The Norcros Plc (LON:NXR) H119 pre-close update reiterated management’s expectations for progress in FY19. Trading newsflow was similar to that reported in Q1 – with a good uplift to UK EBIT anticipated for H119 and a growing South African top-line – albeit with an implicitly slightly quieter second quarter. Brand presence, coupled with product and channel diversity, appears to be supporting ongoing progress in variable market conditions. Our estimates are unchanged and H119 results are scheduled for 15 November.
Good UK EBIT uplift anticipated for H119
A c £19m maiden H1 revenue contribution from Merlyn with above UK average divisional margins is likely to be a key trading highlight when the interim results are reported. While Johnson Tiles’ revenues will be lower y-o-y – reducing B&Q sales exposure – a recovery to profitability, following its restructuring should also provide a boost to EBIT. Apart from these specific features, organic revenue growth from the other UK portfolio companies collectively was c 2.5% in H1. Trade remains the most resilient sub-sector, especially in the residential new build supply chain while retail channels have been more challenging (eg in DIY with Homebase) and export markets variable.
To read the entire report Please click on the pdf File Below: