Norcros UK group sales up 16.5%

Financial results buoyed by "strong" performances from Merlyn and Triton, as well as Johnson Tiles return to profitability

16 Nov, 18

Bathroom and kitchen group Norcros has reported revenue up 12.1% to £162.6million, in its financial results for six months ended in September 30, 2018 against a “challenging market environment”.

Its underlying operating profit increased by 29.9% to £15.2million from £11.7million in the previous year.

Norcros UK revenue up 16.5%

Norcros operates through seven brands in the UK: Triton, Merlyn, Vado, Croydex, Abode, Johnson Tiles and Norcros Adhesives.

Its UK business achieved revenue of £109.9million, representing growth of 16.5%, which included a contribution of £19.5million from Merlyn.

On a like-for-like basis, excluding Merlyn which was acquired in November 2017, total revenue was 4.1% lower than the previous year.

Norcros reported this was “largely due to significantly lower retail revenues at Johnson Tiles”, which was due to the Kingfisher unified programme.

Johnson Tiles apart, the first half UK like-for-like revenue was 2.5% higher.

Underlying operating profit grew by £4million to £11.4million, with an operating margin of 10.4%.

Triton

Shower manufacturer Triton recorded a revenue growth of 9.8% up to £26.9million, which built on the growth of 7% last year.

UK revenue was 10.7% higher than the previous year, with growth in the retail, online and trade channels.

Norcros said this reflected new product introductions, strong promotional activity and range listing gains across national customers.

Triton also grew its export markets up 6.1% on the previous year.

Merlyn

Showering surround manufacturer achieved a revenue of £19.5million, with a growth of 13.4% on the previous year before it was owned by Norcros.

Its trade sector revenue grew 20% with the specification channel being its main driver in sales, in addition to contracts awarded the previous year.

Wolseley is extending its Merlyn offer and the product is now on display in City Plumbing Supplies, plus the brand has also won an account with Bloor Homes.

UK retail revenue grew 9.4%, which Norcros stated was driven by the roll-out of new product ranges, and revenue in Ireland grew 12%.

Vado

Celebrating its 30th anniversary brassware manufacturer Vado recorded revenue of £19.7million, which was 5.3% lower than the previous year.

UK revenue grew by 6%, with “strong” progress in the trade sector where Vado achieved 15% growth in specification.

However, export declined by 35% on the prior year, where Norcros stated the market for non-Vado branded products were more challenging despite Vado branded products demonstrating “strong growth”.

Croydex

Supplier of bathroom furnishings and accessories Croydex reported revenue of £10.8million, 12.2% lower than last year.

It’s revenue performance was affected by the performance and subsequent change in ownership of major customer Homebase Bunnings.

Norcros states offsetting this was a “robust performance” in the trade sector where revenue grew by 5.4% from national merchant groups and new product listings at Screwfix.

Additionally Croydex sales grew “significantly” through online and e-commerce channels.

However, underlying operating profit was “markedly lower” than last year, reflecting the reduction in UK revenue.

Abode

Sink, shower and tap manufacturer Abode recorded a 12.3% increase in revenue to £7.3million.

The business grew revenue across trade, retail and export sectors which Norcros stated reflected a “comprehensive programme of new product introductions and range enhancements”.

Continued investment in retail displays has expanded its retail footprint to over 900 showroom displays across the UK and Ireland, including John Lewis.

It also rolled out Abode and Pronteau branded products to Wickes and Benchmarx stores and “early results are encouraging”.

In addition, underlying operating profit was ahead of last year, reflecting “strong” revenue growth.

Johnson Tiles

Ceramic tile manufacturer Johnson Tiles recorded revenue 21.7% lower than the same period last year at £20.2million.

UK retail revenue was 35.7% lower than last year, which Norcros stated was principally because of the Kingfisher unification programme.

In the retail sector, ranges introduced in Wickes “performed well” with revenue from this account increasing by 5%.

UK trade sector revenue was 11.6% lower than last year, resulting from softer market conditions, a decline in social housing and exit of marginal business.

In addition, softer market conditions in France and exiting of low margin products in the Middle East impacted export revenue which was 8% lower.

Due to a restructuring programme to cut costs and exit low margin business, Norcros reported Johnson Tiles has returned to profitability.

Norcros Adhesives

Supplier of tile and stone adhesives Norcros Adhesives recorded revenue of 25% higher than the previous year at £5.5million.

Revenue grew 31% in the retail sector, reflecting share gains in Wickes and Travis Perkins.

UK trade revenue also grew 7.7% with growth through B&Q Tradepoint and the direct fixer segment.

Underlying profit was lower than the previous year which reflected investment in sales resource and new business development in the UK and the Middle East.

Chairman of Norcros Martin Towers commented: “I am pleased to report a robust set of results for the six months ended September 30, 2018 in what has been a challenging market environment.

“This performance continues to demonstrate the strength of our market positions, our leading brands and the financial resilience of our diversified business model.

“The board remains confident that these attributes will continue to drive market outperformance and will enable the group to make further progress in line with its expectations for the year to March 31 2019.”