Norcros’s FY24 results highlight its resilience in the face of tough markets. Despite the challenging environment, we maintain that the outlook is improving in both of its core markets, the UK and South Africa. While the company’s future prospects appear promising, we have decided to keep our revenue and profit forecasts unchanged, along with our 251p/share valuation post the results. The company is currently trading at an undemanding P/E rating of 6.6x. The recent capital markets day highlighted the scale of the opportunity available to Norcros.
FY24 revenue saw an 11.1% decrease, dropping to £392.1m at the headline level. However, after adjusting for the acquisition of Grant Westfield and the closure of Norcros Adhesives, like-for-like revenue on a constant currency basis was down only 6%. The underlying operating profit fell by 8.7%, reaching £43.2m, with underlying profit before tax (PBT) standing at £36.4m. Diluted underlying earnings per share (EPS) decreased by 14.2% to 32.1p. Despite these declines, the board has recommended maintaining an unchanged total dividend of 10.2p, which suggests a dividend cover exceeding three times.
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.
