Bathroom supplies business expects 10th year of revenue growth
Norcros, the Cheshire bathroom supplies firm, expects annual revenues to increase by more than 10%, it said in a trading update today, ahead of the release of annual figures on June 12.
It said group underlying operating profit for the year to March 31, 2019, is expected to be in line with the board’s expectations, “reflecting a very resilient performance in the context of particularly challenging conditions in our major markets”.
This, it said, will represent the group’s 10th consecutive year of revenue and underlying operating profit growth.
Group revenue for the year is expected to be in the region of £331m, compared with £300.1m last year, which is 10.3% higher than the prior year on a reported basis, 11.6% higher on a constant currency basis, and 2.4% higher on a constant currency like-for-like basis.
UK revenue was 13.6% higher than the prior year, principally reflecting the full year contribution from Merlyn which has continued to perform strongly since acquisition.
The UK performance on a like-for-like basis reflected strong revenue growth of 3.7% in the second half driven by market share gains as new range listings were secured benefiting from access to the group’s extensive customer base and its strong financial position.
The South African business again delivered strong revenue growth, despite a challenging market environment, 7.5% higher than the prior year on a constant currency basis and 3.7% higher on a reported basis, continuing the outperformance of recent years.
Net debt at March 31, 2019, is expected to be around £36m, down from £47.1m last year, reflecting strong cash generation in the second half of the year.
As previously announced, Wilmslow-based Norcros completed the acquisition of the South African-based business RAP Plumbing Supplies, trading as House of Plumbing on April 1, 2019, and will consolidate the financial results of the business from this date.
Group chief executive Nick Kelsall, said: “The group expects to deliver its 10th consecutive year of revenue and underlying operating profit growth, despite the uncertain economic and political backdrop in our two main markets.
“It is particularly pleasing to note the strong performances of Merlyn and Triton as well as the return to profitability of Johnson Tiles UK following the restructuring of the business, as announced in April 2018.
“We are also pleased to have recently added the House of Plumbing business to our portfolio as we look to accelerate the growth of our South African business in the important commercial and specification market segments.”
He added: “Our performance continues to demonstrate the resilience of our group with its market leading positions, well-established brands, superior product and service offer and strong financial position.
“Whilst market conditions are likely to remain challenging, the board is confident that these attributes, together with our very focused strategy, will continue to drive market outperformance leading to further progress in the year ahead.”
