Market Cap£242.7m

Last Close 300p

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.

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Investment summary

FY21 started in the teeth of the pandemic but ended with a third estimates upgrade in six weeks, resulting in earnings expected to be ahead of FY20. Both the UK and South African divisions had strong H2 trading periods with like-to-like CER revenue growth of 115% and 123% respectively and the improved mix (including strong trading at Triton and Merlyn) is probably the key driver behind the required uplift to our FY21 EBIT estimate. Norcros ended FY21 with net cash (pre-IFRS 16 leases) of c £10m, a remarkable c £46m net cash inflow from the end-FY20 net debt position. Following the year-end update, we upgraded our EPS estimates by c 8% for FY21 and 5–6% for the following two years and made a sharper increase to our expected FY21 DPS. FY21 results are due on 10 June.

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 10.1 N/A
2020A 342.0 38.8 27.1 26.1 11.5 N/A
2021E 324.5 38.7 28.0 26.9 11.2 N/A
2022E 337.5 41.4 31.1 29.9 10.0 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 (pre COVID-19) 2023 financial targets targeted £600m revenue with a balanced UK/overseas split with sustained ROCE of 15%+.

Last updated on 21/06/2021
Content on Norcros
Norcros – FY21 profitability exceeds prior year
Industrials | Update | 19 April 2021
Norcros – Momentum maintained
Industrials | Update | 7 April 2021
Norcros – Revenue rebound has accelerated in H2
Industrials | Update | 5 March 2021
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Share price graph
Balance sheet
Forecast net cash (£m) 9.9
Forecast gearing ratio (%) N/A
Price performance
Actual 3.5 14.5 82.9
Relative* 2.8 8.8 58.4
52-week high/low 336.0p/136.0p
*% relative to local index
Key management
Nick Kelsall CEO
Shaun Smith CFO