Steering a steady course in H1'25
Norcros’ H1'25 pre-close statement infers that headline trading in Q2 was similar to Q1, leaving group revenue flat overall y-o-y for continuing businesses. On the same basis, while profitability looks to be slightly lower - which may reflect mix effects - company expectations for the full year are unchanged.While easing inflation and interest rates have been welcomed in Norcros’s primary markets, any significant pick-up in economic activity is still pending as new governments bed in in both cases. H1'25 LFL revenues nudged ahead in the UK (continuing operations +1%) and declined modestly in South Africa (-2% at constant currency) giving a flat y-o-y performance at group level, excluding the exited Johnson Tiles UK and Norcros Adhesive businesses.
Our expectation is that management will report more fully on strategic actions taken to date with the H124 results. The completion of Vado’s warehouse consolidation moves and streamlining Grant Westfield’s distribution are two examples of positioning these businesses for growth with more efficient service platforms and greater alignment in these areas across operating companies.
We make no changes to our estimates or fair value ahead of the H1 results due out in November. As before, we believe that translating strategy into enhanced earnings growth can be the catalyst for generating share price upside that could be well in excess of our current fair value of 253.5p / share.
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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