Norcros lowers full year profit guidance

published 16 February 2012

Anglo-South African home products group Norcros fell to a 52-week low after issuing a profit warning, as trading remained tough and the decline in the value of the South African rand took its toll.

The group admitted that trading profit for the current financial year, which runs to the end of March, is anticipated to be marginally below the firm's previous expectations as a result of weaker consumer confidence and increasingly challenging market conditions.

The firm's revenues from its UK business in the second half of the financial year (for the 18 week period to February 5th 2012) were 3.0% lower than last year, reducing the year-to-date revenues gain to 4.7% year-on-year.

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Triton, the firm's shower business, saw revenues for the 18 week period decline by 7.8% versus the comparable period last year, leaving year-to-date revenues 1.8% lower, although things were more positive in the tiles business, Johnson Tiles, which saw revenues for the 18 week period increase by 1.1% versus last year.

Revenues in the South African businesses for the 18 week period were 10.8% higher on a constant currency basis versus the comparable period last year, but 2.1% lower on a reported basis.

Overall, group revenues increased by 0.9% on a constant currency basis compared to last year, but were lower by 3.1% on a reported basis.

Year-to-date group revenues were 5.6% higher on a constant currency basis and 4.2% higher on a reported basis than last year.

In a statement the firm said: "Market conditions in the UK and South Africa were particularly challenging in December reflecting the earlier and longer than expected Christmas shutdowns in our major markets. However, group revenues in January showed some improvement and we are confident that we have maintained our leading positions in our core markets."

The share price fell 11.11% to 10.00p by 12:00.