50p -where dos it say that1 Sep 2013 15:28
Recovery in the housing market is good news for Norcros, which supplies tiles, showers and other bathroom fittings to builders’ merchants and major store groups such as Homebase.
The company has performed valiantly during the downturn, but it should make significant progress as the economy strengthens and the shares, at 16.75p, should gain ground.
Norcros owns three brands: Triton showers, Johnson Tiles and Vado bathroom accessories. Its customers range from luxury hotel groups to B&Q, Homebase and Wickes, as well as Plumb Center and even Amazon.
Quality: Norcros acquired Vado, a firm specialising in showers and other products used at the Savoy
Quality: Norcros acquired Vado, a firm specialising in showers and other products used at the Savoy
Most people change their bathrooms or install new tiles shortly after moving home, so Norcros tends to perform at its best when the housing market is booming and plenty of people are moving. This has not been the case for years.
In fact, UK sales of showers and tiles have fallen between 25 and 30 per cent since their peak in 2006. The slump hit Norcros initially but the company took decisive action and sales and profits have grown annually for the past four years.
More...
MIDAS UPDATE: Raven Russia proves a red star tip
Norcros shares: Check the latest prices, fundamentals and broker views
DIY share dealing: Cheap flat fee service for £12.50 with cheap dividend reinvesting
A major competitor in the tiles market went out of business, boosting Johnson’s market share, and Triton has also benefited because it is the market leader in electric showers, which are cheaper than those fed by a boiler and tend to be replaced more often.
Norcros has also been conservatively managed, not least because its chief executive, Nick Kelsall, used to be the finance director, so he is keenly aware of the need to run a tight ship when times are tough.
Last year, however, Kelsall boldly set out a strategy for growth, telling investors that he intended to double sales by 2018 and increase overseas revenues to 50 per cent of group turnover.
Earlier this year, as part of the expansion plan, Norcros acquired Vado, a company specialising in taps, high-quality showers and other bathroom fittings.
The deal increases the Norcros product range, gives it more exposure to the building trade and broadens its geographic coverage, as Vado exports more than 40 per cent of its wares.
Strategy: Norcros chief executive Nick Kelsall
Strategy: Norcros chief executive Nick Kelsall
Its products have been used in hotels ranging from London’s Savoy to the Raffles Dubai. The business is strong across the Middle East, which complements Norcros, as it sells Johnson tiles in the region, too.
Even through the downturn, Norcros invested in its operations, making its production line more efficient and developing new products, such as tiles that look like natural stone and slate but cost a fraction of the p
Sign In
Follow the stocks
