Norcros sales remain flat, but annual profits expected to match forecasts

Full year underlying operating profits at Norcros, the Wilmslow-based bathroom and kitchen supplies group, will match forecasts, it said in a trading update today, despite an 11.1% decline in sales.

In an update for the March 31, 2024 financial year, it said it has continued to demonstrate the strength of its business in a “challenging demand environment”.

It revealed that overall group revenue for the year is expected to be circa £390m, against £441m the previous year, 11.1% below prior year on a reported basis and 6.1% below on a constant currency like for like (LFL) basis.

Norcros-compiled market consensus for the year estimates that the underlying operating profit will be £42.7m.

Its interim results, announced last November, revealed the difficult market conditions in play, resulting in an 8.3% decrease in sales of £201.6m, and a pre-tax profit of £11.7m, down from £14m previously.

In its annual update today, it said its UK business has performed robustly, with revenue 3.3% below prior year on a LFL basis.

The South African business performed resiliently, despite the challenging market conditions aggravated by the significant and unpredictable power interruptions in the first half.

Reported revenue for the year was 12.3% lower than prior year on a constant currency basis. The local management team has implemented proactive self-help initiatives and, notwithstanding improved power availability, the group expects the recovery in demand to be gradual.

Norcros said it remains in a strong financial position, maintaining its historically high levels of cash generation, with net debt, at March 31, 2024, expected to be around £37 million, down from £49.9m a year ago.

Chief executive, Thomas Willcocks, said: “Norcros has again demonstrated the strength of its business and leading positions in its end markets, delivering solid results notwithstanding the macroeconomic challenges.

“The group’s focus on continuing portfolio management, our collective organic growth accelerators and scale-based operational efficiencies will continue to deliver profitable market share growth in the year ahead.”

Norcros operates under seven brands: Triton, Merlyn, Multipanel (Grant Westfield), Vado, Croydex, Abode and Johnson Tiles, and employs around 2,400 people.

The group expects to announce its full year results on June 13.