Interim Management Statement

RNS Number : 9890J

Norcros PLC

24 July 2013

 



24 July 2013

("Norcros", the "Group" or the "Company")

Interim Management Statement

Norcros, the market leading supplier of innovative branded showers, taps, bathroom accessories, tiles and adhesives, publishes its Interim Management Statement covering the 13 week period to 30 June 2013 ahead of its Annual General Meeting to be held today at 11.00am at Ladyfield House, Station Road, Wilmslow, Cheshire, SK9 1BU.

Trading

Group revenue for the 13 week period was 14.4% higher on a constant currency basis compared to the same period last year and 9.1% higher in Sterling reflecting a weaker South African Rand. On a like for like basis excluding Vado, which was acquired on 31 March 2013, Group revenue for the period was 0.7% lower on a constant currency basis, and 5.3% lower in Sterling.

Market conditions remain challenging in the UK, and whilst the trade sector has been resilient, the retail sector has been weaker, particularly in April and May, reflecting the unseasonably cold weather and destocking by a number of key customers. UK revenue for the 13 week period was 15.1% higher on a reported basis but 9.9% lower than the same period last year on a like for like basis excluding Vado.

Revenue at Triton in May and June combined was in line with the same period last year, but was impacted by significant destocking in a number of its key UK retail customers in April, resulting in revenue 11.3% lower for the period. UK revenue for the period was 13.8% lower due to this significant destocking, but within this the trade sector performed well with revenue 1.0% higher. Export revenue, which is predominantly derived from Ireland and accounts for 15% of overall Triton revenue, was 5.4% higher in the period.

Revenue at Johnson Tiles was 10.7% lower for the 13 week period. Last year comparatives included the benefit of the significant pipeline fill for the B&Q tile range review. UK trade revenue was broadly in line with last year which was an improvement in performance compared with previous trends. UK retail revenue declined 22.5% reflecting both weaker sales out and destocking by a number of key customers. Export revenue was 45.8% higher than last year with new projects coming on stream in the Middle East.

As previously announced, action has been taken to reduce costs in Johnson Tiles UK which is progressing to plan. The majority of the benefits from these initiatives will be realised in the second half, and will therefore weight profitability towards the second half compared to historical phasing for both Johnson Tiles UK and the Group.

Vado, our newly acquired taps, mixer showers and bathroom accessories business has maintained its strong momentum in its first three months under Norcros ownership, and has performed to expectations with revenue 9.3% ahead of last year. The integration of the business and the development of Group revenue synergies are also progressing to plan. 

Our South African business grew revenue on a constant currency basis for the 13 week period by 13.9%. A weaker Rand compared to last year meant reported Sterling revenues were 0.4% lower for the same period. This performance is driven by the continued success of our strategy to gain share in the South African DIY sector and in sub-Saharan export markets.

Outlook

Our South African business continues to make progress despite the weaker Rand, delivering double digit constant currency revenue growth. The outlook for the UK housing sector is improving and should lead to increased activity in our markets. Whilst short term destocking in the retail sector has impacted performance in the first quarter, there are some early signs of improving trends in our UK trade sector performance in the quarter. Even though the second half weighting of cost reduction benefits in Johnson Tiles UK will mean that profitability will be more heavily weighted to the second half than normal, the Board remains confident of the outcome for the full year.

ENQUIRIES:

Norcros plc	Tel: [phone]
Nick Kelsall, Group Chief Executive
Martin Payne, Group Finance Director
Hudson Sandler	Tel: [phone]
Nick Lyon
Charlie Jack
Katie Matthews

Notes to Editors

·      Norcros is a leading supplier of high quality and innovative showers, taps, bathroom accessories, ceramic wall and floor tiles and adhesive products with operations primarily in the UK and South Africa.

·      Based in the UK, Norcros operates under four brands:

·     Triton Showers - Market leader in the manufacture and marketing of showers in the UK

·     Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom accessories and valves

·     Johnson Tiles - A leading manufacturer and supplier of ceramic tiles in the UK

·     Norcros Adhesives - Manufacturer of tile & stone adhesives, grouts and related products

·      Based in South Africa, Norcros operates under three brands:

·    Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitary ware, showers and adhesives

·    Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles

·    TAL - The leading manufacturer of ceramic and building adhesives

·      Norcros is headquartered in Wilmslow, Cheshire and employs around 1750 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com/

 

END

 

 

IMSEAKXDAAADEFF