Norcros (LSE:NXR), the UK and Ireland's bathroom products business, said on Thursday that it expects full-year underlying operating profit to be in line with market expectations, even as it flagged subdued conditions across its key markets through the second half.
The trading update covering the 26 weeks to 4 October, issued ahead of interim results due on 19 November, revealed that revenue is expected to rise 19% to approximately £220m, up from £184.3m a year earlier, while like-for-like constant currency revenue growth came in at 1.5% on a same-number-of-weeks basis.
Underlying continuing operating profit is expected to increase to at least £24.6m, it added, up from £21.9m in the prior first half, with cash conversion remaining above the company's published target levels.
Europe, including the Fibo business acquired a year ago, and South Africa performed well, Norcros said, with that strength partially offset by softer UK demand, particularly in the second quarter.
The company said it had again secured price increases, most of which were embedded towards the end of the first half with full benefits expected in the second half, and confirmed the previously announced process to potentially dispose of its South African operations is progressing to plan.
Closing net debt (on a pre-IFRS 16 basis) is expected to be approximately £55m, down from £65.8m at 5 April, with leverage at approximately 1.1 times underlying EBITDA, against 1.6 times immediately following the Fibo acquisition.
Norcros told investors that it expects to grow market share in tough conditions through supply chain resilience, service levels and disciplined cost management, as it has done previously.