Norcros plc – Digital Summary Report 2023
Highlights
Key messages
- Our record performance is a testament to our proven business model and the dedication of our employees
- The Group has delivered record revenue and underlying operating profit
- UK – a strong performance benefiting from the contribution from Grant Westfield, the breadth of distribution channels, stock availability and market leading service levels
- SA – a robust performance reflecting leading positions, stock availability and enhanced product offer against challenging market conditions in the second half
- The Group has extended its £130m multicurrency revolving credit facility for a further year until October 2026
- We remain confident that the Group’s proven business model, leading customer service proposition, leading brands and highly experienced management teams will continue to deliver market share gains in the year ahead
1 On a constant currency like for like basis after adjusting for Grant Westfield, acquired 31 May 2022.
At a glance
Our mission
To be a leading supplier of bathroom and kitchen products in selected geographies, offering strong brands, contemporary designs, trusted quality, outstanding service, innovation and a wide product range.
Investment case
Why we outperform?
It’s in our DNA.
We have a clear investment case and a resilient business model; we are well positioned for future growth.
1. Focused operating model
A leading supplier of bathroom and kitchen products in selected geographies.
2. Leading market positions and brands
Our brands and products hold market leading positions or have a significant share of the markets we operate in.
3. Flexible and capital light model
Focusing investment where our expertise achieves the best return for investors.
4. Clear and focused strategy
£600m revenue by 2025, 50% of revenues derived from overseas and sustainable ROCE of >15%.
Why we outperform?
It’s in our DNA.
5. Balanced and diversified business portfolio
Multi-product, broad channel coverage, wide market positioning and geographical diversification.
6. Innovation and new product development
We constantly invest in innovation and developing our product portfolio to better meet our customer requirements and refresh our offering.
Why we outperform?
It’s in our DNA.
7. Experienced management team
Our management team has considerable years of experience of successfully operating in our markets and segments.
8. Group-scale advantages versus smaller competitors
A well-developed and leading supply chain infrastructure, joint product development sharing costs and strong balance sheet to support business growth.
Chair's statement
The Group has outperformed in its markets against a backdrop of challenging market conditions. This is a testament to our strategy and importantly our team and their commitment to delivering on our strategic priorities.
David McKeith
Acting Board Chair
Chief Executive Officer’s statement
Norcros has again grown market share and I am pleased to report record levels of revenue and underlying operating profit.
Thomas Willcocks
Chief Executive Officer
Strategic progress
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Business review
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Environmental, social and governance
Norcros SA’s Wellness Centre
Norcros SA runs a well-established Wellness Program with an on-site Wellness Centre at the Olifantsfontein site, providing Primary Health Care, Occupational Health, and professional Wellness Programs and support.
Merlyn’s Gut Health Day
Dr Annmarie Eustace Ryan visited Merlyn head office and gave a fascinating talk about the vital importance of gut health and gave insight into the relationship between good gut health, feeling well and preventable illnesses.
Annmarie is a Gut Health Expert and a Consultant Gastroenterologist at Tipperary University Hospital and author of the children’s book, Bug of War written to explain to children and parents why eating certain foods and avoiding certain foods is the best way to feel well and to prevent illness.
Norcros SA – investing in the future generation of skilled artisans
Norcros SA’s social commitment is reflected in its recent partnership with the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) to launch the Youth in Engineering apprenticeship programme. Launched in August last year, the scheme saw 20 apprentices from 6,000 applicants launch their careers as artisans. It is a three-year course that requires learners to fulfil each year’s training criteria before progressing to the next academic year.
Each apprentice will have the opportunity to work at either the TAL or the Johnson Tiles plant at Olifantsfontein for three months, where they can apply their skills and gain practical experience. The ultimate goal of the programme is to train and help learners achieve their Red Seal artisan trade certification, which is proof that they have met the national standard in their trade.
Norcros SA empowers women in plumbing with the WIP Programme
House of Plumbing is proud to empower women in the plumbing industry by launching the Women in Plumbing (WIP) Programme. It aims to bridge the gap for trained and qualified women plumbers and to provide them with more career opportunities. Out of over 4,000 applicants, 20 female apprentices were selected to participate in the three-year programme.
The programme is fully sponsored by Norcros SA and House of Plumbing, with the apprentices receiving theoretical and practical training in college and on site. They also have the opportunity to learn more about plumbing products, industry practices and various career avenues from House of Plumbing suppliers during weekly training sessions.
Abode achieves Carbon Neutral status through Planet Mark
In March 2022 Abode achieved the Planet Mark Carbon Neutrality Certification. Abode’s achievement of Carbon Neutral status is the first stepping stone on the journey towards net zero carbon and in November 2022, Abode invested in the installation of solar panels at its Barnsley head office. The installation consisted of 125 solar photovoltaic panels with a combined output of 50kWh. These PV panels should generate enough electricity for all of Abode’s current site requirements and Abode will also benefit from being able to sell the excess energy generated in the summer months back to the grid.
Further improvements Abode has made throughout the year include all office lighting being converted to LED and sensor installations to reduce the usage of electric lighting. To support Abode’s target of electrification of the company fleet, there are also plans to install further EV charging points which will benefit from energy generated from the solar panel installation.
Abode – Naturale Aquifier
An example of how the Group designs products for sustainability is Abode’s Naturale Aquifier tap, launched in 2022. It has been designed to help reduce unnecessary water and energy usage through features such as water saving technology and cold start valve. The water filter tap also reduces reliance on single use plastic water bottles.
Grant Westfield – 35 Years of Certification
In June 2022, following a rigorous audit process, Grant Westfield was recertified ISO 9001 compliant.
This prestigious accreditation highlights Grant Westfield’s adherence to internationally recognised best practices for quality management. It provides assurance to customers, partners, and stakeholders that the business has implemented stringent quality control measures, risk management processes, and a customer-centric approach throughout its operations. Moreover, it serves as a differentiating factor, demonstrating their commitment to quality and an ability to consistently deliver products that meet the highest standards.
The team at Grant Westfield were immensely proud to receive confirmation of certification and continue an impressive record of retaining this prestigious recognition for more than 35 years.
Grant Westfield, Forest Stewardship Council
Commitment to environmental responsibility is recognised through the Forest Stewardship Council® (FSC® C128180) and Programme for the Endorsement of Forest Certification (PEFC) chain of custody certifications. This ensures that the timber used originates from responsibly managed forests and the finished products comply with globally recognised ecological, social and economic standards.
These certifications form part of a rolling programme of environmental and sustainability initiatives within Grant Westfield’s manufacturing processes and its design approach including:
- sourcing materials and manufacturing in the UK to reduce carbon footprint where possible;
- recycling 99% of post-production waste into biomass materials and other products – reducing landfill and contributing to the circular economy;
- ensuring 100% of our panels are recyclable; and
- offering a 30-year warranty, giving peace of mind your bathroom will stand the test of time.
Our ambition:
Operate with integrity and respect to regulation and laws in all dealings.
Whistleblowing
Norcros encourages an environment where honest and open communication is expected, with employees feeling comfortable bringing forward any concerns or violations of Group policies.
Anti-bribery and corruption
Norcros prohibits bribery and all other types of fraud and will
take disciplinary and/or legal action as appropriate in all cases of actual or attempted fraud across all operations.
Human rights
Our corporate values focus on respect, integrity and fairness. We are committed to respecting the dignity of the individual and to supporting the United Nations (UN) Declaration of Human Rights, the UN Universal Declaration of Human Rights, and the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work and other core conventions.
Tax transparency
Norcros plc is committed to trading within the law and conducting all of its business activities in an honest and ethical manner. Our Tax Policy governs all of our business dealings and the conduct of all persons or organisations which are appointed to act on our behalf. Norcros plc and its subsidiaries has a zero-tolerance approach to all forms of tax evasion, whether under UK law or under the law of any foreign country.
Triton
In the last year there has been an increased focus on the resilience of Supply Chains; of which the ethical practices of suppliers is a key aspect. For many years Triton has utilised Service Level Agreements to fully document the expected standards of supplier activities covering ethical trading, modern slavery, anti-bribery, data protection (GDPR) and corporate criminal offences (CCO). The provision of this activity is regularly audited by Triton's purchasing and quality teams. In 22/23 activity in this area intensified in two areas. In response to UK Government advice, an audit of our complete supply chain was executed to ensure that there were zero transactions with Russian or Belarus own entities and we strengthened our Sustainability position requesting and detailing expectations from our suppliers on their Carbon Reduction Plans.
Chief Financial Officer’s report
The Group is in a strong financial position and is well placed to further progress its strategic priorities.
James Eyre
Chief Financial Officer