Norcros delivers solid half year growth

Norcros, a supplier of branded showers, tiles and adhesives focused in the UK and South Africa, has said group revenue in the 26 weeks to the end of September has grown around 9.4 per cent on a constant currency basis.

As such, group revenue is expected to total £106m (2011: £102.4m), while underlying operating profit is expected to be not less than £6.6m (2011: £6.3m), and underlying profit before taxation is expected to be not less than £5.9m (2011: £5.4m).

Despite challenging markets in the UK, the company has posted year-on-year revenue growth of 4.7% for the period.

Johnson Tiles recorded revenue growth of 17% in the period, driven by share gains in B&Q which has implemented a major tile range review and introduced a new in-store tile shop.

The UK shower market remained challenging, the firm said, with revenue at Triton 8.3% lower than the prior year for the period. UK revenue was 6.4% lower than the prior year, but represents continued market share gain. Second quarter UK performance improved and was 3.4% below the prior year compared to the first quarter which was 9.6% below the prior year.

Export revenue, which is predominantly derived from Ireland and represents about 14% of overall Triton revenue, was 18.8% lower than the prior year reflecting continued general economic and Eurozone uncertainty. Again, performance in the second quarter improved at 7.1% below the prior year.

"Good progress has continued in our South African businesses and in particular in Johnson Tiles South Africa where management changes and operational improvements have improved financial performance. On a constant currency basis, South African revenue for the period was 17.4% higher than the prior year, although a significantly weaker rand means reported sterling revenue was 1.9% ahead," the company said.

The firm's closing net debt before pre-paid finance costs is expected to be in the region of £21m (2011:£18.1m) with the increase being driven by the working capital investment required to service the increased level of business in Johnson Tiles UK.

The company also announced that on Thursday it started a consultation process with its UK employees with a view to closing the defined benefit section of its UK pension scheme to all future accrual from March 31st 2013. As part of this process a new, auto enrolment compliant defined contribution scheme will be introduced from April 1st 2013.

Looking forward, the company added: "The outlook for both our UK and South African markets remains challenging, but nevertheless the board remains confident that through the ongoing programme of growth initiatives and self help actions Norcros will continue to make further progress."

The share price rose 4.35% to 12p by 08:24.

NR