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Strong Trading Momentum Continues At Norcros

Triton shower bath and sink 725 x 500.jpg

Norcros plc ("Norcros" or the "Group"), 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 7 February 2021. 

FY21 upgrade: strong trading momentum continues  

The strong recovery we experienced in the second quarter has improved markedly with revenue in the four months from the half year to 7 February 2021, 117% of the prior year on a like for like constant currency basis. This sustained momentum continues to reflect share gains as the Group's leading market positions also benefit from the increased activity levels in the repair, maintenance, and improvement (RMI) segments in the UK and South Africa. Private new housebuild activity in the UK also continues to remain robust and an important element of this outperformance. 

 

Revenue % of prior year

H1

 (LFL2)

Q2

(LFL2)

4 months to

7 Feb (LFL2)

10 months to 7 Feb

UK

84%

104%

115%

96%

South Africa

66%

87%

113%

83%

South Africa (at CC1)

79%

106%

122%

95%

Group

78%

98%

114%

92%

Group (at CC1)

83%

105%

117%

96%

1CC refers to constant currency basis  

2LFL (like for like) adjusts prior year revenue for period pro-rating of number of weeks

Our UK business has performed strongly in the four months since the half year ended 30 September 2020, with revenue at 115% of the prior year on a like for like basis. This is a particularly resilient performance against the backdrop of COVID-19 lockdowns and considerable supply chain disruption in the period. All businesses traded well in the period particularly Triton and Merlyn who continued to take market share, benefiting from their leading brands, supply chain infrastructure and stock availability.   

Our South African business also performed strongly, particularly Tile Africa which has continued to experience significant revenue growth in the retail renovation market. Revenue for the four months since the half year was 122% of prior year on a like for like constant currency basis. 

Strong balance sheet and financial position

This robust trading performance and continued operational focus has reduced Group net debt (pre-IFRS 16) further since the half year to circa £5.7m at 7 February 2021 compared to £36.4m at the start of the financial year. The Group is in a strong financial position with significant liquidity and funding headroom and against all its banking covenants.

Dividend

The Board recognises the importance of dividends and will, based on the Group's financial position and subject to the continued strong momentum in trading performance, be recommending a final dividend for the year ending 31 March 2021.  

Outlook

Norcros continues to win share in its two main geographical markets, reflecting the Group's strong competitive and financial position. The Board remains confident that the Group's leading market positions, established brands, broad distribution channels and experienced management team will deliver further growth, notwithstanding that economic conditions are likely to remain uncertain as our main markets continue to adjust to the impact of the pandemic. Consequently, it is now expected that reported underlying profit for the year to 31 March 2021 will be no less than £28m on a post-IFRS 16 basis and ahead of current market expectations of circa £25m.

The Group's next scheduled trading update will be on 15 April 2021.

Source : Norcros

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03 March 2021

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