Norcros (NXR) delivered its sixth consecutive year of underlying operating profits growth in the year to March, boosted by a much better performance from its South African operation.
After investing in new equipment, products and a stronger management team, this division started to gain some real traction, with revenue up by 15.1 per cent, although rand weakness trimmed this back to 3.2 per cent in sterling terms. Underlying operating profits rose by two-thirds to £3.2m, while operating margins moved up from 2.7 per cent to 4.4 per cent.
As a supplier of showers, bathroom accessories, tiles and adhesives, the business has benefited from a strong rise in house construction in the UK, although this has been offset to some extent by continued sluggishness in the retail sector. This left UK revenue just marginally higher at £149.1m. Chief executive Nick Kelsall pointed to the promising recent real wage growth of recent months, though discretionary spending levels among lower and middle income earners are still lagging.
Analysts at Numis are forecasting adjusted pre-tax profits for the year to March 2016 of £16.8m and EPS of 2p. (from £15.8m/2.1p in 2015).
| NORCROS (NXR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 18p | MARKET VALUE: | £107m | |
| TOUCH: | 17.5-18.3p | 12-MONTH HIGH: | 20p | LOW: 15p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 9p* | NET DEBT: | 27% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 196 | 7.5 | 1.2 | 0.36 |
| 2012 | 200 | 9.4 | 1.6 | 0.42 |
| 2013 | 200 | 5.2 | 1.0 | 0.46 |
| 2014 | 219 | 5.8 | 1.7 | 0.51 |
| 2015 | 222 | 11.0 | 1.4 | 0.56 |
| % change | +2 | +90 | -18 | +10 |
Ex-div: 25 Jun Payment: 29 Jul *Includes intangible assets of £27m, or 4.5p a share | ||||
