7th Oct 2014 06:54
LONDON (Alliance News) - Norcros PLC Tuesday said its performance in the first half is in line with its expectations, with pretax profit expected to be ahead year-on-year despite revenue taking a hit from the weak South African rand.
The supplier of branded showers, taps, bathroom accessories, tiles and adhesives said pretax profit for the 26 weeks to September 30 is expected to increase year-on-year to GBP6.7 million, from GBP5.9 million a year earlier.
The rise is expected to come in spite of the weak South African rand, which meant its reported revenue for the period is expected to be down 2.4% to GBP108 million, against GBP111.2 million last year. On a constant currency basis, the company said revenue grew 3.2% year-on-year.
UK revenue in the second quarter was up 1%, leaving first half revenue broadly flat for the company. Its Triton business posted a 1.2% rise in revenue in for the half-year, while its Vado business saw revenue flat in the half-year as its second quarter revenue jumped 6.2%.
First half revenue for Johnson Tiles was down 3.7% on the back of weak retail sector and export revenues, which offset a robust trade sector performance, Norcros said.
But conditions in its South African business remain "challenging", the company said, with the weak rand meaning its reported first-half revenue fell 6.7%. On a constant currency basis, first-half revenue for South Africa was up 11%, it said.
The company also noted the strike at the Johnson Tiles manufacturing facility in South Africa in the first half has now been resolved. It said the plant continued to operate normally during the strike.
The group said it is confident on its medium-term outlook, though it said any further devaluation of the rand would hold back revenue growth in South Africa as reported in sterling.
By Sam Unsted; [email protected]; @SamUAtAlliance
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