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Currency in GBP
Last close As at 28/03/2023
GBP1.87
▲ 7.50 (4.18%)
Market capitalisation
GBP160m
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.
In the UK housing market’s recovery phase from the impact of the COVID-19 pandemic, repair, maintenance and improvement has clearly been the stronger sub-sector. UK newbuild fundamentals remain favourable also. Similar trends have been seen in South Africa. The commercial sub-sectors generally remain subdued.
Industrials
Industrials
Director, Financials & Industrials
James Eyre
CFO
Nick Kelsall
CEO
Forecast net debt (£m)
51.4
Forecast gearing ratio (%)
22
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | (10.1) | 5.1 | (29.4) |
| Relative | (5.7) | 4.0 | (28.7) |
| 52 week high/low | 270.0p/165.0p |
Norcros’s interims highlighted a solid H1 performance, and although we have reduced our estimates to reflect a weaker outlook into FY24, we believe that Norcros’s proven strategy remains on track, which should allow it to unlock significant market share opportunities. We also believe that its key strengths are undervalued and that most, if not all, of the legacy issues, particularly the pension deficit, have been resolved. We reduced our valuation from 314p per share to 252p implying c 20% upside, but acknowledge there is upside to estimates from a market recovery when it materialises.
| Y/E Mar | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
|---|---|---|---|---|---|---|
| 2021A | 324.2 | 39.2 | 27.4 | 29.58 | 6.2 | 3.8 |
| 2022A | 396.3 | 47.0 | 38.6 | 37.99 | 4.8 | 3.2 |
| 2023E | 448.9 | 53.6 | 41.8 | 35.86 | 5.1 | 3.0 |
| 2024E | 462.6 | 52.4 | 38.9 | 32.89 | 5.6 | 3.1 |
