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10 Oct 2024 07:00
10 October 2024
Trading update
Norcros plc, the market leading designer and supplier of high quality sustainable bathroom and kitchen products, will announce its Interim Results for the 26 weeks to 29 September 2024 on 21 November 2024. In advance of this, the Group is pleased to provide the following trading update.
Resilient trading performance with profit in line with market expectations
The Group's performance in H1 has continued to demonstrate the strength of our market leading brands and market positions in a challenging demand environment.
Our in-house product design and development capabilities, excellent customer service and the ongoing implementation of our strategy have ensured that we continue to grow market share and are well placed to capitalise on our position as the market recovers.
Group revenue for the 26-week period is expected to be in line with the previous year on a constant currency (CC) LFL1 basis. Reported revenue is expected to be 7% lower than the previous year at approximately £188 million (2023: £201.6 million). Underlying operating profit is expected to be at least £19.5 million (2023: £21.4 million) in the first half of the year.
| H1 revenue versus prior year | |
LFL | Reported | |
UK | 1% | (9%) |
South Africa | (1%) | (1%) |
South Africa at CC2 | (2%) | (2%) |
Group | 0% | (7%) |
Group at CC | 0% | (7%) |
In our UK business, LFL revenue for the first half was 1% higher than the prior year, with market share gains driven by continued new product development and cross selling programmes. Reported revenue was 9% lower than the previous year largely due to the sale of Johnson Tiles UK which completed in May this year. During the period we successfully completed the consolidation of the warehousing and distribution functions at both Grant Westfield and Vado. One off cash cost, associated with this investment of circa £2 million will be reported separately as an exceptional item.
In our South African business, revenue for the first half was 1% lower than the prior year on a reported basis and 2% lower on a CC basis. Encouragingly, there have been no electricity supply interruptions in the last four months, however, consumer sentiment is yet to improve and therefore trading conditions remain challenging.
Financial position
The Group remains in a strong financial position with net debt (on a pre-IFRS 16 basis) at 29 September 2024 expected to be circa £45 million (net debt of £46.6 million as at 30 September 2023 and £37.3 million as at 31 March 2024) reflecting a normal seasonal cashflow trend. This represents leverage of approximately 1.0x underlying EBITDA and provides a solid foundation from which the Group can further execute its strategic priorities.
Outlook
The Board remains confident that our market leading positions and strategy implementation will continue to deliver market share gains for the year ending 31 March 2025. Despite the ongoing challenging market conditions, the Board expects full year underlying operating profit to be in line with market expectations3 and to show further progress towards our medium-term targets.
1. LFL (like for like) adjusted for Johnson Tiles UK and Norcros Adhesives
2. CC refers to constant currency basis
3. Norcros compiled market consensus for the year to 31 March 2025 is for an underlying operating profit of £43.2 million
Enquiries
Norcros plc | Tel: 01625 547700 |
Thomas Willcocks, Chief Executive Officer | |
James Eyre, Chief Financial Officer | |
Hudson Sandler | Tel: 0207 796 4133 |
Nick Lyon Lucy Wollam-Coles | |
Notes to Editors
Norcros is a market leading group of brands specialising in design led, sustainable bathroom and kitchen products across the UK, Ireland, South Africa, and select export markets. Each of our brands offers mid-premium product ranges distinguished by their innovation, design, and commitment to sustainability, all backed by industry leading service to our trade and retail customers.
Through a strategic blend of acquisitions and organic growth, Norcros has become the UK and Ireland's number one bathroom products group. We see significant potential for further expansion within this large and fragmented market, accelerating growth and capturing market share through continued acquisitions, organic development, operational excellence, and meaningful ESG capabilities.
Norcros encompasses the renowned brands, Triton, Merlyn, Grant Westfield, Vado, Croydex, and Abode in the UK, and Tile Africa, TAL, Johnson Tiles South Africa, and House of Plumbing in South Africa.
Norcros is headquartered in Wilmslow, Cheshire and employs around 2,100 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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