£154.3m market cap

192p 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

Norcros delivered good growth in revenue (+12.2%) and operating profit (+30%) in its H119 results, with strong contributions in the UK from Merlyn and Triton and a return to profitability following restructuring at Johnson Tiles. Outside the UK, while all three operating companies grew local currency sales, short-term profitability was held back by investment activity at Johnson Tiles South Africa. On 16 January, Norcros announced the proposed acquisition of South African specialist plumbing materials business RAP Plumbing Supplies/House of Plumbing for an initial c £10m; the deal is subject to regulatory approval and should immediately enhance earnings. At the same time, management confirmed that ytd trading has been in line with the board’s expectations.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 271.2 31.6 20.7 24.4 7.9 4.6
2018A 300.1 34.7 24.4 26.8 7.2 5.6
2019E 321.3 42.4 31.1 29.5 6.5 4.6
2020E 331.0 44.7 33.2 31.2 6.2 4.1
Last updated on 19/03/2019
Industry outlook

In the UK, the residential new-build sector has performed well and there is impetus for this to continue. RMI spending has not recovered at the same rate. The South African economy is currently facing a number of challenges; wider distribution of wealth and an emerging middle class should benefit consumer spending over time. Norcros’s management has set new 2023 financial targets for the group: to attain £600m revenue with a balanced UK/overseas split and to sustain a ROCE of 15%+.

Last updated on 19/03/2019
Share price graph
Balance sheet
Forecast net debt (£m) 40
Forecast gearing ratio (%) 31
Price performance
Actual (1.7) 0.0 (1.5)
Relative* (2.9) (8.4) (2.6)
52-week high/low 230.0p/185.0p
*% relative to local index
Key management
Nick Kelsall CEO
Shaun Smith CFO