Annual results for Norcros, the Wilmslow-based bathroom and kitchen supplies group, were pretty much on target, as revealed today. A trading update in April estimated the final figures for the year to March 31, 2024, and today’s announcement reflected those estimates. Revenues dropped 11.1% to £392.1m, underlying operating profit fell 8.7% to £43.2m, and underlying net debt improved by 25.3% to £37.3m. However, pre-tax profits rose significantly from £21.7m in 2023 to £32.6m. The total dividend per share remains at 10.2p.
During the period, the group extended its multicurrency revolving credit facility by a further year. It has committed banking facilities of £130m, plus a £70m uncommitted accordion, with a maturity date of October 2027.
Norcros operates under seven brands: Triton, Merlyn, Multipanel (Grant Westfield), Vado, Croydex, Abode, and Johnson Tiles, employing around 2,400 people. Last month, post-reporting period, the business sold its Stoke-on-Trent-based subsidiary, Johnson Tiles UK, for £1m to its UK management team, resulting in the loss of 100 jobs. The business reported delivering a ‘robust performance in a challenging environment’.
The UK and Ireland operations achieved a record underlying profit of £38.4m (2023: £37.2m) and an underlying operating profit margin of 13.6% (2023: 12.6%). There was a gradual market recovery in South Africa following significant energy interruptions, and the group indicated it is well-placed to gain market share there.
Today’s announcement also revealed the group’s medium-term strategic targets, which include organic growth at two to three per cent above the market, a group underlying operating profit margin to reach 15%, cash conversion greater than 90%, return on capital employed greater than 20%, and delivery of SBTi-validated science-based emissions targets by 2028.
Trading in the current financial year showed that group revenue in the two months to the end of May 2024 was 2.2% ahead on a constant currency like-for-like basis, although group revenue was 2.9% below the prior year comparator on a reported basis. Norcros stated that although market conditions are likely to remain uncertain, the group continues to make further strategic progress, and the board’s expectations for FY25 remain unchanged.
CEO Thomas Willcocks welcomed the FY24 performance, saying he is excited by the significant opportunities in the more resilient mid-premium market segments where the group holds leading positions. He highlighted that their strategy is building from a position of strength and scale, as they actively leverage customer and operational synergies within the group.
Norcros plc (LON:NXR) is a leading B2B producer of branded bathroom and kitchen products for its UK, South African and selected export markets. The portfolio of eleven operating companies (7 UK, 4 South Africa) is characterised by strong individual brands, together providing product breadth and channel diversity from a strong supply chain base.
