14 April 2022
Trading Update
Norcros plc ("Norcros" or the "Group"), a market leading supplier of high quality and innovative bathroom and kitchen products, will announce its preliminary results for the year ended 31 March 20221 on 9 June 2022. In advance of this, the Group is providing the following trading update.
Full year trading performance ahead of expectations
The Group has continued to trade robustly, acting decisively to counter unprecedented cost inflation and navigate exceptional supply chain challenges. The Board now expects underlying operating profit for the year to 31 March 20221 to be at a record level and ahead of its previous expectations.
Group revenue for the year ended 31 March 20221 is expected to be in the region of £396 million (2021: £324.2 million, 2020: £342.0 million), 22.2% above prior year on a reported basis and 20.6% above on a constant currency basis.
Against a pre-pandemic FY20 comparator, this represents a 15.8% increase on FY20 on a reported basis, 18.6% above on a constant currency basis and 20.8% above on a constant currency LFL3 basis.
| | Revenue increase on prior year | | Revenue increase on FY20 | |||||
| | Reported | | Reported | LFL3 | ||||
| | H1 | H2 | FY | | FY | H1 | H2 | FY |
| UK | 39.6% | (0.4%) | 16.6% | | 13.9% | 17.5% | 14.8% | 16.1% |
| South Africa | 68.5% | 11.1% | 34.0% | | 19.6% | 10.9% | 35.9% | 21.9% |
| South Africa at CC2 | 52.4% | 11.1% | 28.6% | | 28.1% | 20.0% | 43.8% | 30.5% |
| Group | 48.5% | 3.4% | 22.2% | | 15.8% | 15.1% | 21.5% | 18.1% |
| Group at CC2 | 43.8% | 3.4% | 20.6% | | 18.6% | 18.4% | 23.6% | 20.8% |
Our UK business has continued to perform strongly with revenue at 16.6% above prior year and 16.1% above FY20 on a like for like "LFL3" basis, benefitting from the breadth of its distribution channels, stock availability and market leading service levels.
Our South African business also continued to perform robustly, reflecting its leading market positions, stock availability and enhanced product offer resulting in increasing share gains in the second half. Revenue for the year was 28.6% higher than prior year and 30.5% higher than FY20 on a constant currency LFL3 basis.
Financial position
The Group remains in a strong financial position and has invested in inventory in the period to optimise our service and stock availability proposition in the light of exceptional supply chain challenges. Net cash (on a pre-IFRS 16 basis) at 31 March 20221 is expected to be circa £7 million (2021: net cash of £10.5 million, 2020: net debt of £36.4 million).
Refinancing of banking facilities
The Group is pleased to announce that it has agreed a new, £130 million multicurrency revolving credit facility ("RCF") with four lenders. The facility is for an initial three year and seven month term, with two further years as extension options, and includes the option for an uncommitted accordion facility of £70 million.
Triennial pension scheme valuation
The Group has reached agreement recently with the Trustee on the 2021 triennial actuarial valuation for the UK defined benefit scheme and on a new deficit recovery plan. The actuarial deficit at 31 March 2021 was £35.8m (2018: £49.3m). Deficit repair contributions have been agreed at £3.8m per annum from 1 April 2022 to March 2027 (increasing with CPI, capped at 5%, each year).
Groundwell - exit from last onerous property lease
The Group has also reached agreement with the landlord to exit early the only remaining surplus and legacy onerous property lease at Groundwell, Swindon which was expiring on 23 June 2022. A cash settlement payment of £1.3 million including dilapidation obligations was made in the period. Annualised holding costs were previously £0.6m.
Notice of results
The Group will announce its full year results for the year ended 31 March 20221 on Thursday 9 June 2022.
Nick Kelsall, Chief Executive Officer, said:
"Norcros has continued to build on last year's strong recovery from the unprecedented global disruption and uncertainty caused by the pandemic. It is particularly pleasing to see how well our businesses both in the UK and South Africa have continued to make strong progress notwithstanding the supply chain challenges and a period of exceptional cost inflation.
Whilst market conditions are likely to remain uncertain, exacerbated by the situation in Ukraine, the Board believes that the Group's highly experienced management teams, leading brands, proven business model, and leading customer service proposition will continue to drive outperformance leading to further progress in the year ahead."
1. The accounting reference 'year to 31 March 2022' relates to the 52-week accounting period commencing on 5 April 2021 and ending 3 April 2022
2. CC refers to constant currency basis
3. LFL adjusts 2020 revenue from a 53 to a 52 week period pro-rating and H1 2020 revenue from a 27 week to a 26 week pro rating
Enquiries
| Norcros plc | Tel: 01625 547700 |
| Nick Kelsall, Chief Executive Officer | |
| James Eyre, Chief Financial Officer | |
| | |
| Hudson Sandler | Tel: 0207 796 4133 |
| Nick Lyon Sophie Miles | |
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Notes to Editors
Norcros is a market leading supplier of high quality and innovative bathroom and kitchen products with operations primarily in the UK and South Africa.
· Based in the UK, Norcros operates under seven brands:
| • | Triton - Market leader in the manufacture and marketing of showers in the UK |
| • | Merlyn - The UK and Ireland's No.1 supplier of shower enclosures and trays to the residential, commercial and hospitality sectors |
| • | 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 |
| • | Johnson Tiles - The leading manufacturer and supplier of ceramic tiles in the UK |
| • | Norcros Adhesives - Manufacturer of tile and stone adhesives, grouts and related products |
· Based in South Africa, Norcros operates under four brands:
| • | Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitaryware, showers and adhesives |
| • | Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles |
| • | TAL - The leading manufacturer of ceramic and building adhesives |
| • | House of Plumbing - Market leading supplier of specialist plumbing materials |
· Norcros is headquartered in Wilmslow, Cheshire and employs around 2,200 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com
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