Norcros annual underlying operating profit flat
By Josh White
Date: Thursday 12 Jun 2025
(Sharecast News) - Norcros reported flat annual underlying operating profit on Thursday, despite a decline in revenue, as strong execution and improved margins in its core UK and Ireland business helped offset weaker trading in South Africa and the impact of divestments.
Revenue for the year ended 31 March fell 6.1% to £368.1m, though on a constant currency like-for-like basis it rose 0.9%.
Underlying operating profit was unchanged at £43.2m, with the underlying margin improving to 11.7% from 11.0%.
Statutory operating profit dropped 79.2% to £8.3m, reflecting exceptional charges.
The London-listed bathroom products specialist said the UK and Ireland delivered a record underlying profit of £39.8m, up from £38.4m, with margins rising to 15.5%.
Performance in South Africa remained under pressure, with profit down to £3.4m from £4.8m, though Norcros said the business was positioned to benefit from market recovery.
The group continued to streamline its portfolio, selling Johnson Tiles UK in May last year and progressing a strategic review of its South African tile business.
It also expanded into complete bathroom ranges and improved cross-selling, while advancing distribution efficiency and ESG initiatives.
Underlying pre-tax profit edged up 0.3% to £36.5m, while diluted underlying earnings per share rose 0.9% to 32.4p.
The full-year dividend was lifted to 10.4p per share from 10.2p.
Underlying net debt stood at £36.8m, broadly flat on the prior year, representing a leverage ratio of 0.8x.
Looking ahead, Norcros reaffirmed its medium-term targets, including a 15% group operating margin and return on capital above 20%.
Current trading showed group revenue down 1.8% in the first two months of the new financial year, but the company left its expectations for the 2026 financial year unchanged despite continued market uncertainty.
"In the context of current market challenges, I am pleased with the performance over this period and excited by the significant opportunities that remain in the more resilient mid-premium market segments where we hold leading positions," said chief executive officer Thomas Willcocks.
"Our strategy is working and has momentum, building from a position of strength and scale as we actively leverage the customer and operational synergies within the group."
Willcocks said the firm's continued progress across its four key strategic pillars was delivering, as demonstrated by its operating margins in its core UK and Ireland markets moving above 15% for the first time.
"Whilst we are beginning to see some early evidence of a level of confidence starting to return to the sector, especially in new build, we are not reliant on any major recovery to deliver further progress against our medium term targets and as a result, the board's expectations for the 2026 financial year remain unchanged."
At 1134 BST, shares in Norcros were down 3.37% at 258p.
Reporting by Josh White for Sharecast.com.
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