Profits hit at Norcros

SHOWER and tile group Norcros has agreed changes to its banking covenants as it prepares to post much lower profits.

In a trading update ahead of its March 31 year-end the Cheshire company said pre-tax profits would fall from £13m to £3m. Group revenues will be down 9% at £152m.

The drop was down to “market softness” in South Africa, where its operations are expected to report a loss of £1.9m, losses at its Greek associate business and restructuring costs of £3.4m.

In the UK operations, “continued to trade resiliently” and trading profits are expected of around £8.5m. Its Triton shower business performed “particularly well”.

Debt at the group has increased by £1.5m to £48m and it has agreed changes to its covenants as well as changes to the terms of a £80m facility which is due to expire in July 2012.

Last month Norcros, which also owns Johnson Tiles, warned that profits would be hit by falling revenue.