Norcros backs consensus as first-half sales grow, notes challenges

Norcros PLC on Thursday gave an upbeat review of first-half trading, with European sales softening the blow of lower UK demand, and backed full-year market expectations, though it predicted challenging conditions to come.

The Wilmslow, Cheshire-based supplier of bathroom and kitchen products reported that revenue grew 19% in the 26 weeks ended October, to an estimated £220 million from £184.3 million on-year, with the prior year's comparative period being 27 weeks long.

On a like-for-like basis, at constant exchange rates, growth was more moderate, at 1.5%, on the basis of the same number of weeks.

Underlying continuing operating profit is expected to have risen to at least £24.6 million from £21.9 million, and according to Norcros, cash conversion has been ahead of its existing targets.

Norcros noted that its trading in South Africa and Europe, including recent acquisition Fibo Holding AS, was strong, but "partially offset by softer UK demand, particularly in Q2".

The company sealed its all-debt takeover of Oslo-based Fibo for £46 million in October 25, after the deal was cleared by the UK competition watchdog.

Norcros on Thursday said it was making headway with its strategic goals, which include developing new products and streamlining the business. Plans to possibly exit operations in South Africa are in progress, it noted.

The company is eyeing a boost from price hikes, most of which were embedded in the first half, but which Norcros expects to fully realise in the second half.

In terms of its balance sheet, Norcros sees itself as "supported by excellent cash generation", in part thanks to buying Fibo last year. It ended the first half with net debt of about £55 million, reduced from £65.8 million at April 5. Leverage stood at about 1.1 times underlying earnings before interest, tax, depreciation and amortisation at the end of the first half, compared with 1.6 times immediately after the Fibo acquisition.

The company flagged expectations for a challenging trading backdrop going into the second half, though it remained confident in its prospects.

Norcros sees full-year results tracking in line with market consensus, which it cited as underlying operating profit of £54.0 million - about 13% higher on-year. In financial 2026, this metric was 7.9% ahead of the year prior at £48.0 million.

"Conditions in our key markets are expected to remain subdued through the second half. Norcros is well positioned with leading branded market positions and has traditionally grown market share in tough market conditions. We do this through leveraging our supply chain resilience, excellent service levels, proven ability to recover input cost increases and disciplined cost management," it said.

Norcros shares rose 4.9% to 302.00 pence each on Thursday afternoon in London, and are up 4.5% over the past year.

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