Norcros Share Discussion Threads

[spangle93] 13/6/2018 12:06

Taking comments at face value, I can see your concern, and taking a profit is never bad. I've certainly got a fair proportion of portfolion in cash waiting for an opportunity.

But that's really been the situation for the last 7 years - you can name any number of macro factors from Brexit through US presidents, Qatar vs Saudi and all the other Middle East turmoil, Russians in Crimea, and somehow the market has been grudgingly buoyant, so if you're out of it, it becomes a question of when do you get back in (plus missed dividends, of which NXR isn't shabby).

I've waited a while for NXR to start to move upwards, and there's now a very healthy trandline, so I think I'll stay longer ;-)

[loganair] 13/6/2018 11:38

I agree Norcros is undervalued and the share price may well go higher, however I am sticking with my convictions that there is going to be a 30% plus stock market correction which will see the Norcros share price fall then I will buy back in.

[1fox1] 13/6/2018 11:35

Whatever. Good luck to you either way. I will continue to hold. I think breaking through the old 20p barrier is a significant step in the right direction. In my opinion this share is still undervalued. Good divi too. £2.20p-2.50p next step up. £2 should now make a good support

[loganair] 13/6/2018 11:27

1fox1 - I wish that were true as yet I have never bought at the bottom and sold at the top otherwise I would have sold Norcros a little while back when at the beginning of 2014 when the share price reached nearly 250p and bought back in end of 2016 when it fell to 140p.

[1fox1] 13/6/2018 11:10

Loganair alias Walter Mitty. Another on who bought at the bottom and sold at the top ha ha ha.

[loganair] 13/6/2018 10:20

I hope I have done the right thing, I have just sold my entire holding in Norcros and in a years time hopefully I will be able to buy back in at a far lower price, after the 30% plus stock market correction which I think will happen in the next 6 to 12 months.

At least I have locked in a 90% profit not including the dividends.

[robsy2] 13/6/2018 09:18

Agreed.ON balance an excellent set of results. They have created some interesting opportunities for us. South Africa and beyond is a great opportunity. I like the way they focus on ROCE and invest in their brands. Exploiting the direct sales channels with strong brands is another excellent opportunity as is the ongoing strategic plan that gets them all focussed and on the look out for complimentary brands to add to their offering there leveraging their sales and distn and marketing spend.Smart.
This looks like a very well run company on a very undemanding rating. Let's see what Edison make of it all and how the presentation this morning looks.
I hope they don't give up on Johnsons Tiles either. I feel sure it will come good.
Best
R2

[shauney2] 13/6/2018 08:05

Not bad at all apart from Johnson tiles.That went into steep decline.More restructuring costing £2.1m needed for that division.

Debt up due to latest acquisition Merlyn which has fitted in very well.Pension deficit down, earnings and divi up.

[edmundshaw] 12/6/2018 10:02

Results tomorrow...

"The Group expects to deliver its ninth consecutive year of revenue and underlying operating profit growth despite increased market headwinds"

[thorpematt] 04/6/2018 07:28

I think the ROCE figure is better if you consider that the sector includes housebuilders. Those guys have been flying and unsurprisingly tilt the sector stats for ROCE upward somewhat.

The 62% EPS growth is in line or below what borkers forescasts state. In addition the divi cover will be closer to 4x than 2x

CEO is well paid I think. He's been there somewhile though ...so I wouldn't poke that with a stick too hard.

[robsy2] 03/6/2018 18:10

Thanks for sharing. The writer has a very bullish earnings forecast.easier to say than do though.
R2

[loganair] 03/6/2018 13:53

I was reading an analysts report, here is what was said that Norcros is a mispriced undervalued dividend stock and a financially sound company.


Positive:

1. Intrinsic values based on future cash flows - £4.60

At around £2 Norcros is way undervalued.

2. Norcros is good value based on earnings compared to the rest of the UK market.

3. At a PEG (Price based on Expected Growth) of just 0.2x, Norcros is good value based on expected growth next year.

4. As a Price based on Value of Assets of 1.9x, Norcros is good value based on assets compared to the UK Building industry average.

5. Norcros's earnings growth of 20% and revenue growth is expected to exceed the UK market average.

6. Norcros is able to meet its short term (1 year) and long term commitments with its holdings of cash and other short term assets. Assets are 3.7x debt.

7. Interest payments on debt are well covered 22.8x by earnings and 50.4% by operating cash flow.

8. Dividends are covered 1.8x by net profit.

9. The average tenure for the Norcros management team is over 5 years, this suggests they are a seasoned and experienced team.


Negative:

1. Norcros's use of capital has not improved over the past 3 years (Return on Capital Employed) and is below average for the UK building sector.

2. The CEO's compensation is higher than average for a company of this size and profit level.


Final Comments:

NXR is expected to deliver an extremely high earnings growth over the next couple of years of 62.23%, driven by a positive revenue growth of 18.39% and cost-cutting initiatives.

[xxx] 26/5/2018 06:39

@jg88721 I agree with targeting ROCE rather than revenue and wrote to the ceo offering that view, with no response. If similarly minded, others might like to do the same.

[robsy2] 24/5/2018 07:13

I am also quietly confident about this share . The directors seem capable and engaged and they have a plan. They also have a pretty good tarck record and the shares are not highly rated at all.
R2

[fredfishcake] 23/5/2018 10:29

It depends on your timeframe. In the long term, this is paying decent dividends, the pension fund deficit is likely to resolve itself and the company is growing. In the short term (ie the years I've been holding so far), it's a very frustrating share.

[ali47fish] 23/5/2018 08:58

thius is the third time i am in the blue and everytime i want to sell wait a bit and the share price is down again -even aftyer the revid=sed strategy whic has beeen a few months since it was announced the share price was down- please anyone can convince me this si worth holding

[loganair] 13/4/2018 14:17

Unlike many other companies at least Norcros seem to have a 5 year growth plan and I can also see of no reason why their dividends will also not grow by 10% a year. especially with Dividend cover of 3.5x.

Sub-Saharan Africa seems to be the place to be especially now South Africa and Kenya and it seems to me that is where Norcros's growth and next big buy will come from.

[edmundshaw] 13/4/2018 10:02

15% ROCE is pretty chunky. And it does give them the opportunity to underpromise/overdeliver, which is always the right way round.

[jg88721] 13/4/2018 02:58

good to see comments on the revised strategy, thanks Loganair

The target that got me was the ROCE >15%. Yes, that's a tougher target than the previous one (ROCE of 12-15%); but NXR are already exceeding that level of performance from the existing business. See slide 11, where they say ROCE for the last 4 years has been 15.0% (2014); 16.3% (2015); 18.3% (2016) and 18.4% (2017). So 15% looks too easy a target. Also, why target getting bigger (doubling revenues to 600m) but earning less per dollar of capital. Most shareholders, including me, would much prefer a higher return on capital (18%+) from a smaller business (say, get revenues to 450 or 500m). None of this is discussed in the presentation.

In short, I thought the revised ROCE target was very disappointing.

[hatfullofsky] 12/4/2018 23:37

Cheers, got that. Doesn't explain the extra ordinary volume

[loganair] 12/4/2018 23:16

Norcros announced the following new strategic targets which will be used to measure progress going forward.

-- Grow Group revenue to GBP600m by 2023
-- Maintain approximately 50% of Group revenue derived outside the UK
-- Achieve a sustainable underlying return on capital employed of >15%

1. 3 years ago Norcros said by the end of 2018 they would have group revenue of £420mln. It looks like they are going to miss this target by £90mln with revenue of £330mln.

However Norcros are still maintaining that group revenue will be £420mln by the end of 2018 by "Pursue a faster and focused growth strategy to scale up the size of the Group, organically and by acquisition." Therefore Norcros must have a sizable acquisition in mind to make up the £90mln they need.

Norcros say "Sub-Saharan markets offer good growth opportunities Housing and infrastructure shortages across the region. Acquisitions - Focus on Bathroom, Kitchen and Plumbing Fittings. Improving political and market conditions in both South Africa and neighbouring countries will provide a strong platform for continued growth over the next 5 years"

They put an arrow up from South Africa and circle Tanzania and Kenya.

2. In the same report 3 years go Norcros also said 50% of group revenue to derive outside the UK. Today 70% of revenue is from the UK and 30% from South Africa. The only way I can see this happening is for Norcros to make a sizable overseas acquisition.

[hatfullofsky] 12/4/2018 15:06

840,000 at 183pThat's some volume same as GMD sparking take over rumours.Any idea what's going on?

[sleepy] 11/4/2018 22:35

Shaun - trust the Air Partner “review” will include asking Aubrey Adams if he had any concerns about anything of which he was aware during his time as Chairman

[sleepy] 11/4/2018 20:24

The CFO and Board seem to be good at hiding important information from Norcros shareholders e.g. the financial performance of Johnson Tiles

Think the Norcros and Air Partner AGMs this year might be more interesting than usual