13 April 2023
Norcros plc ("Norcros" or the "Group"), a market leading supplier of high quality and innovative bathroom and kitchen products, will announce its Preliminary Results for the year ended 31 March 20231 on 15 June 2023. In advance of this, the Group is providing the following trading update.
Full year trading performance - Underlying operating profit up 10% and in line with market expectations2
The Group has continued to demonstrate resilience in its business model, trading well against the challenging macroeconomic backdrop and the Board expects underlying operating profit for the year to 31 March 20231 to be at a record level and in line with market expectations2.
Group revenue for the year ended 31 March 20231 is expected to be approximately £440 million (2022: £396.3 million), 11.3% above prior year on a reported basis and 1.5% above on a constant currency "CC3" and like for like4 "LFL" basis.
Revenue increase on prior year
South Africa at CC3
Group at CC3
Our UK business has continued to perform well, with revenue at 15.2% above prior year on a reported basis and broadly in line with prior year on a LFL4 basis. Our performance demonstrated the breadth of our distribution channels, strong stock management and excellent levels of service resulting in market share gains.
Our South African business continued to perform robustly, despite market conditions being more challenging in the second half of the year, gaining share as a result of our market leading positions and stock availability. Reported revenue for the year was 3.9% higher than prior year and 4.6% higher than prior year on a constant currency basis.
Financial position and extension of banking facilities
The Group remains in a strong financial position with net debt (on a pre-IFRS 16 basis) at 31 March 20231 expected to be circa £50 million (2022: net cash of £8.6 million). The year on year movement principally reflects the acquisition of Grant Westfield.
The Group has extended its £130 million multicurrency revolving credit facility ("RCF") for a further year. The facility has a three year and seven month term to October 2026, with a further year extension available. It also includes the option for an uncommitted accordion facility of £70 million.
Norcros Adhesives - closure
It is with regret we have commenced the closure of Norcros Adhesives, a small but loss making division with the loss of 70 jobs. Norcros Adhesives represented approximately 3% of Group revenue in the year. The revenues and approximately £3 million of underlying operating losses are included in the underlying financial results for the year. In addition, costs relating to the closure of circa £5 million (of which circa £2 million represents the gross cash cost) will be separately reported as an exceptional item in the results to 31 March 20231. This represents a cash payback period of less than one year. The net impact on cash is not expected to be significant.
Notice of results
The Group will announce its full year results for the year ended 31 March 20231 on Thursday 15 June 2023.
Thomas Willcocks, Chief Executive Officer, said:
"Norcros has delivered record results, again demonstrating resilience and market share growth, notwithstanding the significant macroeconomic challenges. Whilst market conditions are likely to remain uncertain in the short term, the Board believes that the Group's proven business model, leading customer service proposition, leading brands and highly experienced management teams will continue to deliver market share growth in the year ahead.
Whilst I have been with the Group since 2006, and a member of the Executive team at Norcros since August 2021, I was delighted to join the Board from 1 April 2023 as CEO. I would like to take this opportunity, on behalf of myself and the Board, to thank Nick Kelsall for his outstanding commitment to the Group over the last thirty years. He has left the Group in an excellent position to continue growing market share in what remain fragmented and attractive markets. We wish him a long and healthy retirement."
1. The accounting reference 'year to 31 March 2023' relates to the 52-week accounting period commencing on 4 April 2022 and ending 2 April 2023
2. Norcros compiled market consensus for the year to 31 March 2023 underlying operating profit is £45.9 million
3. CC refers to constant currency basis
4. LFL excludes Grant Westfield, which was acquired on 31 May 2022
Tel: 01625 547700
Thomas Willcocks, Chief Executive Officer
James Eyre, Chief Financial Officer
Tel: 0207 796 4133
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
· Multipanel - Grant Westfield is a leading manufacturer of high-end waterproof bathroom wall panels
· 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
· 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 2,300 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com