Norcros Regulatory News (NXR)

27 Mar 2009 07:07



Norcros plc

Pre-close Trading Update

Norcros, the home consumer products group, issues the following update for the year ending 31st March 2009 in advance of the preliminary results announcement.

Overall, we expect to report Group trading profit in the region of £6.5m (2008:£16.0m). Profit before tax and exceptional items will be impacted by our equity share of the losses in our Greek associate business and a fair value adjustment in respect of interest rate swaps and is expected to be in the region of £3.0m (2008:£13.0m). We also expect to report exceptional charges of approximately £3.4m to reflect the cost reduction and restructuring programmes already announced and largely implemented throughout the Group, and approximately £4.0m reflecting an increase in the provision for onerous property leases, partly offset by an exceptional gain of £1.3m on the sale of the Group's investment in H&R Johnson (India) Ltd.

The closing net debt position is anticipated to be in the region of £48.0m (2008:£46.5m). We have agreed with our Banking Group an amendment and reset to our covenants for the 31st March 2009 test date and are engaged in discussions to agree an amendment and restatement of the terms of the £80m facility which is due to expire in July 2012. The Board is confident of concluding an agreement with the Banking Group ahead of our preliminary results announcement.

We have made good progress in our cost reduction programmes in all our businesses and expect to realise annualised savings in the region of approximately £4.0m. Our UK operations continue to more than hold their own in current markets and the issues in our South African operations are being decisively addressed following senior management changes and the closure of the inefficient wall tile facility. We remain confident that our shower, adhesive and tile brands are well positioned to take advantage of any market opportunities.

27 March 2009

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