TIDMNXR
RNS Number : 4911K
Norcros PLC
11 April 2018
11 April 2018
("Norcros", the "Group" or the "Company")
Trading Update
Norcros, the market leading supplier of innovative branded
showers, shower enclosures and trays, taps, bathroom accessories,
tiles and adhesives will announce its preliminary results for the
year ended 31 March 2018 on 13 June 2018. In advance of this, the
Group is providing the following trading update.
Trading
Group underlying operating profit(1) for the year is expected to
be in line with the Board's expectations.
Group revenue for the year is expected to be in the region of
GBP300m (2017: GBP271.2m), 10.7% higher than the prior year on a
reported basis, 8.7% higher on a constant currency basis, and 4.4%
higher on a constant currency like for like basis(2) .
Reported Constant Constant Currency LFL(2)
Currency
FY FY H1 H2 FY
--------------
UK +10.0% +10.0% +8.5% -0.8% +3.6%
--------- ---------- --------- -------- --------
South Africa +12.0% +6.0% +4.8% +7.2% +6.0%
--------- ---------- --------- -------- --------
Group +10.7% +8.7% +7.2% +1.8% +4.4%
--------- ---------- --------- -------- --------
UK revenue for the year was 10.0% higher than the prior year
reflecting in part the first time contribution from Merlyn which
was acquired on 23 November 2017. Merlyn has been seamlessly
integrated into the Group and performed in line with the Board's
expectations. On a like for like basis(2) , UK revenue was 3.6%
higher than the prior year. Second half UK LFL revenue declined by
0.8% compared to the 8.5% growth seen in the first half. This was
largely due to lower retail revenues at Johnson Tiles and a tough
comparative period last year. Johnson Tiles apart, H2 UK LFL
revenue was 8.4% higher (H1 +11.4%).
Our South African business again delivered strong revenue growth
despite a challenging market environment, 6.0% higher than the
prior year on a constant currency basis and 12.0% higher on a
reported basis, continuing the sustained progress of recent
years.
Reorganisation - Johnson Tiles UK
In 2017 we implemented a restructuring at Johnson Tiles UK
designed to improve its operating performance and increase
manufacturing flexibility. Notwithstanding the benefits of this
restructuring the business remains loss making as market conditions
experienced in the second half proved more challenging than
expected. As a result, the Board has implemented a further
restructuring programme which will involve the loss of up to 50
jobs. This will result in a charge of around GBP2.1m, to be treated
as an exceptional item and recognised in the financial year ended
31 March 2018 with the subsequent cash outflow occurring in the
first half of 2018/19. Annualised savings are expected to be at
least GBP2m.
Financial position
Closing year end net debt is expected to be around GBP48m (2017:
GBP23.2m), in line with the Board's expectations. Pro forma Net
Debt to EBITDA is expected to be circa 1.3x, in line with the
guidance at the time of the Merlyn acquisition.
Nick Kelsall, Group Chief Executive, said:
"The Group expects to deliver its ninth consecutive year of
revenue and underlying operating profit growth despite increased
market headwinds. This trading performance continues to demonstrate
the resilience of the Group's business portfolio and operating
model.
The Group continues to focus on complementary growth
opportunities, both organic and via acquisition. It is pleasing to
note the strong performance of Merlyn, our largest and most recent
acquisition. We are confident that Merlyn will prove to be a
valuable addition to the Group and we are exploring a number of new
business opportunities working with our other Group businesses.
We are pleased with our overall performance during the year.
Despite a backdrop of challenging market conditions, the Board
believes that the resilience of our diversified business portfolio
and the strength of our market positions leaves the Group well
placed to make further progress."
(1) Underlying operating profit excludes IAS 19R administrative
expenses, acquisition related costs and exceptional operating
items
(2) LFL / like for like excludes Merlyn revenues (acquired 23
November 2017)
ENQUIRIES:
Norcros plc Tel: 01625 547 700
Nick Kelsall, Group Chief Executive
Shaun Smith, Group Finance Director
Hudson Sandler Tel: 0207 796 4133
Nick Lyon
Notes to Editors
-- Norcros is a leading supplier of high quality and innovative
showers, shower enclosures and trays, taps, bathroom accessories,
ceramic wall and floor tiles and adhesive products with operations
primarily in the UK and South Africa.
-- Based in the UK, Norcros operates under seven brands:
-- Triton Showers - Market leader in the manufacture and marketing of showers in the UK
-- 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
-- Merlyn - the UK and Ireland's No. 1 supplier of shower
enclosures and trays to the residential, commercial and hospitality
sectors
-- Johnson Tiles - A 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 three brands:
-- Tile Africa - Chain of retail stores focused on ceramic and
porcelain tiles, and associated products such as sanitary ware,
showers and adhesives
-- Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles
-- TAL - The leading manufacturer of ceramic and building adhesives
-- 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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