FY24 matching up to our expectations
In meeting expectations for FY24, Norcros has demonstrated business resilience in the face of challenges in both of its primary markets. A positive cash flow performance has also left year end pre IFRS16 gearing below 0.9x underlying EBITDA.In our view, neither virtue is reflected in the company’s valuation and the 1 May Capital Markets event should help to shed more light on the company’s strategy, market positions and medium-term prospects.
Encouragingly, UK margins improved further whereas in South Africa load shedding is abating and revenues stabilised. With net cash inflows, the group ended FY24 with c.£37m net debt (pre-IFRS16) versus c.£50m a year earlier.
Our fair value of 233p / share (very close to the H124 NAV / share) is unchanged and represents potential c.32% upside in a re-rating scenario.
Norcros Plc is a holding company for the Norcros Group. The Company's principal activities include development, manufacture and marketing of home consumer products in the United Kingdom and South Africa. The Company's segments include UK and South Africa. The Company has six United Kingdom businesses, including Triton Showers, Vado, Croydex, Abode, Johnson Tiles and Norcros Adhesives, and three businesses in South Africa, including Johnson Tiles South Africa, TAL and Tile Africa. The Company is focused on showers, taps, bathroom accessories, tiles and adhesives. In the United Kingdom, the Company offers a range of bathroom and kitchen products both for domestic and commercial applications. The Company offers mixer showers and accessories; tile and stone adhesives; taps, bathroom accessories and valves; bathroom furnishings; ceramic wall and floor tiles; kitchen sinks; tile adhesives, pourable floor coverings and tiling tools through its United Kingdom and South Africa business.
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