Norcros Share Discussion Threads

[sg31] 11/11/2021 18:02

Look at it in a weeks time. Sometimes it takes a while for the market to digest the info.

[saurish] 11/11/2021 17:04

Baffling reaction to outstanding interims. A good company that is undervalued IMHO. Happy to hold.

[fegger] 11/11/2021 12:14

Definitely surprised by slight fall in price this morning. Is undervalued and happy to continue to hold long term. COuld elimination of pension debt be the revaluation trigger? The deficit is now £6 million. Company is paying over £3 million a year in pension contributions. I know that pensions have an underlying accounting treatment which is often different but it looks a favourable position now especially with the company having grown so much in size

[thorpematt] 11/11/2021 08:20

The comparisons to 2019 are fab.

The PD is getting closer to non-existence.

NXR remains undervalued.

A growing company on modest PERs.

Strong brands with the ability to raise prices in an inflationary environment and barriers to entry.

[spangle93] 11/11/2021 08:14

Positive results, as flagged in Trading updates, this morning



Interim dividend restored at same level at 2019

EPS from ongoing operations 20p

Cash positive "Balance sheet remains very strong with £1.0m net cash" - no net debt

Pension liability down markedly
"The gross deficit relating to our UK defined benefit pension scheme as calculated under IAS 19R has reduced from £18.3m at 31 March 2021 to £6.1m. This decrease is primarily due to a strong investment performance which more than offset the marginal increase in pension liabilities."

Outlook cautiously optimistic
"Supply chain challenges, increased energy costs, inflationary cost pressure and a normalisation of consumer spending patterns mean that uncertain market conditions are likely to prevail during the remainder of the financial year. Notwithstanding these factors and based on the excellent first half performance and the Group's revenue momentum, the Board remains confident our proven business model and leading customer proposition will lead to further progress, in line with its expectations, for the year to 31 March 2022.

[xxx] 10/11/2021 18:21

Is that a cup + handle I see on the chart ? If so then indicates 400 target.
lets see...

[tole] 09/11/2021 17:55

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.

[jg88721] 19/10/2021 08:34

thanks!
EDISON have nmlsed NPAT of 27.7m (2022) and 28.8m (2023) giving nmlsed eps of 33.4 and 34.7

GLTAH

[rmillaree] 15/10/2021 14:04

stockopedia have 26 mill this year and 27 next year expected net profit thats eps of 33.1p this year and 34.9 next year. Note stockopedia may use there own adjusted calcs so no certainty these numbers would match the companies expectations.
Strangely it looks like epos may have been upped 1p in the last week while profits numbers lok unchanged for thelast month - so i suspect all these numbers are before yeterdays update.

[jg88721] 15/10/2021 09:34

good update. Anyone seen any forecasts? Referencing Board's expectations (which are not public IIUC) is NOT very useful

[zipstuck] 15/10/2021 09:06

Certainly high inventory needed but conversely a hindrance to cash in a downturn.

[thorpematt] 14/10/2021 18:40

A very pleasing update indeed it must be said.

NXR is one of the few holdings I have not top-sliced of late, as I felt it offered such good value.

Management have done a fine job of increasing the number of quality brands whilst also expanding the company and thus diluting the efffect of the PD.

I really do think the market should wake up to this one a bit more. It's my third largest holding now and I am happy for it to remain "un-sliced".

[sg31] 14/10/2021 18:01

The pension scheme total liability is now reducing each year

2017 467 mill
2018 447 mill
2019 428 mill
2020 410 mil

The payments are reducing each year at around £24M. Total assets are £397M so they can carry the same payout for 16/17 years. Over that time many pensioners will stop claiming on the scheme. Only 3 % of scheme members are still to start claiming.
In effect few will join but a lot will leave.

The size of the pension 'problem is reducing, it is under control. It needs watching but is over played by many.

[xxx] 14/10/2021 14:16

I have held for 7/8 years from memory. Over that time I have become quite comfortable with management. They were the first to advise of the Covid supply chain issues and changed stock to cash very promptly and now they have not only reversed the feat, but done so with whilst maintaining a really strong balance sheet [see comments today].
Of all the companies I hold, I have to say that they are probably the best managed.

I saw a comment on the pension deficit elsewhere. This is a red herring now as bond yields have risen and it will therefore shrink. The deficit payments will then reduce/ disappear at the next trienniel valuation imv.
If progress announced thus far is maintained, I expect a significantly increased dividend, but let us wait for the full interim results...

[edmundshaw] 14/10/2021 08:59

Very pleased with the South Africa performance. That was a concern I have to say...

[rmillaree] 14/10/2021 08:22

Looks like NXR are trying to break the LSE record for amount of "ahead of expectations" updates thye can put out in one calendar year.

I had a quick look backover and it appears h2 has normally been the busier period - so not necessarily expecting brokers will up to 400 millexepcted turnover but they look like they are nicely placed to be in that ballpark.

P/e this morning before opening was 8.9 per stockopedia - so still very unloved share despite the fact the 150-200p days are well in the rear mirror now - lets hope i have tempted fate by saying that.

[pugugly] 14/10/2021 08:03

L2 Looking very strong at the moment

[spangle93] 14/10/2021 07:40

Looks like another strong set of figures to anticipate, based on today's "outperformance" trading update



Though I'm sure everyone has experienced things that are out of stock, hard to acquire etc, and the supply chain issues must reduce potential sales?

[pugugly] 14/10/2021 07:38

Excellent news - Should be a BLUE DAY
.
"Notwithstanding these factors, and based on the excellent first half performance and the Group's strong revenue momentum, we expect underlying operating profit for the year to 31 March 2022 to be significantly ahead of the board's previous expectations."

[thorpematt] 21/7/2021 13:46

xxx

1. Pension defecit
2. South Arfica


Like yourself I ask this question when I see what I perceives to be a mis-price.

If I think the market has over-reacted to the negative side and can convince myself this is so I will buy the stock.

"Sometimes the market can stay irrational longer than you can stay solvent " is one quote I have in the back of my mind when I do so. But I don't buy on leverage and this certainly is not going bust.

The PD is not the issue it once was. As you elluded to, the management have navigated this in a very canny way (the acquisiotioned growth has drawrfed the PD by proportion of ration to earnings). Many market analysts are still living in the past with this stock.

The S.A thing is also nothing like as significant as some seem to think. Obviously any political situation is difficult to quantilfy but in terms of how it effects this business it's not in my view enough to warrant a major discount.

[xxx] 21/7/2021 09:10

I have owned this share for a few years now and bearing in mind the progress in managing the shape of the business, accretive acquisitions and the really successful way they managed the last year, warning early, turning to cash and then turning trading back on, I am surprised at the lack of interest in the shares.
Why do people reckon this is so ?

[deanowls] 21/7/2021 09:06

During the quarter the Group implemented a number of measures to counter the well documented supply chain disruption and increases in freight and input costs to maintain margins.

Pug, I think it’s better to post the full paragraph for context.

[spooky] 21/7/2021 08:40

Management doesn't usually comment on the bottom line at the AGM.

[thorpematt] 21/7/2021 08:03

22% higher than 2019 sounds goood to me.

Strong brands = stronger pricing power IMO

[pugugly] 21/7/2021 07:48

Encouraging trading update so far as volumes -
Nothing however on bottom line - A concern (imo) in view of comments made on on increased costs "the well documented supply chain disruption and increases in freight and input costs"