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Norcros (LSE: NXR)

Currency in GBP

Last close As at 04/12/2023

GBP1.66

▲ −4.50 (−2.65%)

Market capitalisation

GBP152m

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.

The UK’s new build housing market is subdued following the interest rate increases, although the repair, maintenance and improvement market has been more robust. In South Africa, demand across the board has been affected by the ongoing power disruption issues, which are likely to remain a feature.

Latest Insights

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Industrials | Update

Norcros — UK margins up materially, South Africa stabilising

Industrials | Update

Norcros — Strong anchors weather the storms

Industrials | Update

Norcros — New CEO likely to pursue existing strategy

Industrials | Update

Norcros — In-line update highlights undervalued entity
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Sector

Industrials

Equity Analyst

Andy Murphy

Andy Murphy

Director, Financials & Industrials

Key Management

  • James Eyre

    CFO

  • Thomas Willcocks

    CEO

Balance Sheet

Forecast net debt (£m)

40.1

Forecast gearing ratio (%)

18

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 22.7 14.1 (8.1)
Relative 19.3 14.6 (6.7)
52 week high/low 223.0p/135.5p

Financials

Norcros’s compelling investment case was underpinned at the half year where underlying operating profit was down less than 3% despite material revenue pressure. Group operating margins rose 60bp, the UK business reported record underlying profits and Norcros continued to take market share in both the UK and South Africa. We believe that Norcros’s key strengths are underappreciated and that legacy issues, notably the pension deficit, have been resolved. We retain our estimates and value the shares at 246p, implying c 50% upside.

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 396.3 47.0 38.6 37.99 4.4 2.9
2023A 441.0 52.3 41.5 40.89 4.1 2.8
2024E 442.1 49.4 35.3 30.02 5.5 3.0
2025E 447.2 49.8 36.5 30.91 5.4 3.0

Research

Update

Industrials

Norcros — Strong anchors weather the storms

Update

Industrials

Norcros — New CEO likely to pursue existing strategy
norcros03

Industrials

Update

Norcros — UK margins up materially, South Africa stabilising

norcros03

Update

Industrials

Norcros — In-line update highlights undervalued entity

Update

Industrials

Norcros — Well placed to gain market share

Update

Industrials

Norcros — Key strengths undervalued, legacy issues fixed
norcros03

Update

Industrials

Norcros — Broadening the UK bathroom product offering

Update

Industrials

Norcros — Record revenue and EBIT in FY22

Update

Industrials

Norcros — Delivering progress

Update

Industrials

Norcros — Sure-footed progress

Update

Industrials

Norcros — FY21 profitability exceeds prior year
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