Norcros says operating margin target is within reach as sales increase

Norcros PLC on Thursday boosted its dividend as it reported higher annual sales and profits supported by a strong performance from European operations.

The Wilmslow, Cheshire-based supplier of bathroom and kitchen products said pretax profit ballooned to £14.9 million in the 53 weeks to April 5 from £3.3 million the year prior, as revenue rose 11% to £393.4 million from £355.8 million.

The bottom line benefited from a decline in acquisition and disposal related costs to £13.1 million in the financial year from £25.4 million the year prior.

Underlying pretax profit climbed 8.2% to £40.9 million from £37.8 million on-year, with underlying earnings per share of 35.8 pence, up 7.2% from 33.4p.

Group operating margin at 12.2% was down on-year from 12.5%, as expected, following the Fibo Holding AS acquisition.

But Norcros said its underlying operating profit margin target of 15% is ‘well within our reach, and we expect to deliver this in the medium term as Fibo margins improve and we find new shareholders for our remaining South African assets.’

Norcros completed the £46 million acquisition of Oslo-based Fibo last October. While last June, Norcros said it had completed the closure of its tile manufacturing plant at Johnson Tiles South Africa.

Chief Executive Thomas Willcocks said: ‘The past year has been pivotal for Norcros as we delivered another strong set of results alongside significant strategic progress to reshape and strengthen the group for the long term. We have seen a strong performance across our core European markets supported by the successful acquisition of Fibo in Norway.’

Group revenue in the two months to the end of May was 3.1% ahead of the prior year on a constant currency like for like basis, adjusting for Johnson Tiles South Africa and the acquisition of Fibo.

‘Market conditions are likely to remain subdued, with the pace of any recovery in the new build sector still unclear,’ the firm said.

The mid-premium repair, maintenance, and improvement sector currently remains more ‘resilient’ and expectations for financial 2027 are unchanged.

The full-year dividend was boosted 8.7% to 11.3p per share from 10.4p the year prior. This includes a final dividend of 7.6p per share, up from 6.9p.

Shares in Norcros rose 2.7% to 270.00p each in London on Thursday morning.

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