Norcros PLC Trading Update (8612P)

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RNS Number : 8612P

Norcros PLC

12 October 2023

Trading update

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

Robust trading performance in line with expectations

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

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

In our UK business, reported revenue for the first half was 1% higher than the previous year and on a LFL (2) basis, just 1% lower with Triton and Merlyn performing particularly strongly. We continue to proactively manage our capital allocation and, in this regard, will be reducing manufacturing capacity at Johnson Tiles (UK) by approximately 50% in response to lower UK tile demand. Costs associated with this of circa GBP1.4m will be reported separately as an exceptional item.

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

Group revenue for the 26 week period is approximately GBP202m (2022: GBP219.9m), 4% lower on a constant currency LFL (2) basis and 8% lower on a reported basis than the record prior year comparator.

Our performance in the first half of this financial year continues to reflect the strength of our in-house product development capabilities, leading brands and excellent customer service proposition. We expect to report an underlying operating profit in the first half of the year of no less than GBP21m (2022: GBP22.0m).

Financial position

The balance sheet remains strong with net debt of approximately GBP48m on a pre-IFRS16 basis (net debt of GBP58.9m as at 30 September 2022 and GBP49.9m as at 31 March 2023). This represents leverage of approximately 1.0x net debt to EBITDA. The Group has committed banking facilities of GBP130m maturing October 2026.

Senior management appointment

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

Outlook

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

(1.) CC refers to constant currency basis

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

(3.) Norcros compiled market consensus for the year to 31 March 2024 is for an underlying operating profit of GBP43.4 million

Enquiries

 
 Norcros plc                         Tel: 01625 547700 
 Thomas Willcocks, Chief Executive 
  Officer 
 James Eyre, Chief Financial 
  Officer 
 
 Hudson Sandler                      Tel: 0207 796 4133 
 Nick Lyon 
  Sophie Miles

Notes to Editors

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

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

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

Norcros is headquartered in Wilmslow, Cheshire and employs around 2,400 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com

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October 12, 2023 02:00 ET (06:00 GMT)

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