19th Jun 2014 08:31
LONDON (Alliance News) - Norcros PLC Thursday reported higher profits for its last financial year, driven by strong revenue growth, prompting the company to raise its dividend by 11%.
The supplier of branded showers, taps, bathroom accessories, tiles and adhesives raised its total dividend for the year by 11% to 0.51 pence per share, after delivering a strong set of financial results for the year just ended.
Norcros said that while UK construction activity and an improving housing market is driving a trade sector recovery, the UK retail sector is taking longer to reap the benefits.
Going forward, Norcros said the medium-term outlook in South Africa is positive, although sterling strength is a headwind,
"Nevertheless, with our strong brands, leading market positions and continued self-help initiatives focused on market share gain, the board remains confident that the group should continue to make progress for the year to 31 March 2015," the company said in a statement.
Norcros posted a pretax profit of GBP5.8 million for the year ended March 31, up 13% on the GBP5.2 million profit it reported a year earlier. Profit growth was driven by a 9.2% increase in revenue to GBP218.7 million from GBP200.4 million the prior year. On a constant currency basis, revenue grew 17%. Norcros said revenue and profit also were boosted by the acquisition of its UK Vado business in March 2013.
Chairman Martin Towers said the group recorded its fifth consecutive year of revenue and underlying operating profit growth, which was achieved despite mixed market conditions in the UK and a challenging environment in South Africa.
"Underpinned by our strong brands, leading market positions, and continued self-help initiatives focused on market share gain and operating efficiencies, I look forward to the future with confidence," said Towers.
Norcross said it continues to make progress towards its strategic targets of doubling revenue to GBP420 million by 2018 through both organic and acquisitive growth, and achieving an underlying return on capital employed between 12% and 15%.
Since year end, the company disposed of its Australian tiles business, Johnson Tiles, to Malaysian company Kim Hin Industries Bhd for AUD7.55 million.
The deal leaves Norcros completely focused on the UK, Africa and the Middle East.
"We will continue to seek out opportunities to expand the group through a combination of organic growth initiatives and acquisition of businesses in our target geographies and product groups," the company said in a statement.
Norcros shares were up 1.4% at 18.75 pence Thursday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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