TIDMNXR
RNS Number : 1253C
Norcros PLC
15 October 2020
15 October 2020
Trading Update
Norcros plc ("Norcros" or the "Group"), a market leading
supplier of high quality and innovative bathroom and kitchen
products, will announce its interim results for the 26-week period
ended 4 October 2020 on 12 November 2020. In advance of this, the
Group is providing the following trading update.
Trading
Since the AGM update in July, the strong trading momentum has
continued with a marked recovery in demand in the second quarter in
both the UK and South African businesses. This has resulted in the
Group delivering a sustained level of profitability in the second
quarter combined with excellent cash generation as our pre COVID-19
inventory levels continued to satisfy customer demand. Group
revenue for the second quarter (13 weeks: 2019 14 weeks) is
expected to be 105% of prior year on a constant currency like for
like (2) basis reflecting market share gains in our major
channels.
Group revenue for the 26-week first half (2019: 27 weeks) is
expected to be approximately GBP135.3m (2019: GBP181.2m), 75% of
prior year revenue on a reported basis, 80% on a constant currency
basis and 83% on a constant currency like for like(2) basis.
Revenue % of prior year
First Second Quarter Second Quarter Half Half
Quarter (LFL(2) Year Year
) (LFL(2)
)
--------- --------------- --------------- ------ ---------
UK 62% 96% 104% 81% 84%
--------- --------------- --------------- ------ ---------
South Africa 42% 81% 87% 63% 66%
--------- --------------- --------------- ------ ---------
South Africa
(at CC(1) ) 50% 99% 106% 76% 79%
--------- --------------- --------------- ------ ---------
Group 55% 91% 98% 75% 78%
--------- --------------- --------------- ------ ---------
Group (at CC(1)
) 58% 97% 105% 80% 83%
--------- --------------- --------------- ------ ---------
(1) CC refers to constant currency basis
(2) LFL (like for like) adjusts prior year revenue for 27 to 26
week period pro-rating
Our UK business has continued to perform strongly and we expect
to report H1 revenue of approximately GBP93.7m (2019: GBP115.6m),
with second quarter revenue at 104% and half year revenue at 84% on
a like for like(2) basis. Merlyn, Triton and Vado experienced a
marked recovery in the second quarter with revenue ahead of prior
year on a like for like(2) basis benefiting from their leading
market positions, stock availability and superior service.
Our South African business also continued to make good progress
and we expect to report H1 revenue of approximately GBP41.6m (2019:
GBP65.6m), with second quarter revenue at 106% and half year
revenue at 79% of the same period last year on a constant currency
like for like(2) basis. The performance reflects a strong recovery
in the Tile Africa business in the retail renovation market.
Financial Performance and Position
Reflecting the strong recovery in trading in the second quarter
and the decisive actions taken to deal with the unprecedented
impact of COVID-19 it is pleasing that the Group is expected to
report a pre-IFRS 16 underlying operating profit of approximately
GBP12m for the first half (2019: GBP17.1m), underlining the
resilience of the Group's business model, the strength of its
market leading positions and its well established supply
chains.
As a result of the strong recovery in trading and the continued
focus on cost alignment and cash preservation it is expected that
Group net debt will have reduced to circa GBP8.0m at the half year
(2019: GBP41.1m). This is a significant reduction on the GBP36.4m
reported at the year end and in leverage with Net Debt: LTM EBITDA
of approximately 0.2 times compared to 0.9 times at the year
end.
Dividend
The Board recognises the importance of dividends but does not
expect to declare an interim dividend when it publishes its results
on 12 November 2020. However, the Board will consider recommending
a final dividend for the full year subject to the Group's continued
strong trading performance, financial position and outlook.
Outlook
Our businesses have adapted swiftly to ensure that they operate
safely and cost effectively and have recovered strongly from the
initial impact of the pandemic. Notwithstanding the ongoing
uncertainty as governments seek to control COVID-19, Norcros
continues to be in a very strong competitive and financial
position. Given this, its leading market positions, established
brands, broad distribution channels and experienced management team
the Group remains well positioned to sustain the strong progress
and recovery of the second quarter.
Enquiries
Norcros plc Tel: 01625 547700
Nick Kelsall, Group Chief Executive
Shaun Smith, Group Finance Director
Hudson Sandler Tel: 0207 796 4133
Nick Lyon
Molly Streeton
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 & 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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END
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