Norcros (NXR) was firing on all cylinders in the six months to September 2018, with Johnson Tiles returning to profitability after a restructuring. This puts the domestic showers and tiles manufacturer on target to achieve its 10th consecutive year of profit growth.
Underlying profits in the UK grew by more than a half to £11.4m, boosted by the acquisition of shower enclosure supplier Merlyn and a good performance from UK shower manufacturer Triton, where revenue was up by nearly 10 per cent.
Despite challenges posed by the political and economic environment, as well as a weaker rand, the South African business reported an operating profit of £3.8m. The fact that this was down from £4.3m a year earlier reflected the impact from the planned shutdown of its tiles manufacturing plant which, following refurbishment, will result in a 10 per cent increase in capacity. The plant has now reopened, which should lead to a modest increase in profits in the second half.
Cash flow narrowed to £11.4m, from £16.2m, because of additional investment in planned new product launches and lower-than-expected revenue from several export markets. This was most noticeable in taps and bathroom accessories manufacturer Vado, where export revenue declined by 35 per cent.
Analysts at Numis Securities are forecasting adjusted pre-tax profits for the year to March 2019 of £32.4m and EPS of 31.1p (from £26.3m and 29.5p in 2018.
| NORCROS (NXR) | ||||
| ORD PRICE: | 224p | MARKET VALUE: | £180m | |
| TOUCH: | 221-224p | 12-MONTH HIGH: | 234p | LOW: 170p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 152p | NET DEBT: | 44% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 145 | 7.4 | 8.9 | 2.6 |
| 2018 | 163 | 15.2 | 15.1 | 2.8 |
| % change | +12 | +105 | +70 | +8 |
| Ex-div: | 29 Nov | |||
| Payment: | 11 Jan | |||
| *Includes intangible assets of £97m, or 120p a share | ||||
