Norcros PLC Trading Update (0124P)

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RNS Number : 0124P

Norcros PLC

14 October 2021

14 October 2021

Trading Update

Norcros plc ("Norcros" or the "Group"), a market leading supplier of high quality and innovative bathroom and kitchen products, will announce its interim results for the 26-week period ended 3 October 2021 on 11 November 2021. In advance of this, the Group is providing the following trading update.

Trading

The Group's outperformance of the market experienced in the second half of the prior year has continued in the first half of this year, reflecting both increased activity in the UK and SA RMI markets and the strength of our customer proposition.

Group revenue for the 26 week period is expected to be approximately GBP200m (2020: GBP135.3m; 2019: GBP181.2m), 49% higher on a reported basis than the COVID-19 impacted prior year (2020) and 18% higher than 2019 on a constant currency like for like basis.

 
                      H1 LFL(2) revenue 
                         increase on 
                        2020 2019 
                    -------------------- 
 UK                    40%        18% 
                    ---------  --------- 
 South Africa          69%        11% 
                    ---------  --------- 
 South Africa (at 
  CC(1) )              53%        20% 
                    ---------  --------- 
 Group                 49%        15% 
                    ---------  --------- 
 G roup (at CC(1) 
  )                    44%        18% 
                    ---------  --------- 
 

Our UK business has continued to perform strongly, with revenue for the 26 week period 18% higher than in 2019 on a like for like basis reflecting increased demand in the RMI sector and market share gains, with Triton and Merlyn continuing to perform extremely well.

Our South African business has also continued to outperform, with revenue for the 26 week period 20% higher than in 2019 on a constant currency like for like basis, with Tile Africa continuing to benefit from higher demand and market share gains in the retail renovation market.

Financial Position

The balance sheet remains very strong with net cash of approximately GBP1.0m (pre-IFRS16) compared to net cash of GBP10.5m as at 31 March 2021. During the period the Group has replenished inventory levels and paid the prior year declared dividend.

Outlook and FY22 Upgrade

Our market outperformance in the first half of this financial year reflects the strength of our focussed operating model, our market leading brands, broad distribution channels, well-developed supply chain infrastructure and stock availability. The strength of our leading customer proposition has resulted in an excellent performance, and we expect to report an underlying operating profit in the first half of the year of no less than GBP21m (2020: GBP12.8m, 2019 GBP17.4m).

As previously referenced, 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 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.

(1.) CC refers to constant currency basis

(2.) LFL (like for like) adjusts 2019 revenue from a 27 to a 26 week period pro-rating

Enquiries

 
 Norcros plc                     Tel: [phone] 
 Nick Kelsall, Chief Executive 
  Officer 
 James Eyre, Chief Financial 
  Officer 
 
 Hudson Sandler                  Tel: [phone] 
 Nick Lyon 
  Sophie Miles 
 
 

Notes to Editors

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

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

   --       Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles 
   --       TAL - The leading manufacturer of ceramic and building adhesives 
   --       House of Plumbing - Market leading supplier of specialist plumbing materials 

-- Norcros is headquartered in Wilmslow, Cheshire and employs around 2,000 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 14, 2021 02:00 ET (06:00 GMT)