Norcros completes £51m refinancing
SHOWERS-to-tile maker Norcros has completed a refinancing deal which has seen it secure £51m from a club of three banks under a four-year deal.
The revolving credit facility has been agreed with its two existing banks, Lloyds and Barclays, and Handelsbanken.
Norcros owns Birmingham-based Triton and Stoke company Johnson Tiles and is headquartered in Cheshire.
It said the new deal would lower its borrowing costs to the tune of around £500,000 per year as well as providing it with greater flexibility.
However, it said it would incur a £1.2m exceptional non-cash charge relating to fees from its previous refinancing.
Norcross added that like-for-like sales for the six months to October 2 were likely to be 9.2% higher at £102.3m, compared with £97.3m for a 27-week period last year.
Pre-tax profits before tax, exceptionals and finance costs are likely to be flat at around £5.4m (2010: £5.6m, 27 weeks).
Norcros said its UK business had “performed resiliently”, particularly its Triton showers business.
Profits in its South African business have been impacted, however, as it has changed around the management team and operations in a bid to improve its long-term performance. Net debt increased by £6m to £19m.
The firm said the increase was due to the previously announced exit of an onerous lease in Braintree which had an upfront cost of £7.8m but which saved the business £3.3m a year in rent payments.
“The board believes Norcros should continue to make good progress provided conditions in the group’s key markets do not deteriorate from current levels,” the company said.
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