Norcros PLC Trading Update (7004C)

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RNS Number : 7004C

Norcros PLC

13 October 2022

13 October 2022

Trading Update

Norcros plc ("Norcros" or the "Group"), a market leading supplier of high quality and innovative bathroom and kitchen products, will announce its interim results for the 26-week period ended 2 October 2022 on 9 November 2022. In advance of this, the Group is providing the following trading update.

Trading

The Group has delivered a robust H1 performance reflecting the strength of our customer proposition and the breadth of our distribution channels.

Group revenue for the 26 week period is expected to be at record levels at approximately GBP220m (2021: GBP200.9m 2020: GBP135.3m; 2019: GBP181.2m), 10% higher on a reported basis than the previous record prior year comparator (1% higher on a constant currency LFL(1) basis) and 20% higher than the pre-pandemic comparator of 2019 on a constant currency LFL(1) basis.

 
                        H1 LFL (1) revenue 
                        increase/(decrease) 
                                on 
                         2021        2019 
                     -----------  ---------- 
 UK                      (3%)         14% 
                     -----------  ---------- 
 South Africa            10%          22% 
                     -----------  ---------- 
 South Africa (at 
  CC (2) )               10%          32% 
                     -----------  ---------- 
 Group                    1%          17% 
                     -----------  ---------- 
 G roup (at CC (2) 
  )                       1%          20% 
                     -----------  ---------- 
 

In our UK business, LFL (1) revenue for the first half was 3% lower than the previous year, albeit 14% higher than in 2019 . Our performance in the trade channels remains resilient offset by softer demand in the retail channels and destocking in some of the larger retail customers.

Following its acquisition on 31 May 2022, Grant Westfield has been integrated into the Group and continues to perform strongly in line with the Board's expectations.

Our South African business has continued to outperform the market, with revenue for the first half 10% higher than prior year on a constant currency basis. Revenue was also 32% higher than in 2019 on a constant currency LFL(1) basis, with growth across all divisions reflecting market share gains.

Financial Position

The balance sheet remains strong with net debt of approximately GBP60m (pre-IFRS16) following the acquisition of Grant Westfield and is in line with the Board's expectations (net cash of GBP8.6m as at 31 March 2022). The Group has committed banking facilities of GBP130m maturing October 2025.

Pension Scheme

Notwithstanding the recent volatility in financial markets, and in particular the movement in gilt yields, the Group's UK defined benefit pension scheme obligations continue to be well managed and we expect the scheme to continue to be in an accounting surplus as at 30 September 2022.

Outlook

Our performance in the first half of this financial year continues to reflect the strength of our focussed operating model, market leading brands, broad distribution channels, well-developed supply chain infrastructure and stock availability. We expect to report an underlying operating profit in the first half of the year of no less than GBP21m (2021: GBP22.0m, 2020: GBP12.8m, 2019 GBP17.4m).

Notwithstanding the ongoing macroeconomic uncertainties, the Board remains confident that the Group will continue to win share and perform in line with the Board's expectations for the year to 31 March 2023.

(1.) LFL (like for like) adjusts 2019 revenue from a 27 to a 26 week period pro-rating and excludes Grant Westfield, which was acquired on 31 May 2022

(2.) CC refers to constant currency basis

Enquiries

 
 Norcros plc                     Tel: [phone] 
 Nick Kelsall, Chief Executive 
  Officer 
 James Eyre, Chief Financial 
  Officer 
 
 Hudson Sandler                  Tel: [phone] 
 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

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October 13, 2022 02:00 ET (06:00 GMT)