14th Jun 2016 08:19
LONDON (Alliance News) - Norcros PLC on Tuesday posted rises in both profit and revenue for its recently ended financial year, and hiked its dividend by 18%, saying that it looks in line to achieve its medium-term strategic objectives.
The bathroom supplier posted revenue of GBP235.9 million for the year ended March 31, up from GBP22.1 million a year earlier, driving a 40% increase in pretax profit to GBP15.4 million from GBP11.0 million.
This, Norcros said, reflected a "significantly improved" performance from its Johnson Tiles UK business, which swung to profit on production efficiencies, as well as a first time contribution from the bathroom furnishing business Croydex Group Ltd, which was purchased last June and generated GBP17.2 million in revenue for the nine months to end-March.
Norcros said the UK market has continued to be mixed throughout its year, as new house build and housing transactions remained robust but there was a "noticeable slowdown" in public sector spending during the second half of the year "as government spending cuts began to bite".
Norcros said fragile consumer confidence and specific sector challenges impacted performance in the DIY retail channel. However, UK revenue increased to GBP163.0 million, from GBP149.1 million.
In its South African division, Norcros reported progress, with revenue 15% higher on a constant currency basis, but broadly flat on a reported basis due to the weakening of the rand against the pound, at GBP72.9 million from GBP73.0 million.
Norcos said it was offering a full year dividend of 6.60 pence per share, up from the 5.60p offered a year earlier.
Norcros said it is confident of achieving its medium term objectives in light of the results, of doubling group revenue to GBP420.0 million for the financial year beginning in April 2018, to maintain revenue derived outside the UK at around 50% of group revenue and to sustain a pretax return on underlying capital employed of 12% to 15% over the economic cycle.
"The result reflects the successful acquisition strategy and the sustained focus on driving organic growth through market share gain, investment in new products, operational efficiency programmes and geographic expansion. The recent acquisitions, together with our developing pipeline, give me confidence that we can achieve our medium-term strategic objectives," said Chairman Martin Towers.
Shares in Norcros were up 4.0% at 179.90 pence on Tuesday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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