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Tiles arm boosts business at Norcros

Sales at Norcros increased by almost 6% on a like-for-like basis in the year to March 31 to £200.3m.

The company, which owns the Tritons shower and Johnsons Tiles brands as well as the Tile Africa retail business in South Africa, also said that pre-tax profits had improved by around 30% to £9.4m.

The company, which employs around 1,600 people across its various locations, is recommending an increase in its final dividend to 0.28p, which will bring the full-year divided for the year up to 0.42p, which is a 16.7% increase on last year.

Chairman John Brown said: "Our businesses continue to trade robustly in uncertain markets, and management will continue to drive the self-help strategies that have proved successful over the last two years.

"The strength of our brands, our market positions, our customer relationships, and the encouraging operational improvements in the latter part of the year in both the South African and UK tiles businesses gives the board confidence that unless markets deteriorate further, our businesses will continue to make progress in the coming year."

Brown pointed to a number of highlights that the firm achieved during the year, including the exit of an onerous lease at Braintree in Essex which cost the company £7.8m, but will lead to annual savings of £3.3m for the business. It also sold off some excess land to WM Morrison Supermarkets for around £2.6m and completed a £51m refinancing with its banks on improved terms until October 2015.

Chief executive Nick Kelsall said that revenues at its Johnson Tiles business grew by 8.7%, and were particularly strong in the UK where sales were up by 10.2%.

He added that the comissioning of a new kiln at its manufacturing base in Stoke-on-Trent had caused operational problems during the first half of the year, which had a knock-on effect on supplies to overseas markets.

This contributed to a 1.9% drop in exports during the year, but he added that the issues "are now largely resolved and export sales in the second half of the year were ahead of the prior year".

Like-for-like sales at the Triton showers business also fell, although the business delivered improved profits and generated more cash.

In South Africa, meanwhile, sales grew by 2.2% to £74m, or by 9.7% on a constant currency base as both its Tile Africa retail business and TAL tile adhesive arm grew profits on the back of stronger sales.

Johnson Tiles also suffered overseas, though, due to "major plant restructuring and significant changes being made to the manufacturing management team, production processes and controls".

Kelsall said that Norcros had "continued to invest in our businesses through this protracted economic downturn and succeeded in growing market share - all of which leaves the group well-placed to capitalise on any recovery in our markets.

Source : Mike Fahy – The Busienss Desk North West
http://www.thebusinessdesk.com/northwest/news/337085-tiles-arm-boosts-business-at-norcros.html

21 June 2012
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