Norcros ponders future of South African set-up as annual group revenues slip again

Annual underlying operating profits at Wilmslow-based bathroom and kitchen supplies group Norcros are meeting expectations, despite a fall in reported revenues, a trading update revealed today, which also included news that its South African division could be jettisoned.

The group will publish its results for the year to March 31, 2025, on June 12. It said it expects underlying operating profit to be in line with market expectations of £43m, with a range of £42m to £43.8m.

However, reported group revenues are expected to be 6.2% lower than the previous year at approximately £368m.

The update said the UK businesses managed to generate a one per cent increase in like for like revenue ahead of the prior year, demonstrating market share growth in a weak demand environment.

But reported revenue was 9.1% lower than the prior year, largely due to the sale of Johnson Tiles UK, which completed in May 2024.

In the year to March 31, 2024, group revenues dropped 11.1% to £392.1m, while underlying operating profit dropped 8.7% to £43.2m.

In the South African business, revenue for the 2025 fiscal year was 1.3% higher on a reported basis and 0.4% higher on a constant currency basis.

The group has launched a strategic review of Johnson Tiles South Africa, which should conclude by July this year.

It said challenging demand conditions in the tile manufacturing segment of the South African market have continued, exacerbated by a recent material increase in tile manufacturing capacity in the region which has made it increasingly difficult to sell its capacity profitably.

Johnson Tiles South Africa delivered external revenue for the year ended March 31, 2025 of circa £12m – representing about three per cent of group revenue – a small underlying operating loss pre-South African central costs in the year and operating cash outflows of around £4.4m.

Last year the South African division suffered from significant energy interruptions.

The group said it remains in a strong financial position with net debt at March 31, 2025, expected to be around £37m, compared with £37.3m in 2024, with cash generation in the period impacted by cash outflows of approximately £4.4m at Johnson Tiles South Africa.

Chief executive, Thomas Willcocks, said: “We have again delivered a strong set of results, underpinned by the strength of our brands, their leading positions and the successful execution of our strategy.

“There is clearly macro uncertainty at present with the consequences of increased global tariffs yet to play out.

“Norcros has negligible direct exposure to the USA (revenue less than 0.5%) and a proven local and international supply chain, again with no direct exposure to the USA.”

He added: “The group will proactively manage our way through this period, as we have successfully done in the past, whilst we continue to look to capitalise on the further share gain opportunities that our scale, supply chain resilience and strong balance sheet provide.”