UPDATE: Norcros Pins Growth Hopes On New Products

22nd Jun 2010 16:34

(Adds CEO comment, detail) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Bathroom fittings group Norcros PLC (NXR.LN) said Tuesday it will continue investing in new products this year in a bid to pick up more market share, as it reported solid improvements in parts of its business that were felled by the global recession. Norcros spent GBP3.9 million in its fiscal 2010, ending March 31, investing in new products at its Triton showers business, ink jet technology in its U.K. tiles business, new stores and store upgrades. "Most of our capex this fiscal will be focused on new product development, which we hope will give us an edge," Chief Executive Joe Matthews told Dow Jones Newswires. The firm's business spreads countries like Australia and Greece and the challenging economic environment throughout the recession has led to tough trading conditions. Its fiscal 2010 result was dented by tough trading overseas, countering a solid performance in the U.K. Trading has been particularly tricky in South Africa and Greece, although Matthews said trading at its South African business was "much-improved" in the fiscal 2010 second half and in more recent months the business has started turning a profit. Yet trading remains tough in Greece, where Norcros has a 50% stake in Philkeram Johnson, a tile and adhesives business. It said the business continues to be impacted by the prolonged downturn in local building activity levels. Norcros's fiscal 2010 pretax loss more than doubled on the year to GBP10 million from a GBP4.8 million loss a year earlier, on the back of higher costs. It paid out GBP8.2 million of exceptional operating items, compared with GBP7.7 million last year, for things like overseas store closures. But stripping out charges, Norcros made a pretax loss of GBP1.8 million compared with a GBP2.9 million profit a year earlier. It made a trading profit--or operating profit before exceptional items and other operating income--of GBP7.3 million. Revenue rose on the year to GBP169.6 million from GBP154.2 million, aided by solid trading in the U.K. and the strength of the South African rand and Australian dollar compared with the pound. "We managed to improve margins in the U.K [in the fiscal] and saw an improved trading profit. It's positive for us that while the market has been going backwards, we've been able to grow revenue," Matthews said. Norcros, which completed a GBP27.7 million fundraising in fiscal 2010, said while the outlook for consumer spending in the U.K. remains uncertain it has made an "encouraging" start to the current fiscal. CEO Matthews retires next year and will be replaced by current Finance Director Nick Kelsall. The company has started its search for a replacement finance director. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires June 22, 2010 11:34 ET (15:34 GMT)