(Alliance News) - Kitchen and bathroom supplier Norcros PLC on Wednesday said it won market share in its just-ended financial year, but added that the Covid-19 outbreak means its profit will lag behind consensus.
Norcros expects to report underlying operating profit of about GBP31 million for the year that ended on Tuesday, about 11% lower than the previous consensus forecasts of GBP35 million. This would also represent a year-on-year fall of 9.9% from GBP34.4 million.
The company added that it will decide on whether to pay a dividend once it has "a clearer view of the scale and duration of the Covid-19 impact on the business".
Norcros added: "The group has continued to win market share in its major markets despite conditions remaining challenging and up until recently remained in line to meet market expectations for this financial year. Recent government measures in both the UK and South Africa to contain the spread of the Covid-19 pandemic means that this is now no longer the case as demand in our seasonally important period 12 has slowed markedly as our customers have focussed on how they mitigate the risks of Covid-19."
The company said the lockdown in South Africa has "mothballed" its operations, and trading has ceased. The measures there came into effect early Friday last week.
"In the UK, we have been in active discussions with our customers to better understand how they are planning to trade during the coming weeks following the recently introduced government measures. It is now evident that the majority have temporarily closed their main outlets except for products which are deemed essential and sold through their click and collect operations. Trading is therefore minimal. Consequently, we have suspended our main manufacturing and assembly operations in the UK in a controlled way to safeguard our workforce and to ensure an efficient resumption at the appropriate time," Norcros added.
Norcros noted it has access to GBP120 million in committed financing from a revolving credit facility, plus GBP30 million from an accordion facility. These mature in November 2022.
Shares in the company were 0.8% higher at 126.50 pence each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Norcros (NXR)