Merlyn showers keep Norcros sales above water

Cheshire bathroom firm Norcros said total UK sales were up almost a fifth (19.2%) in the 13 weeks to 1 July on the back of a strong performance at Merlyn.

Norcros, which also owns Vado, Croydex and Johnson Tiles in the UK, bought shower enclosure maker Merlyn last November for £60 million.

Excluding Merlyn, the firm said UK sales were down 3.4% as performance challenges at Johnson Tiles still weigh on the business, while group sales without Merlyn rose 0.9%.

The firm’s South African business grew revenue by 8.5% in sterling terms and 8.9% at constant currency.

Nick Kelsall, group chief executive, said: “Our performance in the first quarter continues to demonstrate the resilience of our focussed and diversified business model.

“While the UK retail sector continues to be challenging, strong performances at Triton and Merlyn, the benefits of the cost restructuring at Johnson Tiles and the sustained progress in South Africa gives the board confidence that the group will continue to make progress in line with its expectations for the current year.”

Last year, the firm launched a restructuring programme at Johnson Tiles UK to “significantly” cut costs. As part of this, 90 jobs were made redundant. 

In an April trading update ahead of its annual results this year, Norcros said that the Stoke-on-Trent business continued to be loss-making as a result of more-challenging-than-expected market conditions. A further restructuring programme, which it said would lead to an annualised saving of £2m, was announced with the loss of a further  50 jobs.

It said the cost of the restructuring programme would be £2.1m booked as an exceptional item in its financial results ended 31 March 2018 with the subsequent cash outflow occurring in the first half of 2018-19.

At year end, net debt at Norcros was expected to be £48m, almost double on the £23.2m reported the year before.

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