FY24 trading underpins Norcros’s compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Edison believe that Norcros’s key strengths are underappreciated and that legacy issues have been resolved. Its rating is low at 5.6x FY24e P/E, which is attractive, especially when compared to its yield of 5.7% on its well-covered dividend. We retain our estimates and value the shares at 246p, implying c 40% upside.
The markets addressed by Norcros were challenging throughout FY24, and as a result group revenue is expected to be down 11.1% on a reported basis to c £390m, and down 6.1% on a constant currency, like-for-like basis.
Norcros performed ‘robustly’ in the UK and saw revenue down 4.7% on a reported basis and 3.3% on a like-for-like basis.
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.
