Norcros PLC NXR Interim results

  Norcros PLC (NXR) - Interim results

RNS Number : 9398Q
Norcros PLC
13 November 2012




                                      

                                      

                                      

                                FOR IMMEDIATE
RELEASE
                               13 November 2012

                                      

                                 Norcros plc

                                      

               Results for the 26 weeks ended 30 September 2012

                                      

                  'Well positioned to make further progress'



Norcros ("Norcros"  or "the  Group"), the  home consumer  products group  with 
operations primarily in the UK and South Africa, announces results for the  26 
weeks ended 30 September 2012.



Financial Summary

                            2012    2011       % Change as         % change at
                                                  reported   constant currency
                                      
Revenue                  £106.3m £102.4m             +3.8%               +9.4%
Underlying*    operating   £6.6m   £6.3m             +4.8%
profit
Underlying*       profit   £6.0m   £5.4m            +11.1%
before tax
Profit before tax          £6.6m   £4.3m            +53.5%
Underlying* earnings per    1.1p    0.9p            +22.2%
share
Interim   dividend   per  0.155p   0.14p            +10.7%
share

^

 *Underlying is before exceptional items and where relevant, before non
cash finance costs and after attributable tax



Highlights

· Revenue increased by 9.4% on a constant currency basis

· Underlying operating profit increased by 4.8%

· South Africa growing strongly and returned to profit

· Interim dividend up 10.7% to 0.155p per share

· UK defined benefit pension scheme - planned closure to future accrual
announced

· Good progress on surplus property planning



Martin Towers, Chairman, commented:



"I am pleased  to announce another  solid set  of results for  the six  months 
ended  30  September  2012.  Revenue  growth  has  been  driven  by  continued 
investment in  new  products,  strong  customer  relationships  and  excellent 
logistics capability. Significant operational progress  has been made in  the 
period, building on the improvements seen in the fourth quarter of last  year. 
Management  actions  have  continued  to  improve  operational  and  financial 
performance in Johnson Tiles South Africa. In the UK, the issues that affected
manufacturing efficiency  in  Johnson Tiles  have  now been  resolved.  Market 
leading, well established brands, innovative products and improved operational
performance puts  the Group  in a  strong position  to make  further  progress 
provided conditions in our key markets do not deteriorate any further."





There will be a presentation today at  9.30 am for analysts at the offices  of 
Hudson Sandler, 29 Cloth Fair, London, EC1A 7NN. The supporting slides will be
available on the Norcros website at http://www.norcros.com/ later in the day.



ENQUIRIES

Norcros plc                          Tel: 01625 547700
Nick Kelsall, Group Chief Executive
Martin Payne, Group Finance Director
Hudson Sandler                       Tel: 0207 796 4133
Nick Lyon
Charlie Jack
Katie Matthews



Notes to Editors

- Norcros is the home consumer products group and leading supplier of high
quality and  innovative showers,  ceramic wall  and floor  tiles and  adhesive 
products with operations primarily in the UK and South Africa



- In the UK, Norcros operates under three brands:

- Triton Showers - Market leader in the manufacture and marketing of showers
in the UK

- Johnson Tiles -  A leading manufacturer and  supplier of ceramic tiles  in 
the UK

- Norcros Adhesives  - Manufacturer of  tile & stone  adhesives, grouts  and 
related products



- In South Africa, Norcros operates under three brands:

- Tile Africa  - Chain of  retail stores focused  on ceramic and  porcelain 
tiles, and associated products such as sanitary ware, showers and adhesives

- Johnson Tiles South Africa - Manufacturer of ceramic and porcelain tiles

- TAL  -  The leading  manufacturer  of ceramic,  industrial  and  building 
adhesives



- Norcros is headquartered in Wilmslow, Cheshire and employs around 1,600
people. The  company is  listed  on the  London  Stock Exchange.  For  further 
information please visit the Company website: http://www.norcros.com/



Chairman's statement

The Board is pleased to announce another solid set of results for the six
months ended 30 September 2012. Revenue growth has been driven by continued
investment in new products, strong customer relationships and excellent
logisticscapability.

Significant operational progress has been made in the period, building on the
improvements seen in the fourth quarter of last year. Management actions have
continued to improve operational and financial performance in Johnson Tiles
South Africa. In the UK, the issues that affected manufacturing efficiency in
Johnson Tiles have now been resolved.

Market leading, well established brands, innovative products and improved
operational performance puts the Group in a strong position to make further
progress provided conditions in our key markets do not deteriorate any
further.

Results

Group revenue increased by 3.8% to £106.3m (2011: £102.4m) for the six months
ended 30September 2012 and by 9.4% on a constant currency basis.

Group underlying operating profitimproved 4.8% to £6.6m (2011: £6.3m).

Group underlying profit before taxation improved 11.1% to £6.0m (2011: £5.4m),
driven by higher underlying operating profit and lower financing costs as a
result of the September 2011 refinancing.

Group profit before taxation improved 53.5% to £6.6m (2011: £4.3m) as a result
of improved underlying profit before taxation, no exceptional charges in the
period and higher non cash finance income.

Basic underlying earnings per share was 1.1p (2011: 0.9p) driven by improved
underlying profit before taxation and a low tax charge as a result of the
recognition of a deferred tax asset in our South African business not
previously recognised.

Financial

Net cash generated from operations in the period was £2.1m (2011: £0.6m),
reflecting increased working capital investment in Johnson Tiles to support
significant market share gain with B&Q. Operating cash flow in the prior year
included £7.8m of lease surrender costs to exit the onerous lease at
Springwood Drive. Investment in capital expenditure in the period amounted to
£2.4m (2011: £3.1m) and the disposal of two store sites in TAF, our South
African retail business, generated proceeds of £1.1m (2011: £nil). Net debt
before prepaid finance costs at 30 September 2012 increased to£20.2m from
£18.5m at 31March 2012, but leverage still remains low at 1.1 times EBITDA.

The position of our UK defined benefit pension scheme as calculated under
IAS19 has beenupdated and shows an increased deficit from £18.7m at31 March
2012 to £22.3m at 30September 2012. The increased deficit has arisen due to a
fall in the relevant discount rate offset partially by reduced inflation but
still represents a 94% funding level on this basis. The Group has started a
consultation process with its UK employees with a view to closing the defined
benefit section of its UK pension scheme to all future accrual from 31 March
2013. As part of this process a new, auto enrolment compliant defined
contribution scheme will be introduced from 1 April 2013.

The taxation charge for the period has benefitted from the recognition of a
£1.2m deferred tax asset not previously recognised relating to brought forward
tax losses in our South African business. The South African business is now
profitable and the Board believes it will continue to be so such that these
tax losses will be utilised in the foreseeable future.

Surplus property

Following the announcement in August 2011 of a conditional sale to WM Morrison
of part of our surplus land holding at Tunstall for a net £2.6m, a planning
application for the Highgate site was submitted in February 2012. Following
public consultation and extensive discussions with Stoke City Council, a
revised application was submitted on 22October 2012. This is anticipated to
be presented to the Planning Committee in January 2013. Assuming necessary
approvals are granted, it is anticipated that the majority of the proceeds
will be received in the next financial year.

Dividend

The Board is declaring an interim dividend of 0.155p per share (2011: 0.14p).
The dividend is payable on 8 January 2013 to shareholders on the register on 7
December 2012. The shares will be quoted ex-dividend on 5 December 2012.

Board changes

Since the last report, a number of changes to the composition of the Board
have been made. I am delighted to have been appointed Chairman on 1 November
2012 following John Brown's decision to step down from the role and look
forward to working with Nick Kelsall and the rest of the Board to drive the
Group forward. I am delighted John has decided to stay on as Senior
Independent Director and Chair of the Audit Committee and would like to record
the Board's thanks for his considerable help as Chairman in guiding the Group
since its flotation in July 2007.

In July 2012, Les Tench retired from the Board and again on behalf of the
Board I would like to thank him for his valued contribution. Following an
extensive selection process, Jo Hallas was appointed to the Board in September
2012. We were keen to attract someone with significant international
experience in the consumer products sector to complement the existing range of
skills and experience of the Board. Jo was the ideal candidate and we look
forward to working with her as we continue to develop the business.

Operating review

Further details of the financial performance and market conditions in each of
the Group's businesses are set out below.

UK

For the six months ended 30September 2012 total revenues in our UK businesses
increased by 4.7% to £61.1m. Underlying operating profit at £6.0m was
9.5%below last year.

Triton Showers, our market leading shower operation, performed better in the
second quarter after a weak first quarter, but still recorded 8.3% lower
revenue for the six months to 30 September 2012 compared toprior year.

The overall UK shower market has declined approximately 7% in volume terms in
the first six months. Weak consumer confidence and reduced public sector
spending were exacerbated by further customer de-stocking in the first quarter
of the year. Although Triton's UK revenue was 6.4% lower than prior year, the
business increased its market share. Encouragingly, performance in the second
quarter improved, with revenue only 3.4% lower than the prior year compared to
9.6% lower in the first quarter. The innovative T80Z Fast Fit range which has
the patented swing fit feature (a flexible configuration that allows multiple
points of entry for both water and electrics) was launched in the fourth
quarter of last year and has proved successful with both consumers and
installers contributing significantly to revenue in the first half.

Export revenue, which is predominantly derived from Ireland and represents
about 14% of overall Triton revenue, was 18.7% lower than prior year
reflecting general economic and Eurozone uncertainty. Again, performance in
the second quarter improved and was 7.1% below the prior year.

Despite input cost reductions through both supplier negotiation and value
engineering in areas such as plastics and electronics, and overhead
reductions, underlying operating profits were lower than prior year as a
result of lower revenue. Nevertheless, the business performed strongly,
remains highly profitable and cash generative and is well placed to capitalise
on improved market conditions when they arrive.

Johnson Tiles, the UK market leading ceramic tile manufacturer and market
leader in the supply of both own manufactured and imported tiles, performed
well especially in the UK market where it has continued to gain share. Overall
revenue in the six months ended 30 September 2012 was 17.0% higher than the
same period last year. UK markets remained challenging but despite this, UK
revenue exceeded prior year by 20.6% with continued market share gain in the
DIY multiple channel and in particular with B&Q which has implemented a major
tile range review and introduced a new in-store tile shop. This performance
has offset some market driven contraction in the trade sector and although
contracts for Decent Housing programmes in Leeds and Edinburgh were completed
in the period, public sector demand continues to be impacted by Government
spending cuts. In the commercial sector notable contract wins with Marks and
Spencer, Premier Inn, Asda, John Lewis and EON were completed in the period.

Export sales, which represent approximately 9% of Johnson Tiles' revenue, were
10.7% lower than prior year largely driven by reduced sales in the Middle
East. Despite growth in a number of areas in the Middle East, contract
successes in the past two years in Qatar have not been repeated this year.

With good progress on revenue, underlying operating profit improved in the
first six months compared to the same period last year. The manufacturing
efficiency problems that constrained performance last year were resolved in
the final quarter of last year and operationally the business has continued to
perform well in the first half of this year. Energy costs have stabilised but
are still approximately 6% higher than prior year and are expected to continue
to run at this level into the second half of the year. Our hedging policy
continues to ensure that any further risks to energy costs are limited.

Norcros Adhesives, our manufacturer and supplier of tile and stone adhesives
and ancillary products, saw revenue 1.5% higher and underlying operating
profit the same as prior year. However, against the backdrop of a declining
market this is a creditable performance and has been achieved by specification
gains in John Lewis and Total Fitness as well as further business from the
Barratt Homes and David Wilson contracts.

New products such as a specialist gypsum based adhesive for fixing to
anhydrite screeds and a waterproof tiling system for wet rooms and balconies
have been successfully introduced in the period and a new generation of
polymers has been incorporated into our formulations, reducing input costs and
improving product performance. With further developments in the pipeline, it
is anticipated that the business will continue to gain market share.

South Africa

Total revenue for the six months ended 30September 2012 in our South African
businesses was 17.4% higher than prior year on a constant currency basis at
£39.9m, although a considerably weaker Rand means reported Sterling revenue
was ahead by only 1.9%. An underlying operating profit of £0.5m was recorded
compared to an underlying operating loss of £0.3m in the prior year. This was
principally driven by an improved performance in our tile manufacturing
business as well as further improvements in our market leading adhesive
business. This turnaround in performance has been achieved despite business
and consumer sentiment in South Africa having been affected by challenging
macro economic factors and the recent industrial relations environment.

Johnson Tiles South Africa, our tiles manufacturing business, has continued to
grow in the period, recording 46.5% higher revenue on a constant currency
basis in the independent sector compared to prior year. Further gains in the
DIY sector have been achieved as we continue our successful strategy of
importing ceramic tile products to complement our own manufactured product to
create a "one stop shop" for larger retailers, particularly Builders
Warehouse.

The operational improvements in Johnson Tiles South Africa noted in our last
report have continued in the first half of this year with significantly better
quality, higher throughput and reduced downtime. New sorting and packaging
equipment was successfully installed towards the end of the period and further
improvements to planned maintenance and operating practices are being
implemented to drive further efficiencies. Energy costs were, however, 22%
higher than prior year and have eroded some of the margin benefit.
Notwithstanding this, the business has recorded a significantly reduced loss
in the period.

TAL, our market leading adhesive business, continues to grow strongly both
inside and outside of South Africa and delivered revenue growth of 26.3% to
the independent sector. Within South Africa, the ability to offer a full
tiling solution on a single truck to our major retail customers by combining
tile and adhesive deliveries has helped drive improved sales. To further build
on this "one stop shop" strategy, Tilemate, a range of tile tools, was
successfully launched in the period and further initiatives such as the supply
of a range of tile sealants and cleaners are being progressed. Exports sales
increased 32.3% in the period compared to prior year and now represent 9% of
TAL independent sector sales. New distribution agreements have been signed
with partners in Kenya and Botswana in the period continuing the drive to
export into sub-Saharan Africa. Underlying operating profits for the period
improved compared to prior year and remain strong. Despite current market
conditions, the business is in a strong position to continue to grow
profitably in South Africa and further into sub-Saharan Africa.

Revenue at TAF, our leading retailer of wall and floor tiles, adhesive,
showers, sanitaryware and bathroom fittings increased by 9.2% on a constant
currency basis compared to the prior year. This performance helped deliver an
improved underlying operating profit versus prior year.

As part of our initiative to improve the diversity of our product offering,
tile purchases from outside the Group continue to be made, particularly at the
lower price points, and our purchasing and inbound logistics team and systems
have been strengthened.

During the period one further store was relocated and upgraded bringing the
number of upgrades to 21 out of our 31 stores. Two further stores will be
upgraded in the second half and further planned upgrades and selected new
stores will help continue to drive sales and market share gain.

Rest of the World

Revenue at our Australian operation, Johnson Tiles, was 9.3% higher on a
constant currency basis driven by a new tile range, success in the
specification sector, and continued share gain with Bunnings, a major
Australian DIY retailer. This new range together with a strong customer
relationship and logistics expertise recently helped win further business to
supply Bunnings in New Zealand.

The business remained profitable in the period, generating an underlying
operating profit of £0.1m (2011: £0.1m).

Summary and outlook

Market conditions both in the UK and South Africa continue to be challenging
with no signs of a significant improvement in the near term in either our
trade or retail sectors. Increased focus on the specification sector in a
number of our businesses is beginning to be successful and will be sustained
with the aim of driving further market share gain. Although there is still
further work to do, there has been a significant improvement in financial
performance in our South African business. These successes, together with
tight cost control and self help measures across our businesses, leave the
Board confident that the Group is well positioned to make further progress and
at the same time consider the strategic growth opportunities which will
complement the Group's businesses and their leading market positions.

M. Towers

Chairman



13 November 2012

Condensed consolidated income statement
26 weeks ended 30 September 2012



                                               26 weeks     26 weeks  53 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                     Notes           £m           £m        £m
Continuing operations
Revenue                                           106.3        102.4     200.3
Operating profit                                    6.6          6.3      12.1
Underlying* operating profit                        6.6          6.3      12.1
Exceptional operating items              3            -            -         -
Operating profit                                    6.6          6.3      12.1
                                                                             
Finance costs                            7        (1.0)        (1.7)     (3.1)
Exceptional finance costs                3            -        (1.2)     (1.2)
Total finance costs                               (1.0)        (2.9)     (4.3)
Finance income                           7            -          0.2         -
IAS 19 finance income                               1.0          0.7       1.6
Profit before taxation                              6.6          4.3       9.4
Taxation                                 6        (0.1)        (0.5)         -
Profit for the period                               6.5          3.8       9.4
Earnings per share attributable to the owners of the Company
Basic earnings per share                 5         1.1p         0.7p      1.6p
Diluted earnings per share               5         1.1p         0.7p      1.6p
Weighted average number of shares for
basic earnings per share (millions)               579.7        577.0     577.2
Non-GAAP measures:
Underlying* profit before taxation (£m)             6.0          5.4      10.7
Underlying* earnings (£m)                4          6.1          5.1      11.1
Basic underlying* earnings per share               1.1p         0.9p      1.9p
Diluted underlying* earnings per share             1.0p         0.9p      1.9p



* Underlying is defined as before exceptional items and, where relevant,
amortisation of costs of raising finance, movement on fair value of derivative
financial instruments, discounting of property lease provisions and finance
costs relating to pension schemes, less attributable taxation.

Condensed consolidated statement of comprehensive income
26 weeks ended 30 September 2012



                                               26 weeks     26 weeks  53 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                                     £m           £m        £m
Profit for the period                               6.5          3.8       9.4
Other comprehensive expense:
Actuarial losses on retirement benefit
obligations                                       (3.0)        (6.4)    (10.6)
Foreign currency translation adjustments          (3.5)        (6.2)     (5.3)
Other comprehensive expense for the period        (6.5)       (12.6)    (15.9)
Total comprehensive expense for the period            -        (8.8)     (6.5)



Items in the statement are disclosed net of tax.

Condensed consolidated balance sheet
at 30 September 2012



                                                At           At        At

                                      30 September 30 September  31 March

                                              2012         2011      2012

                                       (unaudited)  (unaudited) (audited)

                                Notes           £m          £m        £m
Non-current assets
Goodwill                                      23.0         23.3      23.4
Property, plant and equipment                 43.4         44.8      44.8
Investment properties                          5.4          5.5       5.4
Deferred tax assets                 6          8.3          4.2       6.4
                                             80.1         77.8      80.0
Current assets
Inventories                                   51.0         41.8      45.5
Trade and other receivables                   38.1         39.1      40.7
Derivative financial instruments                 -          0.5         -
Pension scheme asset               12          0.3          1.0       0.6
Cash and cash equivalents                      3.4         10.7       2.9
                                             92.8         93.1      89.7
Current liabilities
Trade and other liabilities                 (49.9)       (48.2)    (50.6)
Derivative financial instruments             (0.5)        (1.7)     (0.4)
Current tax liabilities                      (1.6)        (1.2)     (1.1)
Financial liabilities - borrowings  8        (0.6)        (2.8)     (0.4)
                                           (52.6)       (53.9)    (52.5)
Net current assets                            40.2         39.2      37.2
Total assets less current liabilities        120.3        117.0     117.2
Non-current liabilities
Financial liabilities - borrowings  8       (22.4)       (25.2)    (20.3)
Pension scheme liability           12       (22.3)       (14.6)    (18.7)
Other non-current liabilities                (1.7)        (1.7)     (1.7)
Provisions                                   (4.1)        (6.2)     (5.4)
                                            (50.5)       (47.7)    (46.1)
Net assets                                    69.8         69.3      71.1
Financed by:
Ordinary share capital              9          5.8          5.8       5.8
Share premium                                  0.3            -       0.2
Retained earnings and other reserves          63.7         63.5      65.1
Total equity                                  69.8         69.3      71.1



The notes on pages 14 to 26 form an integral part of this condensed
consolidated interim financial information.

Condensed consolidated statement of cash flows
26 weeks ended 30 September 2012



                                               26 weeks     26 weeks  53 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                     Notes           £m           £m        £m
Cash generated from
operations                              10          2.1          0.6       6.0
Income taxes paid                                 (0.3)            -     (0.6)
Interest received                                     -            -         -
Interest paid                                     (0.6)        (0.7)     (1.6)
Net cash generated from/(used in)operating
activities                                          1.2        (0.1)       3.8
Cash flows from investing activities
Purchase of property, plant and equipment         (2.4)        (3.1)     (6.7)
Proceeds from sale of property, plant and
equipment                                           1.1            -         -
Net cash used in investing activities             (1.3)        (3.1)     (6.7)
Cash flows from financing activities
Net proceeds from issue of ordinary share
capital                                             0.1            -       0.2
Repayments of borrowings                              -       (17.0)    (17.0)
Capitalised finance costs                             -        (0.8)     (0.8)
Drawdown of new borrowings                          2.0         26.0      21.0
Dividends paid to equity shareholders             (1.6)        (1.4)     (2.2)
Net cash generated from financing
activities                                          0.5          6.8       1.2
Net increase/(decrease) in cash at bank
and in hand and bank overdrafts                     0.4          3.6     (1.7)
Cash at bank and in hand and bank
overdrafts at beginning of the period               2.5          4.6       4.6
Exchange movements on cash and bank
overdrafts                                        (0.1)        (0.3)     (0.4)
Cash at bank and in hand and bank
overdrafts at end of the period                     2.8          7.9       2.5



Condensed consolidated statement of changes in equity
26 weeks ended 30 September 2012 (unaudited)

                                   Ordinary                            

                                      share   Share Translation Retained

                                    capital premium     reserve earnings Total

                                         £m      £m          £m       £m    £m
At 31 March 2012                        5.8     0.2         5.8     59.3  71.1
Comprehensive income:
Profit for the period                     -       -           -      6.5   6.5
Other comprehensive expense:                                             
Actuarial loss on retirement benefit
obligations                               -       -           -    (3.0) (3.0)
Foreign currency translation
adjustments                               -       -       (3.5)        - (3.5)
Total other comprehensive expense         -       -       (3.5)    (3.0) (6.5)
Transactions with owners:
Shares issued                             -     0.1           -        -   0.1
Dividends paid                            -       -           -    (1.6) (1.6)
Employee share schemes and warrants       -       -           -      0.2   0.2
At 30 September 2012                    5.8     0.3         2.3     61.4  69.8



26 weeks ended 30 September 2011 (unaudited)

                      Ordinary    Capital                      Retained

                         share redemption   Share Translation (losses)/

                       capital    reserve premium     reserve  earnings  Total

                            £m         £m      £m          £m        £m     £m
At 31 March 2011          19.2          -    86.8        11.1    (37.7)   79.4
Comprehensive income:
Profit for the period        -          -       -           -       3.8    3.8
Other comprehensive expense:
Actuarial loss on
retirement
benefitobligations          -          -       -           -     (6.4)  (6.4)
Foreign currency
translation adjustments      -          -       -       (6.2)         -  (6.2)
Total other
comprehensive expense        -          -       -       (6.2)     (6.4) (12.6)
Transactions with owners:
Purchase of own shares  (13.4)       13.4       -           -         -      -
Capital re-organisation      -     (13.4)  (86.8)           -     100.2      -
Dividends paid               -          -       -           -     (1.4)  (1.4)
Employee share schemes
and warrants                 -          -       -           -       0.1    0.1
At 30 September 2011       5.8          -       -         4.9      58.6   69.3



During the period the Company repurchased 148,754,684 deferred shares of 9p
each for a nominal value. Following this the Company cancelled its capital
redemption reserve and its share premium account.

52 weeks ended 31 March 2012 (audited)

                      Ordinary    Capital                      Retained

                         share redemption   Share Translation (losses)/

                       capital    reserve premium     reserve  earnings  Total

                            £m         £m      £m          £m        £m     £m
At 31 March 2011          19.2          -    86.8        11.1    (37.7)   79.4
Comprehensive income:
Profit for the year          -          -       -           -       9.4    9.4
Other comprehensive expense:
Actuarial loss on
retirement benefit
obligations                  -          -       -           -    (10.6) (10.6)
Foreign currency
translation adjustments      -          -       -       (5.3)         -  (5.3)
Total other
comprehensive expense        -          -       -       (5.3)    (10.6) (15.9)
Transactions with owners:
Purchase of own shares  (13.4)       13.4       -           -         -      -
Capital re-organisation      -     (13.4)  (86.8)           -     100.2      -
Shares issued                -          -     0.2           -         -    0.2
Dividends paid               -          -       -           -     (2.2)  (2.2)
Employee share schemes
and warrants                 -          -       -           -       0.2    0.2
At 31 March 2012           5.8          -     0.2         5.8      59.3   71.1



During the period the Company repurchased 148,754,684 deferred shares of 9p
each for a nominal value. Following this the Company cancelled its capital
redemption reserve and its share premium account.

Notes to the accounts
26 weeks ended 30 September 2012

1. Accounting policies

General information

The Company is a public limited company which is listed on the London Stock
Exchange and incorporated and domiciled in the UK. This condensed consolidated
interim financial information was approved for issue on 13 November 2012. This
condensed consolidated financial information does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act 2006.

This condensed consolidated interim financial information has been neither
audited nor reviewed.

Basis of preparation

This condensed consolidated interim financial information for the 26 weeks
ended 30 September 2012 has been prepared in accordance with the Disclosure
and Transparency Rules of the Financial Services Authority and with IAS 34,
'Interim financial reporting' as adopted by the European Union and approved
for issue on 13November 2012.

The Directors consider, after making appropriate enquiries at the time of
approving the condensed consolidated financial report, that the Company and
the Group have adequate resources to continue in operational existence for the
foreseeable future and, accordingly, that it is appropriate to adopt the going
concern basis in the preparation of the condensed consolidated interim
financial information.

The condensed consolidated interim financial information should be read in
conjunction with the Annual Report and Accounts for the year ended 31 March
2012, which has been prepared in accordance with IFRS as adopted by the
European Union. The Annual Report and Accounts was approved by the Board on 21
June 2012 and delivered to the Registrar of Companies. The report of the
auditors on the financial statements was unqualified.

The principal accounting policies applied in the preparation of this condensed
consolidated interim financial information are included in the financial
report for the year ended 31 March 2012. These policies have been applied
consistently to all periods presented, unless otherwise stated.

Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to the expected total annual profits or losses.

New standards, amendments to standards or interpretations

The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year beginning 1 April 2012:

The Group has adopted the following new standards, amendments and
interpretations now applicable. None of these standards and interpretations
has had any material effect on the Group's results or net assets.

                                                                Applicable for

                                                               financial years

Standard or interpretation                       Content beginning on or after
                                    Financial instrument
Amendment to IFRS 7                          disclosures          1 April 2012
Amendment to IAS 12                         Income taxes          1 April 2012



The following standards, amendments and interpretations are not yet effective
and have not been adopted early by the Group:

                                                                Applicable for

                                                               financial years

                                                               beginning on or
Standard or interpretation                             Content           after
                                     Presentation of financial
Amendment to IAS 1*                                 statements    1 April 2013
                              Financial instruments: asset and
Amendment to IFRS 7*                      liability offsetting    1 April 2013
IFRS 10                      Consolidated financial statements    1 April 2013
IFRS 11*                                     Joint arrangement    1 April 2013
                              Disclosure of interests in other
IFRS 12*                                              entities    1 April 2013
IFRS 13*                                Fair value measurement    1 April 2013
IAS 19R (revised 2011)                       Employee benefits    1 April 2013
IAS 27 (revised 2011)            Separate financial statements    1 April 2013
Annual improvements to
IFRS's 2011                                            Various    1 April 2013
                             Stripping costs in the production
IFRIC 20*                              phase of a surface mine    1 April 2013
                                        Financial instruments:
IFRS 9*                         classification and measurement    1 April 2015



* These standards are not expected to be relevant to the Group.



IAS 19R 'Employee benefits' is likely to have a significant impact on future
financial statements when it is adopted. Under IAS 19R the interest cost on
the defined benefit obligation, and the expected rate of return on plan
assets, will be replaced with a net interest charge that is calculated by
applying the discount rate to the net defined benefit liability. With effect
from 1 April 2013 this is likely to result in an interest charge rather than
finance income being recognised in the income statement.

Risks and uncertainties

The principal strategic level risks and uncertainties affecting the Group,
together with the approach to their mitigation, remain as set out in the
Financial Review on pages 16 and 17 in the 2012 Annual Report, which is
available on the Group's website (www.norcros.com).

In summary the Group's principal risks and uncertainties are:

• key commercial relationships;
• competition;
• reliance on production facilities;
• staff retention and recruitment;
• foreign currency exchange risk;
• interest rate risk;
• pension scheme management;
• energy price risk;
• additional capital requirements to fund ongoing operations;
• performance against banking covenants;
• changing consumer preferences; and
• management of the property estate.



The Chairman's Statement in this condensed consolidated interim financial
information includes comments on the outlook for the remaining six months of
the financial year.

Forward-looking statements

This condensed consolidated interim financial information contains
forward-looking statements. Although the Group believes that the expectations
reflected in these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to be correct. Due to the
inherent uncertainties, including both economic and business risk factors
underlying such forward-looking information, actual results may differ
materially from those expressed or implied by these forward-looking
statements.

The Group undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.

Accounting estimates and judgements

The preparation of condensed consolidated interim financial information
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amount of assets and
liabilities, income and expense. Actual results may differ from these
estimates.

In preparing the condensed consolidated interim financial information, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
applied to the consolidated financial statements for the year ended 31 March
2012.

2. Segmental reporting

The Group operates in three main geographical areas: UK, South Africa and Rest
of the World. All inter‑segment transactions are made on an arm's length
basis. The chief operating decision maker, which is considered to be the
Board, assesses performance and allocates resources based on geography as each
segment has similar economic characteristics, complementary products,
distribution channels and regulatory environments.

           26 weeks ended 30 September 2012 (unaudited)
                                  South   Rest of

                              UK Africa the World Group

                      Notes   £m     £m        £m    £m
Revenue                     61.1   39.9       5.3 106.3
Underlying operating profit  6.0    0.5       0.1   6.6
Exceptional operating items    -      -         -     -
Operating profit             6.0    0.5       0.1   6.6
Finance costs                                     (1.0)
IAS 19 finance income                               1.0
Profit before taxation                              6.6
Taxation                                          (0.1)
Profit from continuing operations                   6.5
Net debt                 10                      (19.6)



                  26 weeks ended 30 September 2011 (unaudited)
                                         South   Rest of

                                     UK Africa the World Group

                             Notes   £m     £m        £m    £m
Revenue                            58.4   39.2       4.8 102.4
Underlying operating profit/(loss)  6.5  (0.3)       0.1   6.3
Exceptional operating items           -      -         -     -
Operating profit/(loss)             6.5  (0.3)       0.1   6.3
Finance costs                                            (2.9)
Finance income                                             0.2
IAS 19 finance income                                      0.7
Profit before taxation                                     4.3
Taxation                                                 (0.5)
Profit from continuing operations                          3.8
Net debt                        10                      (17.3)





                         52 weeks ended 31 March 2012 (audited)
                                          South   Rest of

                                      UK Africa the World Group

                             Notes    £m     £m        £m    £m
Revenue                            116.8   74.0       9.5 200.3
Underlying operating profit/(loss)  12.5  (0.5)       0.1  12.1
Exceptional operating items            -  (0.5)       0.5     -
Operating profit/(loss)             12.5  (1.0)       0.6  12.1
Finance costs                                             (3.1)
Exceptional finance costs                                 (1.2)
IAS 19 finance income                                       1.6
Profit before taxation                                      9.4
Taxation                                                      -
Profit from continuing operations                           9.4
Net debt                        10                       (17.8)



There are no differences from the last Annual Report in the basis of
segmentation or in the basis of measurement of segment profit or loss.

3. Exceptional items

                                               26 weeks     26 weeks  52 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                                     £m           £m        £m
Exceptional operating items
Impairment of associate's carrying value and related
costs^1                                               -            -       0.5
Restructuring costs^2                                 -            -     (0.5)
                                                      -            -         -
Exceptional finance costs
Amortisation of costs of raising debt finance^3       -        (1.2)     (1.2)



1 In 2009 the carrying value of the Groups' Greek associate was fully
impaired together with associated costs including the mark to market value of
the related cross currency swap. The swap matured in January 2012 and the
other associated costs paid. The cost of settling the cross currency swap was
£0.5m lower than initially estimated.

2 Restructuring costs related to redundancies, asset write-downs and
consultancy costs followings the implementation of a programme of
restructuring initiatives throughout the Group's business units.

3 Following the refinancing of the Group's banking facilities in September
2011, £1.2m of unamortised costs relating to previous banking arrangements
were impaired.

4. Non-GAAP measures

                                               26 weeks     26 weeks  52 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                                     £m           £m        £m
Profit before taxation                              6.6          4.3       9.4
Adjusted for:
Exceptional operating items                           -            -         -
Amortisation of costs of raising debt finance       0.1          1.8       1.9
Net movement on fair value of derivative
financial instruments                               0.2        (0.2)       0.7
Discount on property lease provisions               0.1          0.2       0.3
IAS 19 finance income                             (1.0)        (0.7)     (1.6)
Underlying profit before taxation                   6.0          5.4      10.7
Taxation attributable to underlying profit before
taxation                                            0.1        (0.3)       0.4
Underlying earnings                                 6.1          5.1      11.1



Underlying profit before taxation is defined as profit before taxation,
exceptional items, amortisation of costs of raising finance, movement on fair
value of derivative financial instruments, discounting of property lease
provisions and finance costs relating to pension schemes.

The Directors believe that underlying profit before taxation and underlying
earnings provide shareholders with additional useful information on the
underlying performance of the Group.



5. Earnings per share

                              26 weeks     26 weeks  52 weeks

                                 ended        ended     ended

                          30 September 30 September  31 March

                                  2012         2011      2012

                          (unaudited) (unaudited) (audited)

                                    £m           £m        £m
Earnings for the period            6.5          3.8       9.4
Underlying earnings for the period 6.1          5.1      11.1





                                     26 weeks     26 weeks    52 weeks

                                        ended        ended       ended

                                 30 September 30 September    31 March

                                         2012         2011        2012

                                 (unaudited) (unaudited)   (audited)

                                           £m           £m          £m
Weighted average number of shares
for basic earnings per share      579,748,127  577,025,912 577,231,925
Share options and warrants          2,402,728    2,838,905   2,383,527
Weighted average number of shares
for diluted earnings per share    582,150,855  579,864,817 579,615,452



                                  26 weeks     26 weeks  52 weeks

                                     ended        ended     ended

                              30 September 30 September  31 March

                                      2012         2011      2012

                              (unaudited) (unaudited) (audited)
Basic earnings per share              1.1p         0.7p      1.6p
Diluted earnings per share            1.1p         0.7p      1.6p
Basic underlying earnings per share   1.1p        0.9p      1.9p
Diluted underlying earnings per share 1.0p        0.9p      1.9p



6. Taxation

Taxation comprises:

                                               26 weeks     26 weeks  52 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                                     £m           £m        £m
Current
UK taxation                                         0.7          0.3       0.8
Deferred
Origination and reversal of temporary differences (0.6)          0.2     (0.8)
Taxation                                            0.1          0.5         -



Current tax expense is recognised based on management's estimate of the
weighted average annual income tax rate expected for the full financial year.
During the period £1.2m has been credited to the tax charge due to the
recognition of deferred tax assets in South Africa.

Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income taxes relate to the same fiscal authority.
Deferred tax is calculated in full on temporary differences under the
liability method. The movement on the deferred tax account is as shown below:

                                             26 weeks     26 weeks  52 weeks

                                                ended        ended     ended

                                         30 September 30 September  31 March

                                                 2012         2011      2012

                                         (unaudited) (unaudited) (audited)

                                                   £m           £m        £m
Deferred tax asset at the beginning of the period 6.4          2.2       2.2
Credited/(debited) to the income statement        0.6        (0.2)       0.8
Credited to statement of comprehensive income     1.3          2.2       3.4
Deferred tax asset at the end of the period       8.3          4.2       6.4



                                                At           At        At

                                      30 September 30 September  31 March

                                              2012         2011      2012

                                      (unaudited) (unaudited) (audited)

                                                £m           £m        £m
Accelerated capital allowances                 0.5            -       0.6
Tax losses                                     2.2            -       1.1
Other timing differences                       0.2          0.4       0.2
Deferred tax asset relating to pension deficit 5.4          3.8       4.5
                                              8.3          4.2       6.4



7. Finance income and costs

                                               26 weeks     26 weeks  52 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                                     £m           £m        £m
Finance costs
Interest payable on bank borrowings                 0.6          0.9       1.4
Amortisation of costs of raising debt finance       0.1          0.6       0.7
Movement on fair value of derivative financial
instruments                                         0.2            -       0.7
Discount on property lease provisions               0.1          0.2       0.3
Total finance costs                                 1.0          1.7       3.1
Finance income
Movement on fair value of derivative financial
instruments                                           -        (0.2)         -
Total finance income                                  -        (0.2)         -
Finance costs - net                                 1.0          1.5       3.1



8. Borrowings

                                           At           At        At

                                 30 September 30 September  31 March

                                         2012         2011      2012

                                  (unaudited)  (unaudited) (audited)

                                           £m           £m        £m
Non-current
Bank borrowings (secured):
- bank loans                             23.0         26.0      21.0
- less: costs of raising finance        (0.6)        (0.8)     (0.7)
Total non-current                        22.4         25.2      20.3
Current
Bank borrowings (secured):
- bank overdrafts                         0.6          2.8       0.4
Total borrowings                         23.0         28.0      20.7



The fair value of bank loans equals their carrying amount as they bear
interest at floating rates.

The repayment terms of borrowings are as follows:

                                                     At           At        At

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                            (unaudited)  (unaudited) (audited)

                                                     £m           £m        £m
Not later than one year                             0.6          2.8       0.4
After more than one year:
- later than two years and not later than five
years                                              23.0         26.0      21.0
- costs of raising finance                        (0.6)        (0.8)     (0.7)
                                                  22.4         25.2      20.3
Total borrowings                                   23.0         28.0      20.7



9. Ordinary called up share capital

                                        At           At        At

                              30 September 30 September  31 March

                                      2012         2011      2012

                               (unaudited)  (unaudited) (audited)

                                        £m           £m        £m
Issued and fully paid
580,388,912 ordinary shares of 1p each 5.8          5.8       5.8



The Company issued 556,308 1p ordinary shares to members of an SAYE scheme
whose options were exercisable during the period.

10. Consolidated Cash Flow Statements

(a) Cash generated from operations

                                               26 weeks     26 weeks  53 weeks

                                                  ended        ended     ended

                                           30 September 30 September  31 March

                                                   2012         2011      2012

                                           (unaudited) (unaudited) (audited)

                                                     £m           £m        £m
Profit before taxation                              6.6          4.3       9.4
Adjustments for:
- exceptional items included in the above             -            -         -
- cash flows from exceptional items               (1.2)        (9.0)    (11.1)
- depreciation                                      3.1          3.2       6.3
- difference between pension charge and
contributions                                       0.3        (0.4)     (0.7)
- profit on disposal of property, plant and
equipment                                             -        (0.1)     (0.4)
- finance costs                                     1.0          2.9       4.3
- finance income                                      -        (0.2)         -
- other finance income                            (1.0)        (0.7)     (1.6)
- share-based payments                              0.2          0.1       0.2
- exchange differences                                -          0.2         -
Operating cash flows before movements in working
capital                                             9.0          0.3       6.4
Changes in working capital:
- increase in inventories                         (7.3)        (2.7)     (5.9)
- (increase)/decrease in trade and other
receivables                                       (0.1)          2.3       2.1
- increase in payables                              0.5          0.7       3.4
Cash generated from operations                      2.1          0.6       6.0



(b) Cash flows from exceptional items

This includes expenditure utilised against exceptional provisions created in
prior periods relating to onerous property leases, business rationalisation
and restructuring including severance and other employee costs.

(c) Analysis of net debt

                          Cash   Debt  Total

                            £m     £m     £m
At 1 April 2011            4.6 (15.2) (10.6)
Cash flow                (1.7)  (4.0)  (5.7)
Other non-cash movements     -  (1.1)  (1.1)
Exchange movement        (0.4)      -  (0.4)
At 31 March 2012           2.5 (20.3) (17.8)
At 1 April 2011            4.6 (15.2) (10.6)
Cash flow                  3.6  (9.0)  (5.4)
Other non-cash movements     -  (1.0)  (1.0)
Exchange movement        (0.3)      -  (0.3)
At 30 September 2011       7.9 (25.2) (17.3)
At 1 April 2012            2.5 (20.3) (17.8)
Cash flow                  0.4  (2.0)  (1.6)
Other non-cash movements     -  (0.1)  (0.1)
Exchange movement        (0.1)      -  (0.1)
At 30 September 2012       2.8 (22.4) (19.6)



11. Dividends

A final dividend in respect of the year ended 31 March 2012 of £1.6m (0.28p
per share) was paid in August 2012. On 13 November 2012 the Board declared an
interim dividend in respect of the year 31 March 2013 of £0.9m (0.155p per
share). This dividend will be paid in January 2013 and is not reflected in
this condensed consolidated interim financial information.

12. Retirement benefit obligations

(a) Pension costs

Norcros Security Plan

The Norcros Security Plan, the principal UK pension scheme of Norcros plc
subsidiaries, is funded by a separate trust fund. It is predominantly a
defined benefit scheme with a modest element of defined contribution benefits.
Norcros plc itself has no employees and so has no liabilities in respect of
these pension schemes.

The valuation used for IAS 19 disclosures has been produced by Mercer Human
Resource Consulting, a firm of qualified actuaries, to take account of the
requirements of IAS 19 in order to assess the liabilities of the scheme at 30
September 2012. Scheme assets are stated at their market value at 30 September
2012.

South Africa defined benefit schemes

The Group previously operated two separate defined benefit schemes for the
benefit of the Group's South African employees. These were the TAL Pension
Fund and the Johnson Tiles Pension Fund. Both schemes were closed in 2007 and
replaced by defined contribution schemes. Following the agreement of the
allocation of surplus assets, a surplus of £0.3m (2011: £1.0m) has been
recognised as an asset on the Balance Sheet as this amount is considered to be
recoverable by the Group.

(b) IAS 19, 'Retirement benefit obligations'

The principal assumptions used to calculate the scheme liabilities of the
Norcros Security Plan under IAS 19 are:

                        At           At       At

              30 September 30 September 31 March

                      2012         2011     2012
Discount rate        4.40%        5.30%    4.95%
Inflation rate (RPI) 2.60%        3.00%    3.20%
Inflation (CPI)      1.60%        2.30%    2.20%
Salary increases     2.85%        3.25%    3.45%



The amounts recognised in the Balance Sheet are determined as follows:

                                         At           At       At

                               30 September 30 September 31 March

                                       2012         2011     2012

                                         £m           £m       £m
Total market value of scheme assets   365.6        350.4    368.2
Present value of scheme liabilities (387.6)      (364.0)  (386.3)
Pension deficit                      (22.0)       (13.6)   (18.1)
Comprising:
- Norcros Security Plan              (22.3)       (14.6)   (18.7)
- other                                 0.3          1.0      0.6
Pension deficit                      (22.0)       (13.6)   (18.1)



13. Principal subsidiaries and associated company

The principal Group subsidiaries and associates are disclosed below.
Transactions between subsidiaries and between the Parent Company and its
subsidiaries are eliminated on consolidation.

United Kingdom

- Norcros Group (Holdings) Limited

Overseas

- Norcros SA (Pty) Limited* trading as Johnson Tiles (Pty) Limited, TAL and
  TAF (incorporated in South Africa)
- Johnson Tiles (Pty) Limited* (incorporated in Australia)

* The Group interest is owned by Group companies other than Norcros plc.

Notes

Unless otherwise stated, all companies are 100% owned and all UK companies are
incorporated and operate in Great Britain and are registered in England and
Wales. Overseas companies operate in the countries in which they are
incorporated.

Only those subsidiary undertakings and associated companies whose results
principally affect the financial statements of the Group are included above.

14. Related party transactions

The following transactions were carried out with related parties:

(a) Purchases of goods and services

                  26 weeks     26 weeks  52 weeks

                     ended        ended     ended

              30 September 30 September  31 March

                      2012         2011      2012

              (unaudited) (unaudited) (audited)

                        £m           £m        £m
Purchases of goods:
- Prism Cement Limited 0.5          0.9       1.5



Goods are purchased from related parties on normal commercial terms and
conditions.

Dividends of £0.5m (2011: £0.4m) were paid during the period to Lifestyle
Investments PVT Limited which owns 29.79% of the Company's issued share
capital. This company is owned by Prism Cement Limited, a company of which
Vijay Aggarwal is a director.

(b) Period end balances arising from sales/purchases of goods and services

                          At           At        At

                30 September 30 September  31 March

                        2012         2011      2012

                 (unaudited)  (unaudited) (audited)

                          £m           £m        £m
Payables to related parties:
- Prism Cement Limited (0.1)        (0.3)     (0.3)



Statement of directors' responsibilities

The Directors confirm that this condensed consolidated interim financial
information has been prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting', as adopted by the European Union
and that the Interim Report includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8, namely:

- an indication of important events that have occurred during the first six
  months and their impact on the condensed consolidated interim financial
  information and a description of the principal risks and uncertainties for
  the remaining six months of the financial year; and
- material related-party transactions in the first six months and any changes
  in the related-party transactions disclosed in the last Annual Report.

The Directors of Norcros plc are listed on page 28 of this Interim Report. Les
Tench resigned as a Non‑executive Director on 26 July 2012 and Jo Hallas was
appointed as a Non-executive Director on 27 September 2012.

By order of the Board

N. P. Kelsall         M. K. Payne
Group Chief Executive Group Finance Director
13 November 2012      13 November 2012



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR BRBDBLUBBGDD -0- Nov/13/2012 07:00 GMT
 
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