23 July 2014
Norcros
("Norcros", the "Group" or the "Company")
Interim Management Statement and Re-financing
Ahead of its AGM, Norcros, the market leading supplier of innovative branded showers, taps, bathroom accessories, tiles and adhesives, publishes its Interim Management Statement covering the 13 week trading period to 29 June 2014. The Group also announces that it has entered into a new £70m committed, unsecured revolving credit facility with a £30m accordion facility to July 2019.
Trading
Group revenue from continuing operations for the 13 week period was 0.9% higher on a constant currency basis compared to the same period last year but 5.7% lower in Sterling reflecting a weaker South African Rand.
Market conditions remain mixed for our UK businesses. Revenue from the UK market was 1.4% higher than the same period last year with continued growth in the trade sector of 4.2% but with the retail sector 3.7% lower. Export revenue was however 13.2% lower reflecting the timing of commercial projects in Vado outweighing good export growth in Triton. This left total revenue from our UK businesses for the 13 week period 1.6% lower than the same period last year.
Revenue at Triton for the 13 week period was 2.6% lower than the same period last year. UK revenue was 6.9% lower with revenue from the trade sector 13.8% lower due to destocking and internal restructuring in the national merchants. Retail sector revenue was 5.3% lower albeit improving through the 13 week period. Export revenue, which is predominantly derived from Ireland and accounts for 19% of overall Triton revenue, performed well in the period growing 21.3%.
Vado continued its strong UK revenue growth for the 13 week period at 18.5% ahead of last year but was offset by export revenue 35% lower, reflecting commercial project timing and distributor destocking in the Middle East which is expected to correct in the balance of the financial year. This left total revenue for the 13 week period 6.4% lower than last year.
Revenue at Johnson Tiles for the 13 week period was 0.9% lower than the same period last year. UK trade revenue continued to improve, being 11.8% higher. However, UK retail revenue declined 8.7% in the 13 week period reflecting weak sales out across the sector. This left overall UK revenue broadly in line with last year. Export revenue was 1.5% lower than the same period last year. The cost base restructuring implemented in the second quarter last year has ensured that profitability has materially improved over the same period last year.
Revenue from our South African businesses grew by 6.2% on a constant currency basis, but a weaker Rand saw Sterling reported revenue 13.1% lower than the same period last year. Tile Africa experienced particularly strong constant currency growth at 12.1% and Johnson Tiles South Africa continued to make good progress towards profitability.
Re-financing
Norcros has entered into a new committed £70m unsecured revolving credit facility and a £30m accordion facility through to July 2019 with three banks. Two of the banks, Lloyds and Barclays are longstanding lenders to the Group, whilst the third, HSBC, introduces a new relationship replacing Svenska Handelsbanken. The terms of these new arrangements provide the Group with increased flexibility reflecting its strong financial position, and will reduce net interest costs by approximately £0.2m per annum based on current levels of net debt and leverage.
Outlook
The economic outlook in the UK continues to be positive in terms of construction activity and housing transactions benefitting the trade sector. As reported previously, the UK retail sector is taking longer to recover and still remains challenging. Whilst the medium term outlook in South Africa is still positive, the weak Rand continues to have an adverse effect on Rand profit translation to Sterling. Nevertheless, given the continuing improvement in the financial performance of our UK and South African tile businesses and the expected recovery in Vado export revenues as commercial projects complete, the Board remains confident that the Group should continue to make progress in line with market expectations for the current year.
ENQUIRIES:
Norcros plc |
Tel: 01625 547 700 |
Nick Kelsall, Group Chief Executive |
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Martin Payne, Group Finance Director |
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Hudson Sandler |
Tel: 0207 796 4133 |
Nick Lyon |
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Charlie Jack |
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Katie Matthews |
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Notes to Editors
· Norcros is a leading supplier of high quality and innovative showers, taps, bathroom accessories, ceramic wall and floor tiles and adhesive products with operations in the UK and South Africa.
· Based in the UK, Norcros operates under four brands:
· Triton Showers - Market leader in the manufacture and marketing of showers in the UK
· Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom accessories and valves
· Johnson Tiles - A leading manufacturer and supplier of ceramic tiles in the UK
· Norcros Adhesives - Manufacturer of tile & stone adhesives, grouts and related products
· Based in South Africa, Norcros operates under three brands:
· Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitary ware, showers and adhesives
· Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles
· TAL - The leading manufacturer of ceramic and building adhesives
· Norcros is headquartered in Wilmslow, Cheshire and employs around 1650 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com/
