Slide 1: Norcros plc - Interim Results
Norcros plc - Interim Results Six months to 30th September, 2007
Slide 2: Introduction
Introduction John Brown Chairman 2
Slide 3: 2007 H1: Highlights
2007 H1 : Highlights • Significant increase in trading performance • Sales +7.4% at constant currency • Listed July 2007; net debt significantly reduced • Profit before tax and exceptionals +48.8% • Strong operating cash generation • Interim dividend of 0.56p per share • Trading since the end of Sep
Slide 4: Financial Review
Financial Review Nick Kelsall Group Finance Director 4
Slide 5: Financial Highlights
Financial Highlights • Revenue and profit growth across all regions – Revenue of £84.3m, +7.4% at constant currency (2006: £78.5m) – Trading profit of £9.2m, +17.9% at constant currency (2006: £7.8m) • Profit before tax, exceptionals and legacy PE finance costs; £7.2m • Strong cash generation – Cash
Slide 6: Summary Income Statement
Summary Income Statement H1 H1 2007 2006 Change £m £m £m % Revenue 84.3 81.2 +3.1 +3.8 Group trading profit 9.2 8.0 +1.2 +15.0 Other operating income 0.1 0.2 Group operating profit 9.3 8.2 +1.1 +13.4 Share of profit from associates 0.1 0.3 Net finance costs (2.2) (4.4) Pro forma PBT - underlying 7.2
Slide 7: Revenue Growth
Revenue Growth RoW £3.2m (£2.8m) SA £27.6m Revenue growth across all segments (£26.8m) UK £53.5m (£51.6m) Strong underlying growth in constant currency As reported + 3.8% – UK +£1.9m; + 3.7% RoW £3.2m (£2.9m) – SA +£3.6m ; + 15.0% – RoW +£0.3m ; + 10.3% SA £27.6m (£24.0m) UK £53.5m (£51.6m) At const
Slide 8: Analysis of Revenue Growth
Analysis of Revenue Growth £84.3m +£3.1m +3.8% +£2.3m Price/Mix +2.8% £3.1m Volume +£3.5m +4.3% £81.2m £81.2m -£2.7m Currency -3.3% H1 2006 H1 2007 8
Slide 9: Trading Profit Bridge
Trading Profit Bridge £9.2m 0.2 (0.2) 0.2 0.2 0.1 0.4 £6.9m £8.0m 0.3 £6.4m UK UK SA SA £2.4m £1.9m RoW £(0.3)m £(0.1)m RoW H1 2006 Efficienciesies Benefits of SA SA Lower Gas Reduction Exchange H1 2007 enc e + Volume ci m SA Property Expansion Store Prices RoW Losses ffi olu th EGrowth V ow Disposa
Slide 10: Summary Cash Flow
Summary Cash Flow 6 months 6 months 12 months September September March 2007 2006 2007 £m £m £m Cash generated from operations 10.8 6.3 14.1 Capex – Purchase of SA leaseholds (3.8) - (1.4) Capex - other (2.6) (2.5) (4.8) Net asset disposals & Div’s rec’d 0.3 0.5 0.6 Free cash flow, pre financing 4.7
Slide 11: Capex H1 2007
Capex H1 2007 Highlights UK (£1.2m, 19%) – Purchase of SA stores previously leased - £3.8m – Fit out costs new SA retail stores – Investment in new product tooling & efficiency improvements SA (£5.2m, 81%) – Hot melt adhesive plant commissioned in SA 11
Slide 12: Equity Placing / Capital Structure
Equity Placing / Capital Structure • Admission 16 July 2007 • Placing of 128,802,669 ordinary shares • Placing Price – 78p • Net proceeds of £72m received by Company • Debt repaid £72m • £80m multi-currency, 5 year debt facility • Significant benefit to ongoing finance costs and earnings 12
Slide 13: Balance Sheet Highlights
Balance Sheet Highlights September September March 2007 2006 2007 Trade working capital (£m) 27.2 26.6 28.1 Working capital / Revenue 16.4% 16.4% 17.3% Capex / Depreciation 2.3*1 0.93 1.1 Net debt (£m) 44.5 111.1 112.9 Equity Gearing*2 39% *1 Includes strategic purchase of SA leaseholds *2 Net debt/
Slide 14: Summary
Summary • Underlying first half trading profit +17.9% • Trading profit margins increased to 10.9% from 9.9% • Strong operating cash generation • Continued investment for future growth and efficiency • Interim dividend of 0.56p per share, payable Jan 2008 14
Slide 15: Operating Review
Operating Review Joe Matthews Group Chief Executive 15
Slide 16: UK Revenue
UK Revenue +3.7% Triton – Overall revenue + 3.8% UK +6.5%; Exports -6.0% – UK driven by volume growth; trade and retail – Overall market share increased Showers Showers H&R Johnson – Overall tile revenue + 2.9% UK tile +8.4%; Exports -20.3% Tiles Tiles – UK growth in both DIY and Trade channels – UK
Slide 17: UK Profits
UK Profits Improvement across all three businesses Sept 07 Sept 06 Change % Increased profitability in Triton driven by • UK volume growth; margins maintained Trading 6.9 6.4 +7.8 Profit (£m) • Price increases and tight cost control ROS % 12.9 12.5 +40 bpts Tile profits increased due to • UK volume
Slide 18: South Africa Revenue
South Africa Revenue +15%* Strong revenue growth in all businesses Buoyant LFL growth in Tile Africa retail – Store upgrades – Improved product offering – Investment in training and systems TAF TAF New store programme – Rivonia new concept store opened Aug 07 – George franchise purchased Sept 07 Joh
Slide 19: South Africa Profits
South Africa Profits Substantial uplift in profits at Tile Africa Sept 07 Sept 06 Change – Volume growth % – Trading up Trading 2.4 1.7* +41.2 – Operational efficiencies/ sourcing benefits Profit (£m) – Benefits of leasehold purchase ROS % 8.7 7.1 +160 bpts Johnson Tiles; difficult trading period *a
Slide 20: Rest of World
Rest of World +10.3%* Strong revenue growth Benefits of new tile ranges and product extensions – Underfloor heating/ heated towel rails £3.2m – New accounts/ specifications Substantial turnaround following reorganisation last £2.9m year Business back into monthly profit H1 2006 H1 2007 *Growth at co
Slide 21: NOFCfOS
21 NOFCfOS
Slide 22: Growth Drivers
Growth Drivers UK SA • Good medium/ long term market prospects • Rapidly expanding market • Market share opportunities mixers and trade • Existing store refurbishment • Continued penetration of contract • New store opening programme specifications and social housing • New product development • Reinf
Slide 23: Outlook
Outlook – Confident of further progress despite housing market and consumer sentiment Overall – Importance of replacement and RMI markets – Commercial sectors remain positive – UK businesses well positioned to take advantage of market opportunities UK – Recent and planned new products; increasing sp
Slide 24: Q&A
Q&A NOFCFOS 24