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NXR Norcros Plc

177.00
-3.00 (-1.67%)
12 Apr 2024 - Closed
Delayed by 15 minutes
Norcros Investors - NXR

Norcros Investors - NXR

Share Name Share Symbol Market Stock Type
Norcros Plc NXR London Ordinary Share
  Price Change Price Change % Share Price Last Trade
-3.00 -1.67% 177.00 16:29:55
Open Price Low Price High Price Close Price Previous Close
176.00 175.00 178.50 177.00 180.00
more quote information »
Industry Sector
CONSTRUCTION & MATERIALS

Top Investor Posts

Top Posts
Posted at 08/1/2024 09:14 by davebowler
Zeus top ten 2024 pick -
UK underappreciated, South Africa misunderstood Norcros was one of our top picks 2023 and whilst the shares did not get the rerating we argued it deserved they did perform relatively well due to the strength of the operational execution in what was a very difficult year. The company remains a top pick for 2024 due to its discount to peers, despite long term margin expansion within the UK, its ability to win market share and, hopefully, a gradually improving operating environment that will highlight the undervaluation of the South Africa business. The UK business reported 13% operating margin in H1 24 and the SA business consistently generates both profit and cash but both seem to be undervalued by the market. An improving economic backdrop in SA might focus attention on the margin expansion in the UK leading to investors placing a higher multiple on the Group as a result.  The UK business continues to perform well: Over the last 10 years, Norcros has successfully grown revenue in its UK business in all but the two years during the pandemic. Impressively, over the last 5 years, UK revenue has grown at a 8.1% CAGR, whilst rising operating margins have magnified this result on its underlying EBIT, growing at a 5-year CAGR of 14.9%. During H1-24, the UK business also saw a 160bp improvement in its operating margin, growing to 13.0% from 11.4% a year earlier, despite a small drop in revenue. More importantly, this was somewhat driven by its recently acquired brand Grant Westfield (May 2022), highlighting the successful execution by management. If, as we expect, operating margin can get to mid teens over the next couple of years Norcros’ current multiple looks to materially undervalue the business relative to peers. A final point worth highlighting was the ability of its leading shower brand, Triton, to grow volumes during the first six months of the year, bucking the trend vs its peers and the wider RMI market.  South African business misunderstood: Representing c. 33% of Group revenue in FY23, Norcros’ South African business has a strong track record of growth with a 11.0% revenue CAGR between FY13 - FY23 (constant currency) and robust profitability. During H1-24, the region suffered due to some of the worst electricity load-shedding seen in recent history coupled with a GBP/ZAR exchange rate at historic lows. Whilst FX has a clear impact on reported numbers, management recently confirmed the region remains cash generative with no additional cash needed to fund operations, making the region self-sufficient. We believe this is misunderstood by the market. We also have reason to believe recent developments in the South African electricity market will drive higher demand in the medium term. In mid2023, the South African Government approved a new law to open up the electricity market for private companies, allowing the establishment of a competitive market away from its lossmaking state-owned monopoly, Eskom. Not only should this improve manufacturing operations, but less frequent load shedding should drive demand higher as confidence in the economy grows.  Valuation compelling: Based on consensus estimates, Norcros trades on a one-year-forward P/E of 6.2x and EV/EBITDA of only 4.8x, with a 5.4% dividend yield. The P/E ratio is more than a 50% discount to the average of its UK building products peers despite Norcros having forecasted average EBIT margins over the next three years in line with the peer average. At the current average FY1 UK peer EV/EBIT multiple (12.9x), the UK business alone would be worth c. 460p per share (adjusting for all of the Group’s net debt and leases and applying a UK EBIT margin of 12.5%), which is 140% more than the Group’s current share price.
Posted at 19/6/2023 19:23 by s34icknote
If the stocks getting tighter our 25k a pop investor might start pushing the price. Up !!!!
Posted at 01/3/2023 10:47 by jeff h
The pension membership has been falling by about 4.5% a year the last few years (2015 = 8,492 2022 = 6,002) can't be too long before a buyout takes place to remove it.

Unrest and power cuts etc in S.Africa remain a concern.


Norcros is undervalued, says SVM’s Veitch

The share price of bathroom and kitchen products supplier Norcros (NXR) fails to reflect the quality of the business, says SVM’s Neil Veitch.

Veitch holds the stock in his £165m SVM UK Opportunities fund, where it makes up 4.5% of assets, and in a recent update noted that the group has benefited from the ‘strong repair, maintenance and improvement market in the UK and positive longer-term trends for bathroom and plumbing products in South Africa’.

Annual sales are up 20% versus pre-pandemic levels and Norcros has gained market share at the expense of competitors.

‘The company’s decentralised operating model allowed it to react nimbly to supply chain and logistical challenges, while it had sufficient scale to ensure it could meet the demands of both existing and new customers,’ said Veitch.

He noted the ‘millstone’ pension, which despite having a net surplus has gross liabilities of £280m, greater than the group’s market cap.

‘The scheme, however, is super mature with a rapidly reducing membership. Higher interest rates should afford the group greater opportunity to investigate buyout options,’ said Veitch.

‘This will, we believe, remove something that has been a significant barrier to investment for many investors and potential acquirers.’

Despite the near-term economic uncertainty, Veitch said the ‘share price fails to reflect either the quality of Norcros’ business or its long-term growth prospects.’

‘Trading on an estimated March 2024 price/earnings of less than seven times and with a dividend yield of 5%, we believe that the stock is significantly undervalued,’ he said.
Posted at 16/11/2022 18:14 by kipper7
Investors appear to have realized that this stock is too cheap. Big volume over the last few sessions have resulted in a move to 200p. I expect 350 p minimum over time and remain fully long and picking up nice dividend
Posted at 12/11/2022 14:00 by jeff h
Interesting that in the Q&A section of the Interims Webcast mention the possibility of a buyout of the Pension Scheme in the "medium term" (2-5 years) was suggested,



This would mean the end of the deficit contributions currently £3.8m pa plus the admin costs of close to £2m pa.

Additionally as Smiths News (SNWS) holders will be aware any remaining surplus could be returned to the company.

Paul Scott recently interviewed CEO Nick Kelsall and kindly put it up on his website, well done Paul.
Posted at 25/10/2022 10:30 by jeff h
Norcros

Investors are unsure which number is larger — the total of people improving their homes rather than moving, or those postponing such projects in favour of heating and eating as the rise in prices outruns wage increases. Hence a renewed focus on the property sector and, in particular, the world of DIY.

Norcros is best known for Triton and Merlyn showers, Croydex bathroom accessories, Abode taps and Johnson tiles. It estimates that sales for its half-year to October 2 were £220 million compared with £200.9 million in the same period last year and £181.2 million for the first half of 2019. The company cautiously predicts “no less than £21 million” in underlying operating profit, compared with £22 million a year ago.

Within the sales total, those in Britain slowed by 3 per cent while they grew by 10 per cent in South Africa, the company’s other main territory. The group used to be in several other countries, including Nigeria, India and Australia, but during an eight-year absence from the stock market most of the other overseas interests were sold. Last year South Africa accounted for a third of total turnover and a quarter of operating profit.

The UK has a far more fragmented home improvement market than South Africa and Norcros is constantly looking at taking advantage of this with takeovers. The group also wants to develop the international pipeline, which may add risk as well as reward, of course.

This column last examined Norcros four years ago, which seems a world away. The shares were 214p then and recovered strongly from the Covid outbreak to breach the 300p watershed at the start of this year. But the Ukraine war and the cost of living crisis have dragged them down with the rest of the stock market.

If there is only a modest increase in earnings per share to 40p for this year, the shares are trading on a 4.4 price-earnings ratio. An unchanged dividend would give a 5.6 per cent yield. We will know more when the company reports its full interim results on November 9.

ADVICE Buy

WHY Undervalued shares that more than take account of foreseeable downsides
Posted at 10/10/2022 18:54 by kipper7
If my view on norcross changes listening to an undergraduate playing a game I shouldn't be a professional investor !
Posted at 01/10/2022 19:53 by debsdowner
Persimon is an example of a low pe ratio



Pe ration of 5 !!!

This is because the market doesn't think the near billion profits is sustaninable going forward.

Now don't get me wrong I am not trying to trash the share price I am stating the obvious the reason for many stocks collapsing is investors now taking fright as we enter a recession.

Thee worst case scenario is some companies will go bust Joules is looking like it may have to enter a CVA they have built debts up and consumer sentiment changed..well its been poor for months actually.
Posted at 09/11/2021 17:55 by tole
https://www.fool.co.uk/2021/11/09/results-this-month-could-send-this-cheap-share-rocketing/Results this month could send this cheap share rocketingAndy Ross | Tuesday, 9th November, 2021 | More on: NXRPrivate investor buying UK shares at home Image source: Getty ImagesThe last month or so has seen the FTSE 100 really recover. I hope this precedes an end-of-year rally in the stock market. If it does, I think Norcros (LSE: NXR) could be one of the major winners.Low price and dividend growth potentialNorcros manufactures and sells branded showers and owns brands such as Triton. Similar companies have seen strong growth since the pandemic as people focused on home improvement.This is one reason why I think Norcros half-year results, which will be out on Thursday (11 November), could be positive.Yet wider expectations don't seem to be that high because Norcros shares are cheap, trading on a P/E of just 10. This provides the firm with the opportunity to outperform expectations, and that could be good for the share price. The forward PEG of only 0.6 is another indication to me that the shares could be undervalued.The dividend also has plenty of room to grow as the yield is modest at the moment at 2.5%. The dividend is covered more than twice by earnings and has recovered to a level near to what it was pre-pandemic.I like what I see about the shares, beyond the low P/E. Norcros also has a good return on capital employed (ROCE) of 12. Return on equity is the same figure. Taken together I think these numbers show that Norcros could be a quality company. That boosts my confidence in its long-term potential.What could go wrong?Despite my expectations, of course, things might not go as planned for the firm. Norcros is turning around its South African business, but progress might not be as good as management hopes. In the UK tax rises and a squeeze of household budgets may limit home improvement spending too, which would likely hit the firm.Potentially it could also overpay for acquisitions, which could hurt shareholder returns. Low organic growth, if it doesn't improve the performance of the brands it already owns, may also hit the share price.The pension deficit (boring and easy to overlook, I know) is also coming down but is still a drain on the company. It requires Norcros to use cash for pensions rather than spending on acquisitions, investing in its brands or other growth, or paying a larger dividend. The deficit has been massively reduced so it's now less of an issue and requires less cash. But it's still over £18m in deficit. At the end of the day, it's hard to tell what any share price will do in the short term. But I expect that a good update this week could see the share price do very well this month if investors respond positively. And it could also provide evidence that Norcros could do well in the future too. I already own Norcros shares and for me, their low price, the firm's decent returns on capital and growing dividend make it a long-term hold, unless something goes very wrong.
Posted at 24/6/2021 19:36 by tole
https://www.fool.co.uk/investing/2021/06/24/best-shares-to-buy-now-the-top-growth-share-id-buy-with-2k/Norcros (LSE:NXR) just jumped right to the top of my picks for the best shares to buy now. The £245m market cap business supplies high-end bathroom and kitchen branded products. Most wouldn't look out of place in a posh Kirsty and Phil makeover, like Abode sinks and taps, and Johnson ceramic tiles. UK homeowners splashed out £39bn in the last 12 months on property improvements, according to recent surveys. It's understandable, with more people working from home and seeing upgrades they'd like to make. And I really like the figures I see in the Norcros back-end. Net profit is expected to jump 72% from £15m to £25.8m in 2021. And yet the shares are trading on a forward P/E of less than 10. So there's value plus growth potential here. Bosses have continually improved the company's profitability over the past few years. Return on capital nearly doubled from 6.8% in 2020 to 12% in 2021. This shows me it's a well-managed business. Some of the country's richest investors seem to agree these are the best shares to buy now. Premier Asset Management, the company's largest institutional shareholder, upped its stake by 773,000 shares on 16 June. It now holds more than 11% of the business.OutlookThere are a few dampeners to consider. It's not all sunshine and roses, and as an investor, I need to keep a calm head and not get overexcited. Group revenue for the year to 31 March 2021 dipped around 5%, to £342m. And Norcros's South African arm pulled in a slightly lower percentage of the group's revenue this year than than the year before. "Group revenue outside the UK has decreased in the year to 41.6%, reflecting the impact of Sterling strengthening relative to the Rand," Norcros said. South African currency markets have experienced significant volatility over the past 12 months. And as local business reporters note, that made it bad news for anyone moving funds out of the country. But looking further ahead, I can see Norcros expects its revenues to keep growing, along with those tasty net profits. And earnings per share (EPS) are forecast to jump from 22.4p to 31.5p next year. That 30% EPS hike comes at good value. Price-to-earnings growth stands at less than 0.5. Anything under 1 is generally considered excellent value.

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