11 April 2024
Trading update - Underlying operating profit in line with expectations
Norcros plc ("Norcros" or the "Group"), a market-leading designer and supplier of high quality bathroom and kitchen products in the UK, Europe and South African markets will announce its full year results for the year ended 31 March 20241 on 13 June 2024. In advance of this, the Group is pleased to provide the following trading update.
Trading
The Group has continued to demonstrate the strength of its business in a challenging demand environment, and the Board expects underlying operating profit for the year ended 31 March 2024 to be in line with market expectations2.
Overall Group revenue for the year ended 31 March 2024 is expected to be circa £390 million (2023: £441.0 million), 11.1% below prior year on a reported basis and 6.1% below on a constant currency ("CC") like for like ("LFL3") basis.
| | Revenue versus prior year | |
| | Reported | LFL3 |
| UK | (4.7%) | (3.3%) |
| South Africa | (24.1%) | (24.1%) |
| South Africa at CC | (12.3%) | (12.3%) |
| Group | (11.1%) | (10.4%) |
| Group at CC | (7.0%) | (6.1%) |
Our market-leading UK business has performed robustly, with revenue 3.3% below prior year on a LFL basis with year on year improvement in operating margins. This improvement has been driven by ongoing portfolio management, our proven new product development programme and our positioning within the more resilient mid-premium segment of the RMI market.
Our South African business performed resiliently, despite the challenging market conditions aggravated by the significant and unpredictable power interruptions in H1. Reported revenue for the year was 12.3% lower than prior year on a CC basis. The local management team has implemented proactive self-help initiatives and, notwithstanding improved power availability, we expect the recovery in demand to be gradual.
Financial position and extension of banking facilities
The Group remains in a strong financial position, maintaining its historically high levels of cash generation, with net debt (on a pre-IFRS 16 basis) at 31 March 2024 expected to be circa £37 million (2023: net debt of £49.9 million). This represents leverage of less than 0.9x underlying EBITDA and provides a solid foundation from which the Group can execute its strategic priorities.
Net Zero targets - SBTi approved
We are pleased to announce that the Group's targets for Near Term and Net Zero emission targets have been validated and approved by the Science Based Targets initiative ("SBTi") and we continue to make progress to reduce our emissions. Our approved targets are listed on the Science Based Targets website: https://sciencebasedtargets.org/companies-taking-action
Notice of results and capital markets event
The Group will announce its full year results for the year ended 31 March 2024 on Thursday 13 June 2024. Ahead of this, there will be a Capital Markets Event on Wednesday 1 May 2024. For further details please contact norcros@hudsonsandler.com.
Thomas Willcocks, Chief Executive Officer, said:
"Norcros has again demonstrated the strength of its business and leading positions in its end markets, delivering solid results notwithstanding the macroeconomic challenges. The Group's focus on continuing portfolio management, our collective organic growth accelerators and scale-based operational efficiencies will continue to deliver profitable market share growth in the year ahead."
1. The accounting reference 'year to 31 March 2024' relates to the 52-week period commencing on 3 April 2023 and ending 31 March 2024
2. Norcros-compiled market consensus for the year to 31 March 2024 underlying operating profit is £42.7 million
3. LFL (like for like) adjusted for Grant Westfield (acquired 31 May 2022) and Norcros Adhesives
Enquiries
| Norcros plc | Tel: 01625 547700 |
| Thomas Willcocks, Chief Executive Officer | |
| James Eyre, Chief Financial Officer | |
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| Hudson Sandler | Tel: 0207 796 4133 |
| Nick Lyon Lucy Wollam-Coles | |
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Notes to Editors
Norcros is a market-leading designer and supplier of high quality bathroom and kitchen products in the UK, Europe and South African markets.
In the UK, Norcros operates under seven brands, Triton, Merlyn, Grant Westfield, Vado, Croydex, Abode, and Johnson Tiles.
In South Africa, Norcros operates under four brands, Tile Africa, House of Plumbing, TAL, and Johnson Tiles.
Norcros is headquartered in Wilmslow, Cheshire and employs around 2,300 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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