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.
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Revenue
versus prior year
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Reported
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LFL3
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UK
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(4.7%)
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(3.3%)
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South Africa
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(24.1%)
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(24.1%)
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South Africa at CC
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(12.3%)
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(12.3%)
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Group
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(11.1%)
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(10.4%)
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Group at CC
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(7.0%)
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(6.1%)
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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
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Norcros plc
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Tel: 01625 547700
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Thomas Willcocks, Chief Executive
Officer
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James Eyre, Chief Financial
Officer
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Hudson Sandler
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Tel: 0207 796 4133
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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