Norcros Reports 'Robust' Performance in First Half

Norcros, a market leading supplier of high quality and innovative bathroom and kitchen products will announce its interim results for the 27-week period ended 6 October 2019 on 14 November 2019. In advance of this, the Group is providing the following trading update.

Trading 

Group underlying operating profit¹ for the first half is expected to be in line with the Board's expectations, a resilient performance reflecting the Group's continuing success in winning share despite the challenging market conditions. 

Group revenue for the 27 week first half is expected to be approximately £181.2m (2018: £162.6m), 11.4% higher than the prior year 26 week period on a reported basis, 12.8% higher on a constant currency basis, and 0.9% higher on a like for like² constant currency basis. 

¹ Underlying operating profit excludes IAS 19R administrative expenses, acquisition related costs and exceptional operating items

² LFL (like for like) adjusts 2019 revenue for House of Plumbing (acquired 1 April 2019) and 27 to 26 week period pro-rating

UK revenue for the first half was 5.2% higher than the prior year on a reported basis and 1.3% higher on a like for like² basis. This reflected market share gains as domestic revenue grew by 3.4% on a like for like² basis for the period combined with an improved export performance in the second quarter.  

Revenue in our South African business increased by 24.5% on a reported basis and 29.4% on a constant currency basis compared to the prior year. Like for like² revenue was in line with the previous year reflecting the difficult economic environment and lower levels of activity. We continue to win share and have successfully integrated the House of Plumbing business, which has performed in line with our expectations.   

Financial position 

Net debt is expected to be approximately £42m (2018: £53.5m), in line with expectations following the acquisition of House of Plumbing in the first half of the year. 

Outlook 

The robust performance in the first half against the backdrop of challenging conditions in our two main markets demonstrates the resilience of the Group's strategy and operating model. The fragmented nature of our markets continues to provide growth opportunities for the Group as we maintain our focus on winning market share. The Board remains confident that the Group's leading market positions, portfolio of strong brands and financial strength will enable further progress in line with its expectations for the year to 31 March 2020.

Source : Insight DIY Team and Norcros

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