£163.6m market cap

203p last close

Norcros is a leading supplier of showers, enclosures and trays, tiles, taps and related fittings and accessories for bathrooms, kitchens, washrooms and other commercial environments. It has operations in the UK and South Africa, with some export activity from both countries.

Investment summary

An end H120 update pointed to a strong Q2 trading recovery after a COVID-19 affected Q1. The indicative H121 group revenue figure of c £135m (-17% l-f-l y-o-y on a constant currency (CC) basis), comprised UK c £94m (-16% l-f-l) and South Africa c £42m (-21% l-f-l CC) producing underlying EBIT of £12m (pre-IFRS 16 vs £17.1m in H120). Implicitly, virtually all of the profit was generated in Q2 and the flagged net debt reduction to £8m looks very impressive. The company’s business portfolio has demonstrated resilience and agility in being able to respond to these variable demand conditions. Our estimates remain suspended ahead of the H121 results announcement on 12 November.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2019A 331.0 42.2 30.9 29.6 6.9 4.6
2020A 342.0 38.8 27.1 26.1 7.8 4.7
2021E N/A N/A N/A N/A N/A N/A
2022E N/A N/A N/A N/A N/A N/A
Industry outlook

RMI has been a stronger sub-sector during/exiting the UK COVID-19 lockdown phase while new residential new-build gathered momentum more gradually. The South African economy has faced a number of challenges; wider distribution of wealth and an emerging middle class should benefit consumer spending over time. Management’s new (pre-COVID-19) 2023 financial targets are to attain £600m revenue with a balanced UK/overseas split and to sustain a ROCE of 15%+.

Last updated on 27/11/2020
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Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
Actual 11.2 48.2 (18.8)
Relative* 0.1 38.5 (7.2)
52-week high/low 305.0p/120.0p
*% relative to local index
Key management
Nick Kelsall CEO
Shaun Smith CFO

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