Conditional agreement to dispose of subsidiary

RNS Number : 0493D

Norcros PLC

25 March 2014

 



25 March 2014

Norcros

("Norcros", the "Group" or the "Company")

Conditional agreement to dispose of subsidiary

Norcros, the market leading supplier of innovative branded showers, taps, bathroom accessories, tiles and adhesives, today announces that it has entered into a conditional agreement to sell 100% of the issued share capital of Norcros Industry (Pty) Ltd. (NIPL) which owns the Group's Australian tiles business, Johnson Tiles (Pty) Ltd. to Kim Hin Industries Berhad (KHIB), a company listed on the Malaysian Bursa.

Highlights:

·      The total consideration of A$7.55m (£4.2m¹) is on a debt and cash free basis subject to a normalised working capital adjustment on completion. The consideration is payable in cash on completion. The Group intends to use the proceeds from the transaction to pay down existing borrowings.

·      For the year ending 31 March 2013, NIPL reported revenue of A$15.9m, operating profit of A$0.3m, EBITDA² of A$0.5m, and gross assets of A$12.4m.

·      This transaction will generate a non-cash loss of approximately £1.6m¹ which will be disclosed as part of the result from discontinued operations in the year ending 31 March 2014.

·      The disposal is conditional upon KHIB gaining shareholder approval for the transaction, for which it is required to issue a shareholder circular under Malaysian Bursa listing rules. Irrevocable undertakings of support from KHIB's largest shareholder representing approximately 61% of the share capital of KHIB have been received. It is anticipated that completion will occur no later than 31 May 2014.

Commenting on the disposal, Nick Kelsall, Group CEO said "The disposal of our Australian business represents a full exit from the region, and allows the Group to focus its resources on its strategic objectives of organic and acquisitive growth in the UK, Africa and the Middle East."  

(1)   Using the exchange rate as at 24 March of £1=A$1.81

(2)   EBITDA is defined as operating profit before depreciation and amortization

ENQUIRIES:

Norcros plc	Tel: [phone]
Nick Kelsall, Group Chief Executive
Martin Payne, Group Finance Director
Hudson Sandler	Tel: [phone]
Nick Lyon
Charlie Jack
Katie Matthews

Notes to Editors

·    Norcros is a leading supplier of high quality and innovative showers, taps, bathroom accessories, ceramic wall and floor tiles and adhesive products with operations primarily in the UK and South Africa.

·    Based in the UK, Norcros operates under four brands:

·     Triton Showers - Market leader in the manufacture and marketing of showers in the UK

·     Vado - A leading manufacturer and supplier of taps, mixer showers, bathroom accessories and valves

·     Johnson Tiles - A leading manufacturer and supplier of ceramic tiles in the UK

·     Norcros Adhesives - Manufacturer of tile & stone adhesives, grouts and related products

·    Based in South Africa, Norcros operates under three brands:

·     Tile Africa - Chain of retail stores focused on ceramic and porcelain tiles, and associated products such as sanitary ware, showers and adhesives

·     Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles

·    TAL - The leading manufacturer of ceramic and building adhesives

·    Norcros is headquartered in Wilmslow, Cheshire and employs around 1750 people. The Company is listed on the London Stock Exchange. For further information please visit the Company website: http://www.norcros.com/

 

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