Norcros Group has reported a “strong” performance in its latest trading update for the first half of the year to October 4.
That was despite Q1 revenues that were down 38% on last year because of the coronavirus pandemic. Then, as that pent-up demand kicked in, Norcros sales rose in Q2 to 104% on a like-for-like basis.
Norcros is the parent company for KBB companies Abobe, Croydex, Johnson Tiles, Merlyn, Triton and Vado as well as Norcros Adhesives. It also operates in South Africa.
Its H1 interim results will be filed on November 12, but in its update it said it was expecting group revenues for the 26 weeks to October 4 of around £135.3 million compared with £181.2m for the previous year. It predicted an underlying group profit figure of £12m, against £17.1m for H1 2019.
For its UK business, Norcros said it continued to perform strongly and expected to report H1 revenue of around £93.7m, against £115.6 for H1 2019, which it said equated to 84% of last year’s revenue on a like-for-like basis. It reported a particularly strong recovery in the second quarter, with business at 104% of 2019 levels, whereas Q1 was lagging last year at just 62%.
In its South African business (Tile Africa, TAL and House of Plumbing), it anticipated revenues of £41.6m (£65.6m in 2019).
The statement said that as a result of its cost alignment and cash preservation strategies, it expected its net debt to have reduced to £8m from the £36.4m reported at the year end (March). Nonetheless, the group is not expecting to declare an interim dividend.
Commenting on its financial outlook, the statement said: “Our businesses have adapted swiftly to ensure that they operate safely and cost-effectively and have recovered strongly from the initial impact of the pandemic.
“Notwithstanding the ongoing uncertainty, as governments seek to control Covid-19, Norcros continues to be in a very strong competitive and financial position. Given this, its leading market positions, established brands, broad distribution channels and experienced management team the group remains well positioned to sustain the strong progress and recovery of the second quarter.”
For its full year to March 2020, Norcros Group reported total revenue of £342m, up 3.3% on the year before, and underlying operating profit of £32.3m. This marked 11 consecutive years of revenue growth.
Norcros Group is based in Wilmslow, Cheshire, and employs around 2,000 people.