilmslow, SK9 1BU.
The financial information presented in this preliminary
statement is extracted from, and is consistent with, the Group's
audited financial statements for the year ended 31 March 2022. The
financial information set out above does not constitute the
Company's statutory financial statements for the periods ended 31
March 2022 or 31 March 2021 but is derived from those financial
statements. Statutory financial statements for 2022 will be
delivered following the Company's annual general meeting. The
auditors have reported on those financial statements; their report
was unqualified and did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
The Group's results have been prepared in accordance UK-adopted
International Accounting Standards.
Going concern
In adopting the going concern basis for preparing the financial
statements, the Directors have considered the Group's business
activities and the principal risks and uncertainties including
current macroeconomic factors in the context of the current
operating environment. The Group, in acknowledging its TCFD
requirements, has also considered climate risks in the financial
statements.
A going concern financial assessment was developed on a
bottom-up basis by taking the output of the annual budgeting
process built up by individual businesses and then subjected to
review and challenge by the Board. The acquisition of Grant
Westfield was also reflected in the assessment. The financial model
was then stress tested by modelling the most extreme but plausible
scenario, that being further national lockdowns as a result of a
resurgent COVID-19 pandemic. This has been based on the actual
impact of the COVID-19 pandemic on the Group, which at its peak saw
a revenue reduction of 25% on the prior year over a 6 month period.
The scenario also incorporates management actions the Group has at
its disposal including a number of cash conservation and cost
reduction measures including capital expenditure reductions,
dividend decreases and restructuring activities.
The Group continues to exhibit sufficient and prudent levels of
liquidity headroom against our key banking financial covenants
during the 12-month period under assessment. Reverse stress testing
has also been applied to the financial model, which represents a
further decline in sales compared with the reasonable worst case.
Such a scenario, and the sequence of events which could lead to it,
is considered to be implausible and remote.
As a result of this detailed assessment, the Board has concluded
that the Company is able to meet its obligations when they fall due
for a period of at least 12 months from the date of this report.
For this reason, the Company continues to adopt the going concern
basis for preparing the Group financial statements. In forming this
view, the Board has also concluded that no material uncertainty
exists in its use of the going concern basis of preparation.
2. Segmental reporting
Year ended 31 March 2022
South
UK Africa Group
GBPm GBPm GBPm
------------------------------------------- ------- ------- -------
Revenue 256.7 139.6 396.3
------------------------------------------- ------- ------- -------
Underlying operating profit 30.9 10.9 41.8
IAS 19R administrative expenses (1.7) - (1.7)
Acquisition related costs (4.6) (0.2) (4.8)
Exceptional operating items 0.9 - 0.9
------------------------------------------- ------- ------- -------
Operating profit 25.5 10.7 36.2
------------------------------------------- ------- ------- -------
Finance costs (3.2)
------------------------------------------- ------- ------- -------
Profit before taxation 33.0
Taxation (7.3)
------------------------------------------- ------- ------- -------
Profit for the year 25.7
------------------------------------------- ------- ------- -------
Net cash 8.6
------------------------------------------- ------- ------- -------
Segmental assets 252.9 106.6 359.5
Segmental liabilities (116.9) (42.3) (159.2)
Additions to property, plant and equipment 2.9 2.4 5.3
Depreciation and amortisation 8.0 5.0 13.0
------------------------------------------- ------- ------- -------
Year ended 31 March 2021
South
UK Africa Group
GBPm GBPm GBPm
------------------------------------------- ------- ------- -------
Revenue 220.2 104.0 324.2
------------------------------------------- ------- ------- -------
Underlying operating profit 26.9 6.9 33.8
IAS 19R administrative expenses (1.4) - (1.4)
Acquisition related costs (3.5) (0.2) (3.7)
Exceptional operating items (3.6) (0.2) (3.8)
------------------------------------------- ------- ------- -------
Operating profit 18.4 6.5 24.9
------------------------------------------- ------- ------- -------
Finance costs (6.4)
------------------------------------------- ------- ------- -------
Profit before taxation 18.5
Taxation (3.5)
------------------------------------------- ------- ------- -------
Profit for the year 15.0
------------------------------------------- ------- ------- -------
Net cash 10.5
------------------------------------------- ------- ------- -------
Segmental assets 221.4 90.8 312.2
Segmental liabilities (125.6) (38.2) (163.8)
Additions to property, plant and equipment 1.6 0.9 2.5
Depreciation and amortisation 8.5 4.6 13.1
------------------------------------------- ------- ------- -------
The split of revenue by geographical destination of the customer
is below:
2022 2021
GBPm GBPm
-------------- ----- -----
UK 222.4 189.4
Africa 141.9 105.8
Rest of World 32.0 29.0
-------------- ----- -----
396.3 324.2
-------------- ----- -----
No one customer had revenue over 10% of total Group revenue
(2021: none).
3. Acquisition related costs and exceptional operating items
An analysis of acquisition related costs and exceptional
operating items is shown below:
2022 2021
Acquisition related costs GBPm GBPm
------------------------------- ----- -----
Intangible asset amortisation1 3.7 3.7
Advisory fees(2) 1.1 -
------------------------------- ----- -----
4.8 3.7
------------------------------- ----- -----
1 Non-cash amortisation charges in respect of acquired intangible assets.
2 Professional advisory fees incurred in connection with the
Group's business combination activities
2022 2021
Exceptional operating items GBPm GBPm
---------------------------------- ----- -----
COVID-19 related restructuring1 - 3.8
Release of UK Property Provision2 (0.9) -
---------------------------------- ----- -----
(0.9) 3.8
---------------------------------- ----- -----
1 Exceptional costs of GBP3.8m were incurred in the prior year
in relation to COVID-19 related restructuring programmes across the
Group as a result of the impact of COVID-19 on the economies we
trade in.
2 The UK property provision related to the only remaining
surplus and legacy onerous property lease at Groundwell, Swindon.
In the year, the Group reached agreement with the landlord to exit
the lease early. A cash settlement payment of GBP1.3m including
dilapidation obligations was made in the period. The remaining
GBP0.9m of the related provision has been released as an
exceptional operating item.
4. Finance costs
2022 2021
GBPm GBPm
----------------------------------------------------------- ----- -----
Interest payable on bank borrowings 0.8 1.5
Interest on lease liabilities 1.7 1.7
Movement on fair value of derivative financial instruments - 2.0
Property lease discount 0.1 -
Amortisation of costs of raising debt finance 0.2 0.2
----------------------------------------------------------- ----- -----
Finance costs 2.8 5.4
----------------------------------------------------------- ----- -----
5. Alternative performance measures
The Group makes use of a number of alternative performance
measures to assess business performance and provide additional
useful information to shareholders. Such alternative performance
measures should not be viewed as a replacement of, or superior to,
those defined by Generally Accepted Accounting Principles (GAAP).
Definitions of alternative performance measures used by the Group
and, where relevant, reconciliations from GAAP-defined reporting
measures to the Group's alternative performance measures are
provided below.
The alternative performance measures used by the Group are:
Measure Definition
---------------------------- ------------------------------------------------------
Underlying operating profit Operating profit before IAS 19R administrative
expenses, acquisition related costs and exceptional
operating items.
---------------------------- ------------------------------------------------------
Underlying profit before Profit before taxation before IAS 19R administrative
taxation expenses, acquisition related costs, exceptional
operating items, amortisation of costs of
raising finance, net movement on fair value
of derivative financial instruments, discounting
of property lease provisions and finance costs
relating to pension schemes.
---------------------------- ------------------------------------------------------
Underlying taxation Taxation on underlying profit before tax.
---------------------------- ------------------------------------------------------
Underlying earnings Underlying profit before tax less underlying
taxation.
---------------------------- ------------------------------------------------------
Underlying capital employed Capital employed on a pre-IFRS 16 basis adjusted
for business combinations where relevant and
the average impact of exchange rate movements.
---------------------------- ------------------------------------------------------
Underlying operating margin Underlying operating profit expressed as a
percentage of revenue.
---------------------------- ------------------------------------------------------
Underlying return on capital Underlying operating profit on a pre-IFRS
employed (ROCE) 16 basis expressed as a percentage of the
average of opening and closing underlying
capital employed.
---------------------------- ------------------------------------------------------
Basic underlying earnings Underlying earnings divided by the weighted
per share average number of shares for basic earnings
per share.
---------------------------- ------------------------------------------------------
Diluted underlying earnings Underlying earnings divided by the weighted
per share average number of shares for diluted earnings
per share.
---------------------------- ------------------------------------------------------
Underlying EBITDA Underlying EBITDA is derived from underlying
operating profit before depreciation and amortisation
excluding the impact of IFRS 16 in line with
our banking covenants.
---------------------------- ------------------------------------------------------
Underlying operating cash Cash generated from continuing operations
flow before cash outflows from exceptional items
and acquisition related costs and pension
fund deficit recovery contributions.
---------------------------- ------------------------------------------------------
Underlying net debt/cash Underlying net debt/cash is the net of cash,
capitalised costs of raising finance and total
borrowings. IFRS 16 lease commitments are
not included in line with our banking covenants.
---------------------------- ------------------------------------------------------
Pro-forma underlying EBITDA An annualised underlying EBITDA figure used
for the purpose of calculating banking covenant
ratios.
---------------------------- ------------------------------------------------------
Pro-forma leverage Net debt expressed as a ratio of pro-forma
underlying EBITDA.
---------------------------- ------------------------------------------------------
Underlying profit and underlying earnings per share measures
provide shareholders with additional useful information on the
underlying performance of the Group. This is because these measures
are those principally used by the Directors to assess the
performance of the Group and are used as the basis for calculating
the level of the annual bonus and long-term incentives earned by
the Directors. Underlying ROCE is one of the Group's strategic key
performance indicators and is therefore provided so that
shareholders can assess the Group's performance in relation to its
strategic targets. Underlying EBITDA and underlying operating cash
flow are also used internally by the Directors in order to assess
the Group's cash generation. The term 'underlying' is not
recognised under IFRS and consequently the Group's definition of
underlying may differ from that used by other companies.
Reconciliations from GAAP-defined reporting measures to the
Group's alternative performance measures
Consolidated Income Statement
(a) Underlying profit before taxation and underlying
earnings
2022 2021
GBPm GBPm
----------------------------------------------------------- ----- -----
Profit before taxation 33.0 18.5
Adjusted for:
- IAS 19R administrative expenses 1.7 1.4
- acquisition related costs (see note 3) 4.8 3.7
- exceptional operating items (see note 3) (0.9) 3.8
- amortisation of costs of raising finance 0.2 0.2
- net movement on fair value of derivative financial
instruments - 2.0
- property lease discount 0.1 -
- IAS 19R finance cost 0.4 1.0
----------------------------------------------------------- ----- -----
Underlying profit before taxation 39.3 30.6
----------------------------------------------------------- ----- -----
Taxation attributable to underlying profit before taxation (7.8) (5.5)
----------------------------------------------------------- ----- -----
Underlying earnings 31.5 25.1
----------------------------------------------------------- ----- -----
(b) Underlying EBITDA
2022 2021
GBPm GBPm
----------------------------------------------- ----- -----
Operating profit 36.2 24.9
Adjusted for:
- depreciation and amortisation (owned assets) 5.2 5.4
- depreciation of leased assets 4.1 4.0
- lease costs (5.7) (5.3)
- IAS 19R administrative expenses 1.7 1.4
- acquisition related costs 4.8 3.7
- exceptional operating items (see note 3) (0.9) 3.8
----------------------------------------------- ----- -----
Underlying EBITDA (pre-IFRS 16) 45.4 37.9
----------------------------------------------- ----- -----
Consolidated Cash Flow Statement
(a) Underlying operating cash flow
2022 2021
GBPm GBPm
---------------------------------------------------- ----- -----
Cash generated from operations (see note 7) 23.6 60.0
Adjusted for:
- cash flows from exceptional items and acquisition
related costs (see note 7) 1.7 2.5
- pension fund deficit recovery contributions 3.3 3.3
---------------------------------------------------- ----- -----
Underlying operating cash flow 28.6 65.8
---------------------------------------------------- ----- -----
Consolidated Balance Sheet
(a) Underlying capital employed and underlying return on capital
employed
2022 2021
GBPm GBPm
------------------------------------------------------ ------ ------
Net assets 200.3 148.4
Adjusted for:
- pension scheme (asset)/liability (net of associated
tax) (14.7) 14.8
- right of use assets (IFRS 16) (19.9) (19.6)
- lease liabilities (IFRS 16) 24.0 24.2
- Onerous lease provision (IFRS 16) - (0.8)
- cash and cash equivalents (27.4) (28.3)
- financial liabilities - borrowings 18.8 17.8
------------------------------------------------------ ------ ------
181.1 156.5
Foreign exchange adjustment (1.7) 0.8
------------------------------------------------------ ------ ------
Underlying capital employed 179.4 157.3
------------------------------------------------------ ------ ------
Average underlying capital employed 168.3 178.9
------------------------------------------------------ ------ ------
Underlying operating profit (pre-IFRS 16) 40.2 32.5
------------------------------------------------------ ------ ------
Underlying return on capital employed 23.9% 18.2%
------------------------------------------------------ ------ ------
6. Earnings per share
Basic EPS is calculated by dividing the profit attributable to
shareholders by the weighted average number of ordinary shares in
issue during the year, excluding those held in the Norcros Employee
Benefit Trust.
For diluted EPS, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all potential dilutive
ordinary shares. At 31 March 2022 the potential dilutive ordinary
shares amounted to 1,504,604 (2021: 201,781) as calculated in
accordance with IAS 33.
The calculation of EPS is based on the following profits and
numbers of shares:
2022 2021
GBPm GBPm
-------------------- ----- -----
Profit for the year 25.7 15.0
-------------------- ----- -----
2022 2021
Number Number
------------------------------------------------------- ---------- ----------
Weighted average number of shares for basic earnings
per share 80,887,240 80,575,242
Share options 1,504,604 201,781
------------------------------------------------------- ---------- ----------
Weighted average number of shares for diluted earnings
per share 82,391,844 80,777,023
------------------------------------------------------- ---------- ----------
2022 2021
---------------------------- ----- -----
Basic earnings per share:
From profit for the year 31.8p 18.6p
---------------------------- ----- -----
Diluted earnings per share:
From profit for the year 31.2p 18.6p
---------------------------- ----- -----
Basic and diluted underlying earnings per share
Basic and diluted underlying earnings per share has also been
provided which reflects underlying earnings from continuing
operations divided by the weighted average number of shares set out
above.
2022 2021
GBPm GBPm
--------------------------------- ----- -----
Underlying earnings (see note 5) 31.5 25.1
--------------------------------- ----- -----
2022 2021
-------------------------------------- ----- -----
Basic underlying earnings per share 38.9p 31.2p
Diluted underlying earnings per share 38.2p 31.1p
-------------------------------------- ----- -----
7. Consolidated cash flow statement
(a) Cash generated from operations
The analysis of cash generated from operations is given
below:
Continuing operations
2022 2021
GBPm GBPm
------------------------------------------------------------- ------ -----
Profit before taxation 33.0 18.5
Adjustments for:
- IAS 19R administrative expenses included in the Income
Statement 1.7 1.4
- acquisition related costs included in the Income Statement 4.8 3.7
- exceptional items included in the Income Statement (0.9) 3.8
- finance costs included in the Income Statement 2.8 5.4
- IAS 19R finance cost included in the Income Statement 0.4 1.0
- cash flows from exceptional items (1.7) (2.5)
- settlement of share options - (0.2)
- depreciation of property, plant and equipment 5.1 5.2
- underlying amortisation 0.1 0.2
- depreciation of right of use asset 4.1 4.0
- pension fund deficit recovery contributions (3.3) (3.3)
- IFRS 2 charges 1.1 1.0
------------------------------------------------------------- ------ -----
Operating cash flows before movement in working capital 47.2 38.2
Changes in working capital:
- (increase)/decrease in inventories (22.7) 3.8
- increase in trade and other receivables (5.1) (5.0)
- increase in trade and other payables 4.2 23.0
------------------------------------------------------------- ------ -----
Cash generated from operations 23.6 60.0
------------------------------------------------------------- ------ -----
(b) Analysis of underlying net cash/(debt)
Current Non-current Underlying
Cash borrowings borrowings net cash/(debt)
GBPm GBPm GBPm GBPm
------------------------- ------ ----------- ----------- ----------------
At 1 April 2020 47.3 (0.1) (83.6) (36.4)
Cash flow (19.6) 0.1 66.0 46.5
Non-cash finance costs - - (0.2) (0.2)
Other non-cash movements - - - -
Exchange movement 0.6 - - 0.6
------------------------- ------ ----------- ----------- ----------------
At 31 March 2021 28.3 - (17.8) 10.5
Cash flow (2.5) - (2.0) (4.5)
Non-cash finance costs - - 1.0 1.0
Other non-cash movements - - - -
Exchange movement 1.6 - - 1.6
------------------------- ------ ----------- ----------- ----------------
At 31 March 2022 27.4 - (18.8) 8.6
------------------------- ------ ----------- ----------- ----------------
Non-cash finance costs relate to the movement in the costs of
raising debt finance in the year.
8. Post balance sheet event
On 31 May 2022 the Group acquired Granfit Holdings Limited and
subsidiaries, a market leading designer, manufacturer and supplier
of waterproof bathroom panels in the UK. As part of the acquisition
of 100% of the share capital of Granfit Holdings Limited,
provisional net assets of GBP10m were acquired for consideration of
GBP80m with an additional potential earnout of up to GBP12m based
on certain performance criteria. The acquisition was funded through
an equity placing and utilisation of the Group's banking
facilities. At the date of approval of these financial statements,
due to the proximity of the acquisition to the reporting date, a
fair value exercise has not yet been completed, and so these values
remain provisional.
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END
FR FLFSTRVITIIF
(END) Dow Jones Newswires
June 09, 2022 02:02 ET (06:02 GMT)
Norcros (AQSE:NXR.GB)
過去 株価チャート
から 12 2024 まで 1 2025
Norcros (AQSE:NXR.GB)
過去 株価チャート
から 1 2024 まで 1 2025
