Strategy driving progress, full year on track
Having completed the Fibo deal earlier in the week, Norcros has followed up with a solid, above market H1'26 trading update and unchanged guidance. Strategic delivery through operational excellence and highly complementary M&A is clearly being executed well and, notwithstanding market variability, Norcros is maintaining forward momentum.Norcros delivered a marginally better underlying revenue performance in H1'26 overall with the headline c.£184m also boosted by an additional trading week. In generating EBIT of c.£21.8m, a margin of c.11.9% represents a c.70bp yoy improvement from continuing operations (ie excluding JTSA) on our estimates.
Consumer confidence metrics remained subdued in both the UK and South Africa despite interest rate reductions in the period, and end demand reflects this, so progress by Norcros appears to be hard-won and ahead of its underlying markets.
Although Norcros’ share price ticked better on the Fibo deal confirmation, it remains below our existing 300p per share value which we will review for trading newsflow and the Fibo acquisition when H1'26 results are reported in November.
Valuation remains undemanding on all metrics in our view, and we would expect ongoing strategic delivery to result in further shares’ rerating.
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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