Norcros (NXR) delivered another strong performance in the year to March 2017, increasing underlying pre-tax profits by 12 per cent to £22.9m. Strong cash generation also helped to cut net debt by 29 per cent to £23.2m. This has been achieved through a combination of organic and self-funded acquisitive growth, and marks the eighth successive year that revenue and underlying profits have risen.
Norcros supplies showers, taps, bathroom accessories, tiles and adhesive products, and operates in the UK and South Africa. Trading in the UK suffered in the six months to September 2016, with like-for-like revenue down by 5 per cent as the EU referendum hit the retail sector. However, revenue grew by 9 per cent in the second half, and total revenue for the year grew by 11.8 per cent, helped by a full-year contribution from the Abode acquisition and three months from Croydex.
Trading in South Africa remained robust, with the tile operation operating at maximum capacity and helping to boost underlying profits by 56 per cent to £6.4m. Headline profits were lower, partly because of a change in the valuation of derivative financial instruments and acquisition-related costs.
Analysts at Numis are forecasting adjusted pre-tax profits for the year to March 2018 of £23.9m and EPS of 28.5p (from £22.9m and 27.8p in FY2017).
| NORCROS (NXR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 174p | MARKET VALUE: | £107m | |
| TOUCH: | 174-177p | 12-MONTH HIGH: | 197p | LOW: 137p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 92p* | NET DEBT: | 41% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 200 | 5.2 | 10.0 | 4.6 |
| 2014 | 219 | 5.8 | 17.0 | 5.1 |
| 2015 | 222 | 11.0 | 13.6 | 5.6 |
| 2016 | 236 | 15.4 | 28.5 | 6.6 |
| 2017 | 271 | 11.5 | 28.8 | 7.2 |
| % change | +15 | -25 | +1 | +9 |
Ex-div: 22 Jun Payment: 3 Aug *Includes intangible assets of £44.8m, or 71p a share | ||||
