Last checked at 3 Mar 2021 07:00
3 March 2021
Trading Update
Norcros plc ("Norcros" or the "Group"), a market leading supplier of high quality and innovative bathroom and kitchen products, is today providing a trading update for the ten month period ended 7 February 2021.
FY21 upgrade: strong trading momentum continues
The strong recovery we experienced in the second quarter has improved markedly with revenue in the four months from the half year to 7 February 2021, 117% of the prior year on a like for like constant currency basis. This sustained momentum continues to reflect share gains as the Group's leading market positions also benefit from the increased activity levels in the repair, maintenance, and improvement (RMI) segments in the UK and South Africa. Private new housebuild activity in the UK also continues to remain robust and an important element of this outperformance.
| Revenue % of prior year | |||
H1 (LFL2) | Q2 (LFL2) | 4 months to 7 Feb (LFL2) | 10 months to 7 Feb | |
UK | 84% | 104% | 115% | 96% |
South Africa | 66% | 87% | 113% | 83% |
South Africa (at CC1) | 79% | 106% | 122% | 95% |
Group | 78% | 98% | 114% | 92% |
Group (at CC1) | 83% | 105% | 117% | 96% |
1CC refers to constant currency basis
2LFL (like for like) adjusts prior year revenue for period pro-rating of number of weeks
Our UK business has performed strongly in the four months since the half year ended 30 September 2020, with revenue at 115% of the prior year on a like for like basis. This is a particularly resilient performance against the backdrop of COVID-19 lockdowns and considerable supply chain disruption in the period. All businesses traded well in the period particularly Triton and Merlyn who continued to take market share, benefiting from their leading brands, supply chain infrastructure and stock availability.
Our South African business also performed strongly, particularly Tile Africa which has continued to experience significant revenue growth in the retail renovation market. Revenue for the four months since the half year was 122% of prior year on a like for like constant currency basis.
Strong balance sheet and financial position
This robust trading performance and continued operational focus has reduced Group net debt (pre-IFRS 16) further since the half year to circa £5.7m at 7 February 2021 compared to £36.4m at the start of the financial year. The Group is in a strong financial position with significant liquidity and funding headroom and against all its banking covenants.
Dividend
The Board recognises the importance of dividends and will, based on the Group's financial position and subject to the continued strong momentum in trading performance, be recommending a final dividend for the year ending 31 March 2021.
Outlook
Norcros continues to win share in its two main geographical markets, reflecting the Group's strong competitive and financial position. The Board remains confident that the Group's leading market positions, established brands, broad distribution channels and experienced management team will deliver further growth, notwithstanding that economic conditions are likely to remain uncertain as our main markets continue to adjust to the impact of the pandemic. Consequently, it is now expected that reported underlying profit for the year to 31 March 2021 will be no less than £28m on a post-IFRS 16 basis and ahead of current market expectations of circa £25m.
The Group's next scheduled trading update will be on 15 April 2021.
Enquiries
Norcros plc | Tel: 01625 547700 |
Nick Kelsall, Chief Executive Officer |
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Shaun Smith, Chief Financial Officer |
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Hudson Sandler | Tel: 0207 796 4133 |
Nick Lyon |
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Notes to Editors
Norcros is a market leading supplier of high quality and innovative bathroom and kitchen products with operations primarily in the UK and South Africa.
· Based in the UK, Norcros operates under seven brands:
· Triton - Market leader in the manufacture and marketing of showers in the UK
· Merlyn - The UK and Ireland's No.1 supplier of shower enclosures and trays to the residential, commercial and hospitality sectors
· Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom accessories and valves
· Croydex - A market-leading, innovative designer, manufacturer and distributor of high quality bathroom furnishings and accessories
· Abode - A leading niche designer and distributor of high quality kitchen taps, bathroom taps, and kitchen sinks
· Johnson Tiles - The leading manufacturer and supplier of ceramic tiles in the UK
· Norcros Adhesives - Manufacturer of tile and stone adhesives, grouts and related products
· Based in South Africa, Norcros operates under four brands:
· Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitaryware, showers and adhesives
· Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles
· TAL - The leading manufacturer of ceramic and building adhesives
· House of Plumbing - Market leading supplier of specialist plumbing materials
· Norcros is headquartered in Wilmslow, Cheshire and employs around 2,000 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com