Bathroom firm issues profit warning amid fears coronavirus crisis could affect supply chain
Bathroom supplies firm Norcros says the ongoing coronavirus crisis is likely to have an impact on the firm’s supply chain.
The Cheshire company sources many of its products from China and the crisis is expected affect supplies through to the end of the financial year and beyond.
The company issued a trading update for the ten month period ended 2 February 2020 .
The firm 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 Norcros has 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 despite export performance remaining subdued.
In South Africa the firm has 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 the fourth quarter.
The recently acquired House of Plumbing business continues to trade in line with expectations and the firm expects the combined South African business to generate underlying profitability for the year to 31 March 2020 marginally ahead of the 2019 financial year.
Coronavirus has had little short term impact to date as UK based stock levels have been sufficient to satisfy customer demand.
However, based on the slower than anticipated return to full production at China based suppliers the firm is predicting 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 remains fluid and is being closely monitored.
The virus has killed more than 1,800 people in China sparking a shutdown that has seen factories close across the country, which is having an impact on global supply chains.
A statement said: “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.
