Shares in Norcros experienced a modest increase this morning after the bathroom and kitchen supplier demonstrated resilient trade despite a slowdown in the home improvement market. Analysts at Shore Capital assigned a ‘Buy’ rating to the stock following the London-listed firm’s announcement of a slightly better-than-expected profit for the period.
Operating profit for the year ending March was reported at £39.9 million, reflecting a 45 percent increase from the previous year. However, revenue fell by 11 percent to £392.1 million, largely due to challenging market conditions, including power interruptions in South Africa during the first half of the year. In the UK and Ireland, the company recorded an underlying profit of £38.4 million, an increase of over £1 million from the previous year.
Thomas Willcocks, the chief executive, expressed his satisfaction with the company’s performance during this period and his excitement about the significant opportunities in the more resilient mid-premium market segments where Norcros holds leading positions. He emphasised that the company’s strategy is built on strength and scale, actively leveraging customer and operational synergies within the group.
The firm has maintained its guidance for the year. Despite the challenges faced by home retailers as consumers tighten their budgets, shares in Norcros have surged 13 percent year-to-date. Analysts at Shore Capital noted that Norcros’s UK businesses displayed resilience with like-for-like sales down by 3.3 percent. They believe this is a better outcome than most listed peers and the overall market, attributing it to Norcros’s positioning in the more resilient mid-premium segment of the repair, maintenance, and improvement market.
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.
