Norcros warns coronavirus will cause profit to miss forecasts
By Sean Farrell
Date: Thursday 20 Feb 2020
(Sharecast News) - Norcros warned annual profit would miss expectations because of disruption to deliveries from China caused by the coronavirus epidemic.
In a trading update the company said it had suffered little impact from the coronavirus outbreak so far because it had enough stock but that its suppliers in China were not returning to production as quickly as expected. It said the shortage of products would dent sales in the important spring trading period.
"We do now envisage that the supply chain disruption is likely to have some impact on the seasonally important remainder of this financial year and early next," Norcros said. "In the short term it is now expected that underlying profitability for the year to 31 March 2020 will be below market expectations albeit ahead of last year."
Norcros shares fell 13% to 253.3p at 09:38 GMT.
The maker of Triton showers and Abode taps and sinks is the latest UK business to warn about the effects of coronavirus after the Chinese authorities closed factories that supply parts and products.
Tekmar said on Tuesday its expected profit growth would be wiped out as it was forced to buy more expensive parts from Europe after shipments from China stopped. The UK accounting regulator has told companies to be rigorous in reporting risks caused by coronavirus.
Norcros also reported disappointing trading in South Africa where construction output fell sharply at the start of the company's fourth quarter. The business is cutting costs and Norcros expects underlying annual profit in South Africa to be slightly higher than a year earlier.
The company said it had continued to gain market share in the UK and South Africa despite difficult conditions. UK revenue growth has continued at a similar rate to the first half but with subdued export performance. Norcros said it was monitoring the effect of coronavirus and that it was confident about its long-term future.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN