Norcros PLC Trading Update (6598D)

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RNS Number : 6598D

Norcros PLC

11 October 2018

11 October 2018

("Norcros", the "Group" or the "Company")

Trading Update

Norcros, a market leading supplier of high quality and innovative bathroom and kitchen products will announce its interim results for the half year ended 30 September 2018 on 15 November 2018. In advance of this, the Group is providing the following trading update.

Trading

Group underlying operating profit(1) for the first half is expected to be in line with the Board's expectations reflecting a robust performance and continuing to demonstrate the financial resilience of the Group.

Group revenue for the first half is expected to be approximately GBP162.5m (2017: GBP145.0m), 12.1% higher than the prior year on a reported basis, 13.2% higher on a constant currency basis, and level on a like for like(2) constant currency basis. This performance reflected strong organic revenue growth of 4.4% in the Group, excluding the significantly lower revenue from Johnson Tiles which was anticipated and largely due to the Kingfisher unified programme as previously reported.

 
          Half year to 30 September 2018 
                      Revenue 
                 Reported    Constant    Constant 
                             currency    currency 
                                           LFL(2) 
--------------  ---------  ----------  ---------- 
 
 UK                +16.4%      +16.4%      - 4.2% 
 
 South Africa       +3.9%       +7.1%       +7.1% 
 
 Group             +12.1%      +13.2%      - 0.3% 
--------------  ---------  ----------  ---------- 
 

(1) Underlying operating profit excludes IAS 19R administrative expenses, acquisition related costs and exceptional operating items

(2) LFL / like for like excludes Merlyn revenues (acquired 23 November 2017)

UK revenue for the first half was 16.4% higher than the prior year, reflecting in part the contribution from Merlyn, which continued to perform strongly in the period. On a like for like basis(2) , and excluding Johnson Tiles, UK revenue was 2.5% higher, reflecting a very resilient performance as trading conditions, particularly in the UK retail sector and a number of export markets, were challenging. The restructuring of the Johnson Tiles business, as announced in April, is proceeding to plan with the business back into profit in the first half.

Revenue grew in our South African business by 7.1% compared to the prior year, on a constant currency basis and by 3.9% on a reported basis reflecting the weaker South African Rand.

Financial position

Closing half year net debt is expected to be around GBP54m (2017: GBP20.8m), in line with expectations following the acquisition of Merlyn in the second half of last year.

Outlook

The robust performance in the first half against the backdrop of a challenging trading environment continues to demonstrate the strength of our market positions, our leading brands and the financial resilience of our diversified business model. The Board remains confident that these attributes will continue to drive market outperformance and will enable the Group to make further progress in line with its expectations for the year to 31 March 2019.

ENQUIRIES:

 
 Norcros plc                           Tel: [phone] 
 Nick Kelsall, Group Chief Executive 
 Shaun Smith, Group Finance Director 
 
 Hudson Sandler                        Tel: [phone] 
 Nick Lyon 
  Nelly Akpaka 
 Anneka Jirh 
 
 

Notes to Editors

-- Norcros is a 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 seven 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 - A leading manufacturer and supplier of ceramic tiles in the UK 
   --     Norcros Adhesives - Manufacturer of tile & stone adhesives, grouts and related products 
   --     Based in South Africa, Norcros operates under three brands: 

-- Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitary ware, showers and adhesives

   --     Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles 
   --     TAL - The leading manufacturer of ceramic and building adhesives 

-- Norcros is headquartered in Wilmslow, Cheshire and employs around 2,100 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 11, 2018 02:00 ET (06:00 GMT)