FY16 was a year of strategic and financial progress for Norcros Plc (LON:NXR), with improved profit contributions from both reporting regions and two acquisitions completed. Q117 trading is in line with previous FY17 group guidance and we expect further profit progress over our three-year forecast horizon. UK RMI exposure appears to be out of favour with investors currently, but acquisitions and other regional earnings are positive differentiators not reflected in the rating in our view.
FY16 results ahead
FY16 PBT came in over £1m ahead of our estimate. Higher than expected EBIT outturns in both the UK and South African divisions (better margin recovery at tile manufacturing operations in both countries) contributed to this, as did lower net interest costs. The product was double-digit EPS and DPS progress in the year, which also included a part year contribution from Croydex (acquired in June), but nothing from Abode (acquired at the year end). These deals – with aggregate initial cash consideration of c £24m – were funded from existing bank facilities and resulted in an increase in net debt to £32.5m at the end of March.
To read the entire report Please click on the pdf File Below