Interim Management Statement

RNS Number : 2153L

Norcros PLC

28 July 2011

 



Norcros

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

Interim Management Statement

Norcros, the home consumer products group, publishes its Interim Management Statement covering the 13 week period to 3 July 2011 ahead of its Annual General Meeting to be held at 11.00am today at Ladyfield House, Station Road, Wilmslow, Cheshire, SK9 1BU.

Overview

Group revenues for the 13 week period increased by 10.0% and by 8.6% on a constant currency basis relative to the comparable period last year, in line with market expectations. This was despite the challenging market conditions experienced in the UK and South Africa.

UK

Our UK businesses have continued to perform resiliently and grown revenues by 10.2%.

Johnson Tiles, a leading UK manufacturer and supplier of ceramic tiles, saw revenues increase by 19.5% in the period. UK revenues increased by 25.5% reflecting the success of new product introductions and additional business gained following the failure of a major UK competitor last year. Export revenues, representing c.13% of Johnson Tiles' total revenues, were 10.0% lower principally reflecting the strategy of focussing on a smaller number of key markets and improving margins.

Triton, the UK market leader in domestic showers, saw revenues for the period in line with last year. UK revenues declined by 1.8% with growth in the retail sector more than offset by reduced activity in the trade sector. Export revenues, which represent c.16% of Triton's total revenues, increased substantially even with no discernible improvement in the Irish market, Triton's biggest export market.

Revenues in our UK adhesives business were 37.5% higher than the comparable period last year reflecting the continued progress of this division.

South Africa

Overall revenues were 11.2% higher on a reported basis and 8.7% higher on a constant currency basis.

Revenues at our retail operation, Tile Africa, increased by 3.4% on constant currency basis, reflecting the continued progress made in improving the product offering and the benefit of our store refurbishment programme.

Johnson Tiles South Africa, our tile manufacturing operation, saw total revenues on a constant currency basis 2.4% lower. Destocking at Tile Africa as a result of working capital efficiencies constrained inter group sales, but this was partially offset by a 31.3% increase in independent sector revenues (customers outside Tile Africa) reflecting the benefit of new listings and a significant increase in export business.

TAL, our adhesive operation, performed robustly relative to the market, reflecting the strength of the product offer and the technical service support. Revenues were 14.6% ahead of last year on a constant currency basis.

Exit of legacy lease obligations

As previously announced on 31st May 2011, the Company entered into and completed an agreement with CIP Property (AIPT) Limited, Computacenter (UK) Limited, and Digica Group Finance Limited to exit its lease obligations at Springwood Drive, Braintree, Essex. Under the terms of the agreement Norcros has made a total cash payment including costs of approximately £7.8m, with an anticipated annual cash saving of approximately £3.3m following the surrender of this lease. 

Outlook

Conditions in our principal markets remain challenging and the timing of any upturn remains uncertain. In the UK, government expenditure cuts are impacting our public sector contracts market, and the effects of tax increases and lower consumer confidence are being felt in our retail markets. In South Africa, macroeconomic data remains mixed and shows no clear improving trend with the latest data on building completions showing a year on year decline of 19%. Against this background, management continues to focus on its "self-help initiatives" of driving increased revenues and offsetting input cost increases, as well as delivering the benefits of the operational improvement programmes in South Africa. As a result we are confident of making further progress in this financial year.

28 July 2011

ENQUIRIES:

Norcros plc	Tel: [phone]
Nick Kelsall, Group Chief Executive
Martin Payne, Group Finance Director
College Hill	Tel: [phone]
Mark Garraway
Helen Tarbet

For further information please visit the Company website:

www.norcros.com

 

END

 

 

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