Norcros outlines growth acceleration plans

Taking its place is a ‘2023 vision’, which aims to grow revenue to £600m by then, and to deliver a sustainable return on capital employed of over 15 per cent (previously targeted at 12-15 per cent). The target of generating half of all revenue from outside the UK remains the same.

Clocking up its ninth consecutive year of growth, profits were boosted by a strong performance from its South African operation and a first-time contribution from shower enclosures specialist Merlyn, acquired in November 2017. Growth in earnings per share (EPS) was less pronounced, reflecting a £31.4m placing of new equity to help pay for the Merlyn acquisition.

In the UK, leading shower brand Triton increased revenue by 8 per cent, reflecting stronger sales in the trade and retail sector, while taps and bathroom accessories producer Vado pushed revenue ahead by 15 per cent. However, revenue was down 12 per cent at Johnson Tiles after a sharp decline in second-half sales blamed on cost-cutting in social housing refurbishments. Job losses here will mean an exceptional charge of £2.1m. In South Africa, underlying operating profits jumped 38 per cent to £8.8m, marking the culmination of supply chain improvements and cost-cutting.

Analysts at Numis are forecasting adjusted cash profits of £32.4m and EPS of 31.1p for the year to March 2019 (up from £26.3m and 29.5p in 2018).