Don't be fooled by the 53 per cent rise in headline profits at tile and shower specialist Norcros (NXR). Reduced finance costs and the absence of last year's restructuring costs heavily skewed the figures, but on an underlying basis operating profits still rose a respectable 4.8 per cent to £6.6m, as a return to profitability at the South African operation offset weakness in some of the UK businesses.
In the UK, Johnston Tiles delivered a 20.6 per cent rise in sales, thanks in part to solid retail demand generated from outlets like B&Q, which offset a contraction in the trade sector and a 10.7 per cent fall in exports. Norcros' shower business, Triton, recovered from a weak start to the financial year, but sales were still down 8.3 per cent from a year earlier. Still, the trend is improving as second-quarter revenue was down just 3.4 per cent following a near 10 per cent decline in the first quarter. Triton has new product launches lined up for the second half, and chief executive Nick Kelsall pointed out that around 70 per cent of electric showers sales represent non-discretionary spending on replacement units.
Numis Securities is forecasting full-year pre-tax profits of £11.7m and EPS of 1.9p (from £10.7m and 1.8p in 2012).
| NORCROS (NXR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 12.75p | MARKET VALUE: | £74m | |
| TOUCH: | 12.25-13p | 12-MONTH HIGH: | 13p | LOW: 9.25p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 12p* | NET DEBT: | 29% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 102 | 4.30 | 0.70 | 0.14 |
| 2012 | 106 | 6.60 | 1.10 | 0.16 |
| % change | +4 | +53 | +57 | +11 |
Ex-div: 5 Dec Payment: 8 Jan *Includes intangible assets of £23m, or 4p a share | ||||
