NXR: Higher Dividend Will Support Future Margin Expansion And Returns

Analysts have nudged their price target for Norcros slightly higher to reflect incremental improvements in fair value estimates, modestly stronger projected profit margins, and a marginally higher long term valuation multiple.

What's in the News

• Norcros management highlighted an active M&A strategy, cultivating relationships with potential targets over a 1 to 3 year horizon to sustain a well developed acquisition pipeline (Interim Results Presentation).
• The Board declared an increased interim dividend of 3.7 pence per 10 pence ordinary share for the year ending 5 April 2026, up from 3.5 pence, citing resilient first half performance and confidence in future prospects (Company announcement).
• The interim dividend will be paid on 13 January 2026 to shareholders on the register as of 28 November 2025, with shares trading ex dividend on 27 November 2025, and shareholders able to participate via the Dividend Reinvestment Plan by electing by 18 December 2025 (Company announcement).

Valuation Changes

• The fair value estimate has risen slightly to £4.46 per share from £4.39, reflecting a modest uplift in long-term value expectations.
• The discount rate has increased marginally to 9.44 percent from 9.37 percent, implying a slightly higher required return and risk premium.
• The revenue growth assumption is broadly unchanged at 9.44 percent, edging up only marginally from 9.44 percent previously.
• The net profit margin forecast has risen slightly to 7.71 percent from 7.60 percent, indicating expectations for modestly better profitability.
• The future P/E multiple has increased marginally to 13.74x from 13.70x, suggesting a small improvement in the valuation the market may ascribe to future earnings.