Nice to have some positive news in the current turmoil caused by Trump's tariffs
Norcros poised for recovery, says Berenberg
Bathroom supplies group Norcros (NXR) has a navigated subdued environment and will benefit from a recovery when it arrives, says Berenberg.
Analyst Robert Chantry retained his ‘buy’ recommendation and target price of 350p on the stock, which was trading up 6.3% on Thursday morning at 211p and has increased 20% over the past 12 months.
A trading update for the full year to March was in line with market expectations, and the group delivered 0.8% like-for-like growth despite the ‘tough market backdrop’, with the UK trading in particular ‘benefiting from exposure to the more resilient mid-premium part of the market’.
‘Group adjusted Ebit margins also show ongoing improvement,’ said Chantry.
‘Norcros has navigated the current subdued markets well, and remains well positioned for an uptick in end-market demand, as and when it arrives.’ |
A year-end update from Norcros confirmed modest LFL revenue growth in both divisions (including a slightly better H2 outturn) as well as a firmer group operating margin. Net debt was in line with the prior year, representing c.1x EBITDA.
There should be no headwinds from current global tariff machinations and ongoing business collaboration and active portfolio management should be recurring themes going into FY26.
On unchanged estimates, Norcros is trading on a mid-single digit P/E, offering a dividend yield above 5%. The latest DB pension triennial outcome (announced March 13) should have a positive impact on future cash flow and DCF valuation metrics; we will review our estimates and fair value with FY25 results in June.
Read our research here: |
(hxxps://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=7357787&lang=en-GB&companycode=uk-nxr&v=r2024)
Norcros expects annual cash contributions to legacy DB scheme to be less than £1m pa from June 2027, down from £3.8m pa. |
Nice to see Directors buying more at 235p. 25k purchase approx. |
cheers cold pasta man - great find.
Ouchies - looks like they took one hell of a beating there - i did only skim read info i must admit.
i cant see anything about this case on skim read of annual report or recent results
lets just hope if it is bad news that the sums involved are not material
not brilliant that there doesnt apepar to be anything from company - hopefully lack of update means that any implicatioons are non matyerial in the scheme of things.
If i was on the sidelines looking to add i might be waiting or asking company for comment before taking any action |
Interesting - Norcros lose a patent case. Judgement handed down this week. |
I have registered for the zoom meeting tomorrow as well.
The posts by helen40 and sprio8 look strange as their first posts on ADVFN and neither have posted anywhere else! |
There has been no change to NXR strategy or targets set at the time of the Capital Markets Day. As you can hear from Thomas and James themselves, who are also hosting an ED webinar tomorrow morning , Wed 27th, with a 10am start. All are welcome, and it will be recorded.
To attend, just register here: |
Ref Africa they are in clearly for a penny in for a pound - i suspect if they knew the score of how it is on the ground there nowadays they would have stayed well clear off going down then sa route ref investing extra there. We cant turn back the clock though - so i suspect they are simply trying to make best of what they have rfe generating profit. Historically africa has delivered well based on what they invested so their strategy hasnt not worked up to now - the reality is though its right to place material discount on everything sa related on the basis that the profits could permanently dry up through no fault of their own anytime soon. Hopefully for holders sa becomes lower share of overall profits long term- so any other acquisitions that dilute the earnings of sa is good imho. |
Would be interested in their strategy in Africa. It’s not talked about too much. |
Yes have registered and hoping to see if they are going to confirm the strategy the talked about in their CMD |
Have you seen that Norcros are hosting a webinar discussing their interim results - online event will be hosted by CEO and CFO, and will begin at 3:15pm today - the 26th! - hxxps://engageinvestor.news/NXR_IR24 |
Have you seen that Norcros are hosting a webinar discussing their interim results for the online event will be hosted by CEO and CFO, and will begin at 3:15pm today - the 26th! - hxxps://engageinvestor.news/NXR_IR24 |
Have you seen that Norcros are hosting a webinar discussing their interim results - online event will be hosted by CEO and CFO, and will begin at 3:15pm today - the 26th! - |
Nice to see that ED expect to coem doww at a decent lick
3.7 this 23.8 2026 and 12.7 2027. So even if the company doesnt do anything of note that quitea decent vanishing of the net debt over teh next 30 months or so. looks like ED unlike Berenberg are slightly reducing expectations. |
 "Steady H1, building for the future"
Continuing businesses delivered H125 revenues, in line with last year’s comparator. Underlying profitability was also similar prior to costs taken above the line from a couple of discrete actions in the period. Net debt rose to 1x EBITDA, being in line with H124, and the company’s strong balance sheet position allowed it to absorb short-term working capital movements. Management expectations are unchanged and Norcros remains keenly focused on delivering strategic progress to achieve targets set out in May.
The Norcros share price has substantially out-performed the FTSE All-Share Index YTD. Nevertheless, across our estimate horizon, Norcros still sits on valuation discounts to its peer group averages ranging from 40-50% on a P/E basis and 25-30% for EV/EBITDA whilst offering a 25% dividend yield premium. We believe that sector sentiment will improve and this will support share price progress generally but Norcros offers more than cyclical recovery in our view. As strategic action outcomes become more apparent (e.g. in EBIT margins) we would expect to see further share price outperformance for Norcros. Under our DCF approach, the current share price is equivalent to ‘steady state’ EBITDA of c£63m; so some progress beyond our FY27E estimate is being factored in but not yet the higher potential levels that we have highlighted previously.
Link to research report: |
Cheers PJ84
In some respects is reasuring to know that they arent really factoring in any improvement in market conditions this year based on thiose comments. thats probably just as well as as there doesnt seem to be much positivity with regard to when we might expect things to start to improve in that regard - one of the main election promises of labour was ambitious newbuild housing targets - and they are already admitting thats tougher in the real world compared to the fantasy world of what they promised they would deliver pre election.
If they buble along as they are and pay down debt and pesnion scheme liabilities continue to reduce then thats no bad thing even if growth is anemic or non existent short term.
I would say even at 250p this company has had decent rerating over the last 6-12 months without them really doing much positive. The danger is the tendancy of this to share end up back at dirt cheap p/e at the first sight of stuff not going well - so i wouldnt say price cant drift back down further even if to me rating seems modest as things are. |
Buy’ Norcros, says Berenberg
Bathroom supplies group Norcros (NXR) is succeeding in gaining share in a difficult market and Berenberg says it can manage the downturn well.
Analyst Robert Chantry retained his ‘buy’ recommendation and target price of 325p on the stock, which fell 8.6% to 245.6p last week following first-half results.
Chantry said they were ‘consistent with the commentary and guidance given at the first half trading update on 10 October’.
‘Revenue is effectively in line with the prior year on a constant currency like-for-like basis, while underlying operating profit at £19.7m is slightly ahead of the guidance in that trading update,’ he said.
‘As such, the company expects full-year underlying operating profit to be in line with market expectations.’
Chantry said the company is expecting to make 54% of its profit in the second half, which ‘assumes the subdued market conditions continue for the rest of the year’.
‘We leave our numbers unchanged and remain of the view that the business can manage the current downturn well, take share, improve margins and look to consolidate parts of the end-market in time,’ he said. |
Admirable resilience shown (again) by Norcros plc in H1 results and div increased to 3.5p / share.
Board expects FY operating profit to be in line with market expectations too |
Still confident |
Feel this will move up again shortly |
Shore Capital: Norcros deserves more
"Analyst Tom Fraine retained his ‘buy’ recommendation and ‘fair value’ target price of 400p on the stock, which climbed 3.7% to 252p at the end of last week.
The shares currently trade at 7.7 times full-year 2025 price/earning but Fraine said this ‘fails to recognise Norcros’s resilient operating performance over recent years’." |
"Steering a steady course in H1'25"
Norcros’ H1'25 pre-close statement infers that headline trading in Q2 was similar to Q1, leaving group revenue flat overall y-o-y for continuing businesses. On the same basis, while profitability looks to be slightly lower - which may reflect mix effects - company expectations for the full year are unchanged.
While easing inflation and interest rates have been welcomed in Norcros’s primary markets, any significant pick-up in economic activity is still pending as new governments bed in in both cases. H125 LFL revenues nudged ahead in the UK (continuing operations +1%) and declined modestly in South Africa (-2% at constant currency) giving a flat y-o-y performance at group level, excluding the exited Johnson Tiles UK and Norcros Adhesive businesses.
Our expectation is that management will report more fully on strategic actions taken to date with the H124 results. The completion of Vado’s warehouse consolidation moves and streamlining Grant Westfield’s distribution are two examples of positioning these businesses for growth with more efficient service platforms and greater alignment in these areas across operating companies.
We make no changes to our estimates or fair value ahead of the H1 results due out in November. As before, we believe that translating strategy into enhanced earnings growth can be the catalyst for generating share price upside that could be well in excess of our current fair value of 253.5p / share.
Link to research: |
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