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Norcros Warns On Profits Amid Challenging Conditions

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Norcros, a market leading supplier of high quality and innovative bathroom and kitchen products is today providing a trading update for the ten month period ended 2 February 2020 and an update on the potential impact of the Coronavirus.

Trading update 

The Group has continued to win market share in its major markets despite conditions remaining challenging since its interim results were announced in November. 

In the UK we have continued to benefit from share gains in the domestic market, with overall year on year revenue growth similar to what was achieved in the first half albeit with our export performance remaining subdued. 

In South Africa we have seen no market improvement in the second half of the year, with activity levels in the construction sector in particular markedly lower at the start of our fourth quarter. In response to reduced demand we are evaluating a number of initiatives which will reduce costs and improve profitability. Notwithstanding the market environment, the House of Plumbing business continues to trade in line with our expectations, and we expect our combined South African business to generate underlying profitability for the year to 31 March 2020 marginally ahead of the 2019 financial year. 

Impact of the Coronavirus   

The Coronavirus has had little short term impact to date as our UK based stock levels have been sufficient to satisfy customer demand. However, based on the slower than anticipated return to full production at our China based suppliers we do now envisage that the supply chain disruption is likely to have some impact on the seasonally important remainder of this financial year and early next. The situation however remains fluid and is being closely monitored and actively managed. 

Summary 

The Board continues to remain confident that the Group's leading market positions, strong brands and financial strength will deliver further growth although in the short term it is now expected that underlying profitability for the year to 31 March 2020 will be below market expectations albeit ahead of last year. 

The Group will provide a full year trading update on 16 April 2020. 

Source : Norcros

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20 February 2020

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