(Alliance News) - Norcros PLC said Thursday it expects underlying profitability for its financial year to March 31 to be below market expectations, albeit ahead of last year, as coronavirus affects its China-based suppliers.
Norcros shares were trading 13% lower in London at 252.04 pence each on Thursday.
The UK and South African kitchen and bathroom products supplier said the coronavirus has had little short-term impact to date, as UK based stock levels have been sufficient to satisfy demand.
But slower production at its China-based suppliers is "likely to have some impact on the seasonally important remainder of this financial year and early next year".
"The situation however remains fluid and is being closely monitored and actively managed," the company noted.
Norcros said it has continued to win market share in its major markets despite conditions remaining challenging since mid-November.
In the UK, the company said that overall year-on-year revenue growth in the second half was similar to what was achieved in the first half, "albeit with our export performance remaining subdued". First half UK revenue was GBP115.6 million.
Meanwhile in South Africa, the House of Plumbing business continues to trade in line with expectations. Norcros said it anticipates its combined South African business to generate underlying profitability "marginally ahead" of the year before.
As a result, the company now expects that underlying profitability for the financial year to March 31 will be below market expectations, albeit ahead of last year.
In financial 2019, Norcros reported revenue of GBP331.0 million. Revenue from the UK was GBP228.1 million, while South Africa revenue was GBP102.9.
For the six months to the end of September 2019 pretax profit was GBP13.3 million, while revenue was GBP181.2 million.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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Norcros (NXR)