24 December 2014
("Norcros", the "Group" or the "Company")
Disposal of entire surplus legacy freehold portfolio and Property update
Norcros, the market leading supplier of innovative branded showers, taps, bathroom accessories, tiles and adhesives is pleased to announce that it has entered into an unconditional agreement to sell its entire portfolio of surplus legacy freehold properties to Clowes Developments (UK) Ltd. for £6.5m cash. Contracts have been exchanged and a 10% non-refundable deposit paid. Completion will be on 2 March 2015, at which time the remaining balance will be paid in cash.
The property portfolio which is the subject of this agreement comprises all three surplus freehold sites in Tunstall, Stoke on Trent, Staffs, the surplus freehold at Orgreave Drive, Sheffield, and two properties in Boston, Lincs which are currently let to early 2018. Following this transaction, Norcros will have no remaining surplus freehold property.
An exceptional charge of £1.5m relating to this transaction will be made in the results for the year to 31 March 2015, covering loss on disposal and transaction fees. The book value of the properties which are the subject of this transaction is £7.6m. Annualised underlying operating profit will be adversely impacted by £0.2m, being the loss of rental income from the Boston sites, net of holding costs of the other surplus freehold properties. The proceeds from this transaction will be used to pay down debt, providing further funds for the continued expansion of the Group in line with our strategic objectives.
Commenting on the transaction, Nick Kelsall, Group Chief Executive, said "I am delighted with this transaction as it is a significant step forward for the Group, an elegant solution to our surplus legacy freeholds and a very positive outcome for shareholders and management. It ends a long chapter in the Group's property history in one transaction, and realises significant cash."
Property update
The above transaction leaves two outstanding legacy property issues.
- Compensation for breach of contract with a subsidiary of WM Morrisons plc ("Morrisons") relating to the Highgate site in Tunstall, Stoke on Trent, is still being pursued.
- One legacy surplus lease remains at Groundwell, Swindon. The head lease runs to 2022 and the site is currently sub-let to Network Rail through to December 2018 at a net cost of £0.2m per annum to Norcros.
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 1750 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com/
