Slide 1: Norcros plc - Preliminary Results, Year ended 31st March 2011
Norcros plc - Preliminary Results Year ended 31st March, 2011 Page 1
Slide 2: Introduction
Page 2 Introduction John Brown Chairman
Slide 3: 2011: Highlights
2011: Highlights Page 3 Revenue growth +8.3% (LFL¹ at constant currency) Trading profit +60% at £11.7m (2010: £7.3m) Resilient performance from UK operations and SA Adhesive business Significant turnaround in SA tile manufacturing and retail Benchmark PBT² of £10.2m (2010: £3.4m) Disposal of Beaumon
Slide 4: Financial Review
Page 4 Financial Review Martin Payne Group Finance Director
Slide 5: Financial Highlights
Financial Highlights Page 5 Revenue and profit • Revenue of £196.1m, +15.6% (2010: £169.6m) – as reported • Revenue of £192.4m, +8.3% (2010: £177.7m) – LFL (52 weeks) at constant currency • Trading profit of £11.7m, +60.3% (2010: £7.3m) • Benchmark PBT of £10.2m, +200.0% (2010: £3.4m) Cash • Cash ge
Slide 6: Summary Income Statement
Summary Income Statement Page 6 2011 2010 £m £m % Revenue 196.1 169.6 + 15.6 Group trading profit 11.7 7.3 + 60.3 Other operating income / costs - 0.1 Group operating profit – pre exceptionals 11.7 7.4 + 58.1 Finance charges – cash (1.5) (4.0) Benchmark PBT 10.2 3.4 + 200.0 Exceptional operating ite
Slide 7: Revenue by Geographic Segment
Revenue by Geographic Segment Page 7 LFL revenue growth at constant currency in all LFL at constant currency +8.3% segments RoW £9.5m (£9.0m) • Group +£14.7m; +8.3% • UK +£9.2m; +9.0% SA £71.0m (£66.0m) UK £111.9m • SA +£5.0m; +7.6% (£102.7m) • RoW +£0.5m; +5.6% Reconciliation to reported growth £m
Slide 8: Summary Cash Flow
Summary Cash Flow Page 8 2011 2010 £m £m Cash generated from operations 10.8 10.6 Capex (6.3) (3.9) Disposal of businesses 4.4 - Net asset disposals & Dividends received - 0.1 Free cash flow, pre financing 8.9 6.8 Interest and tax (1.6) (3.0) Dividends paid (0.7) - Net proceeds from capital raising
Slide 9: Balance Sheet Highlights
Balance Sheet Highlights Page 9 2011 2010 Capex (£m) 6.3 3.9 Depreciation (£m) 6.6 6.7 Capex / Depreciation 0.95x 0.58x Net bank debt – before prepaid finance 12.4 18.9 costs (£m) Net bank debt/ Ebitda* 0.7x 1.3x * covenant basis Mature and well funded UK pension scheme – see further details in Appe
Slide 10: Operating Review
Page 10 Operating Review Nick Kelsall Group Chief Executive
Slide 11: Market Environment
Market Environment Page 11 UK Shower Market • YoY overall market -2.3% • Market still c. -20% from peak • Electric showers +1%; Mixers -7% • Electric outperformance driven by replacement activity UK Tile Market • Total market c. -5% • Market c. -25% from peak • Independent Retail / Housebuilder hard
Slide 12: UK Operations – Strong revenue growth reflecting market share gains
UK Operations – Strong revenue growth reflecting market share gains Page 12 Triton +9.0%¹ • Overall revenues +4.7%¹ - UK +5.7%¹; Exports -1.3%¹ • Strong growth in retail; share gains in key accounts • Solid performance in UK Trade (National and Independent Merchants) • Exports – resilient performanc
Slide 13: UK Operations – Resilient performance; Trading profit maintained
UK Operations – Resilient performance; Trading profit maintained Page 13 Triton • Revenue growth in challenging markets • Resilient profits and margins - Strength of new product introductions - Higher input costs offset by cost savings/operational efficiency - Increased investment in sales & marketi
Slide 14: South Africa - Revenue +7.6% driven by improved customer proposition
South Africa - Revenue +7.6% driven by improved customer proposition Page 14 TAF revenues +5.8%¹ • LFL retail sales +11.0%¹ +7.6%* • Increased ‘supply & fit’ projects • Higher brand awareness from focussed marketing • 19 stores now upgraded to Lifestyle format; closure of one underperforming store i
Slide 15: South Africa – Significant turnaround in performance
South Africa – Significant turnaround in performance Page 15 TAF • Significant reduction in trading loss - Benefit of operational leverage from higher revenues - Improved margins - Unprofitable store closures – 4 LY, 1 H1 2011 2010 2009 - Range improvements - Tight overhead control JTSA • Trading lo
Slide 16: Operational Initiatives
Operational Initiatives Page 16 • Continue to drive share gains across all product segments and customer channels • Comprehensive new product programme Triton • Increase share of Commercial and Care markets • Continue to drive benefit from value analysis and engineering programme • Maintain leading
Slide 17: Summary & Outlook
Summary & Outlook Page 17 Significant improvement in trading performance Strong financial position Dividends restored Significant increase in free cash flow following legacy lease exit Focus on - Market share gains in UK businesses - Driving opportunities for Triton and UK tiles in Specification sec
Slide 18: Appendices
Appendices vr | DHESIV UNIVERSAL LEVELLING com ——PMOCELAIN DHESIVE KZ NOPcros He ADHESIVES py> PORCELAIN BAR ADHESIVE PRO 50 LEVELLING COMPOUND
Slide 19: UK Pension Scheme
UK Pension Scheme Page 19 Assets under management - £362m £m 20 Mature Scheme; 10,600 members • Pensioners (62%), Deferred (34%), Actives (4%) 13.4 • Average age of pensioners is 75 10 10.0 6.6 Investment Strategy • Conservative asset allocation; 37% absolute return 2.3 1.3 funds, 23% equities, 20%
Slide 20: Analysis of Exceptional Operating Items
Analysis of Exceptional Operating Items Page 20 2011 2010 £m £m Profit on disposal of investment (Beaumont Tiles) 2.7 - IAS 19 past service credit (UK Pension Scheme) 0.4 - Increase in legacy leasehold provision – Springwood Drive (2.0) - Increase in legacy leasehold provision – Other (2.2) - Impair
Slide 21: Legacy Leasehold Obligations
Legacy Leasehold Obligations Page 21 Braintree – Springwood Drive • Original lease expiry 2017 • Lease surrender May 2011; cash cost £7.8m • Annualised cash savings c. £3.3m Swindon – Light Industrial Units • Lease expiry 2014 • Occupied to lease expiry • Current cash shortfall against rental income
Slide 22: Net Debt Reconciliation
Net Debt Reconciliation Page 22 2011 2010 £m £m Net debt – statutory (10.6) (15.9) Prepaid finance costs (1.8) (3.0) Net debt before prepaid finance costs (12.4) (18.9)