Trading Update

RNS Number : 5109V

Norcros PLC

15 April 2021

 

15 April 2021 

Trading Update

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 2021¹ on 10 June 2021. In advance of this, the Group is providing the following trading update.

Further upgrade: strong finish to year

In our 31 March 2021 trading update we increased our full year profit guidance, reflecting the strong trading momentum within the business. We have continued to outperform our previous expectations in March and ended the year strongly. As a result, the Board now expects underlying operating profit for the year to 31 March 2021¹ to be no less than £33m on a post-IFRS 16 basis, ahead of both our previous underlying operating profit guidance for the year of no less than £31m and the £32.3m reported last year.  

Group revenue for the year is expected to be in the region of £324m (2020: £342m), 95% of prior year on a reported basis and 101% of prior year on a constant currency like for like basis² after adjusting the prior year for period pro-rating (53 weeks versus 52).

The Group has seen a strong recovery in the second half with revenue 120% of the prior year on a constant currency like for like basis² compared to 83% in the first half of the year which was severely impacted by the COVID-19 pandemic, particularly in the first quarter.

	Revenue % of prior year
	Reported FY	LFL2   H1  H2  FY
UK	98%	84%	115%	100%
South Africa	89%	66%	123%	91%
South Africa (at CC3)	102%	79%	130%	103%
Group	95%	78%	118%	97%
G roup (at CC3)	99%	83%	120%	101%

Our UK business has continued to perform strongly with revenue for the second half at 115% of prior year on a like for like basis² reflecting the increased activity in the r epair, maintenance, and improvement (RMI) sector. Triton and Merlyn have both performed extremely well, gaining market share.

Our South African business also continued to outperform, revenue for the second half was 123% higher on a like for like basis^---------2 and 130% of prior year on a constant currency like for like basis² with further growth, particularly in Tile Africa, reflecting market share gains in the retail renovation market.

Robust balance sheet and financial position

Due to the strong recovery in trading during the second half of the year and the effective management of working capital, we expect to end the year at 31 March 2021¹ with net cash of circa £10m (on a pre-IFRS16 basis) compared to net debt of £36.4m at 31 March 2020.

Employees

It has been more than a year since the first lockdown and the Board wishes to place on record its thanks to our employees for their commitment and contribution in ensuring a safe workplace and to this strong outperformance in this unprecedented year. Whilst the progress of the COVID-19 vaccination programme is encouraging, our priority continues to be the safety and wellbeing of our people. 

Nick Kelsall, Group Chief Executive, said:

"The Group has recovered very strongly from a period of unprecedented uncertainty. Our performance on all fronts is a testament to our business model and our employees, particularly against the backdrop of challenging markets as demand adjusts to the impact of the pandemic and Brexit. It is particularly pleasing to see how well our businesses both in the UK and South Africa responded, taking advantage of the growth opportunities in the RMI segments and continuing to gain market share, benefitting from their leading brands, supply chain infrastructure and stock availability. 

Whilst market conditions are likely to remain challenging, the Board is confident that the  Group's highly experienced management teams, resilient business model, increased financial strength and our focussed growth strategy will continue to drive outperformance leading to further progress in the year ahead."

^1. The accounting reference 'year to 31 March 2021' relates to the 52-week accounting period commencing on 6 April 2020 and ending 4 April 2021

^2. LFL (like for like) adjusts prior year revenue for 53 to 52 week period pro-rating

^3. CC refers to constant currency basis  

Enquiries

Norcros plc	Tel: [phone]
Nick Kelsall, Chief Executive Officer
Shaun Smith, Chief Financial Officer
Hudson Sandler	Tel: [phone]
Nick Lyon Sophie Miles

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

 

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