Higher revenues, EBIT margins, EPS and DPS represented a good first-half trading performance from Norcros (L:NXR). Moreover, each of the operating businesses contributed to this. With increased estimates in all three forecast years, single-digit valuation multiples already offer good value and there is potential for more.
H116 results reflect UK and South African progress
Delivering increased profit at all seven of its existing operating businesses (four in the UK and three in South Africa) in variable market conditions represented a strong H116 performance from Norcros. We believe that improved contributions from tile manufacturing operations – in the UK and South Africa – as being particularly important to the result. We also note good ongoing revenue growth in adhesives – again in both regions – though this is comparatively small in UK terms currently. The addition of Croydex during the period provided a further boost to reported earnings. Period-end net debt stood at £29.2m with healthy underlying net cash inflow partly offsetting acquisition-related cash outflow during H116.
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