Bathroom firm’s revenue continues to flow

CHESHIRE-based bathroom specialist Norcros is predicting trading results marginally head of expectations, while a recovery plan for its pensions scheme has been put into effect.

The Wilmslow company, which will announce its preliminary results for the year ended March 31 on June 14, said group revenue is expected to be in the region of £236m (2015: £222.1m), 6.3% higher than the prior year, 11.0% higher on a constant currency basis, and 2.9% higher on a constant currency like for like basis.

UK revenue for the year was 9.3% higher than the prior year reflecting the first time contribution from Croydex which was acquired on 25 June 2015.

Its South African business continued to perform strongly recording double digit constant currency revenue growth in the second half of the year, resulting in full year revenue growth of 15% on a constant currency basis.

Closing year end net debt is expected to be in line with market expectations of around £33m (2015: £14.2m). This includes a £20.1m outflow relating to the acquisition of Croydex and a £3.1m outflow, net of cash acquired, relating to the acquisition of Abode Home Products completed on  March 31 2016.

Meanwhile, the group has agreed a recovery plan with the group’s pension scheme trustees over the 2015 triennial valuation.

It shows a deficit of £73.5m (2012: £61.9m) representing an 84% funding level (2012: 85%).

The increased deficit is driven predominantly by historically low gilt yields.  
A revised deficit recovery plan has been agreed with the scheme trustee, with a cash contribution of £2.5m per annum starting in April 2016, and increasing with CPI, payable over the next 10 years.

This compares to a deficit recovery payment of £2.1m in the year to March 31 under the previous plan.

Group chief executive Nick Kelsall said: “The group expects to deliver its seventh consecutive year of growth in revenue and underlying operating profit with profitability substantially ahead of the previous year.
 
“We have also reached a satisfactory agreement with the group’s pension scheme and our financial position remains strong.”

“Furthermore, the group continues to make solid progress on its strategy to double revenue to £420m by 2018.
 
“The acquisition of Croydex has been integrated seamlessly and has performed strongly in line with our expectations. We have also recently announced the acquisition of the Abode business which is an exciting and excellent fit with our current portfolio and we expect it will be earnings accretive immediately.”