LSE:NXR

Stock Analysis Report

Executive Summary

Norcros plc, together with its subsidiaries, engages in the development, manufacture, and marketing of bathroom and kitchen products in the United Kingdom and South Africa.

Rewards

Trading at 53.7% below its fair value

Earnings are forecast to grow 11.55% per year

Earnings grew by 7.3% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Very undervalued with adequate balance sheet.

Share Price & News

How has Norcros's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NXR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-5.0%

NXR

6.2%

GB Building

5.9%

GB Market


1 Year Return

-30.5%

NXR

-11.5%

GB Building

-22.7%

GB Market

Return vs Industry: NXR underperformed the UK Building industry which returned -10.9% over the past year.

Return vs Market: NXR underperformed the UK Market which returned -18.8% over the past year.


Shareholder returns

NXRIndustryMarket
7 Day-5.0%6.2%5.9%
30 Day-39.5%-27.7%-23.1%
90 Day-52.5%-29.2%-28.1%
1 Year-27.8%-30.5%-8.6%-11.5%-18.6%-22.7%
3 Year-1.7%-12.5%-16.1%-23.7%-13.4%-24.7%
5 Year-2.4%-18.8%13.1%-3.6%1.3%-22.0%

Price Volatility Vs. Market

How volatile is Norcros's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Norcros undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NXR (£1.33) is trading below our estimate of fair value (£2.87)

Significantly Below Fair Value: NXR is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NXR is good value based on its PE Ratio (6.1x) compared to the Building industry average (10.7x).

PE vs Market: NXR is good value based on its PE Ratio (6.1x) compared to the UK market (12.7x).


Price to Earnings Growth Ratio

PEG Ratio: NXR is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: NXR is good value based on its PB Ratio (0.8x) compared to the GB Building industry average (0.9x).


Next Steps

Future Growth

How is Norcros forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NXR's forecast earnings growth (11.6% per year) is above the savings rate (0.5%).

Earnings vs Market: NXR's earnings (11.6% per year) are forecast to grow slower than the UK market (15.4% per year).

High Growth Earnings: NXR's earnings are forecast to grow, but not significantly.

Revenue vs Market: NXR's revenue (3% per year) is forecast to grow faster than the UK market (2.7% per year).

High Growth Revenue: NXR's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NXR's Return on Equity is forecast to be high in 3 years time (22.8%)


Next Steps

Past Performance

How has Norcros performed over the past 5 years?

11.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NXR has high quality earnings.

Growing Profit Margin: NXR's current net profit margins (5%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: NXR's earnings have grown by 11.3% per year over the past 5 years.

Accelerating Growth: NXR's earnings growth over the past year (7.3%) is below its 5-year average (11.3% per year).

Earnings vs Industry: NXR earnings growth over the past year (7.3%) exceeded the Building industry 2.3%.


Return on Equity

High ROE: NXR's Return on Equity (13.1%) is considered low.


Next Steps

Financial Health

How is Norcros's financial position?


Financial Position Analysis

Short Term Liabilities: NXR's short term assets (£172.6M) exceed its short term liabilities (£85.2M).

Long Term Liabilities: NXR's short term assets (£172.6M) exceed its long term liabilities (£121.7M).


Debt to Equity History and Analysis

Debt Level: NXR's debt to equity ratio (47.4%) is considered high.

Reducing Debt: NXR's debt to equity ratio has increased from 33.9% to 47.4% over the past 5 years.

Debt Coverage: NXR's debt is well covered by operating cash flow (57.5%).

Interest Coverage: NXR's interest payments on its debt are well covered by EBIT (9.3x coverage).


Balance Sheet

Inventory Level: NXR has a high level of physical assets or inventory.

Debt Coverage by Assets: NXR's debt is covered by short term assets (assets are 2.7x debt).


Next Steps

Dividend

What is Norcros's current dividend yield, its reliability and sustainability?

6.32%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NXR's dividend (6.32%) is higher than the bottom 25% of dividend payers in the UK market (2.65%).

High Dividend: NXR's dividend (6.32%) is low compared to the top 25% of dividend payers in the UK market (7.27%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, NXR has been paying a dividend for less than 10 years.

Growing Dividend: NXR's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (39.7%), NXR's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NXR's dividends in 3 years are forecast to be well covered by earnings (27.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.2yrs

Average management tenure


CEO

Nick Kelsall (62yo)

8.92s

Tenure

UK£950,316

Compensation

Mr. Nicholas P. Kelsall, also known as Nick, ACA has been the Chief Executive Officer at Norcros plc since April 1, 2011. Mr. Kelsall served as Group Finance Director of Norcros from October 1, 1996 to Apr ...


CEO Compensation Analysis

Compensation vs Market: Nick's total compensation ($USD1.18M) is above average for companies of similar size in the UK market ($USD330.32K).

Compensation vs Earnings: Nick's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nicholas Kelsall
Group CEO & Director8.92yrsUK£950.32k1.74% £1.9m
Shaun Smith
Group Finance Director & Director3.92yrsUK£640.37k0.16% £170.5k
Richard Collins
Group Counsel & Company Secretary6.75yrsno datano data
Jim Williams
Managing Director of Vado9.17yrsno datano data
Stephen Dixon
Managing Director of Johnson Tiles12.17yrsno datano data
Thomas Willcocks
Managing Director of Norcros SA (Pty) Ltd11.17yrsno datano data
Richard Wallis
Managing Director of Norcros Adhesives19.17yrsno datano data
David Tutton
Managing Director of Triton4.67yrsno datano data
Nick McGrellis
Managing Director of Croydex13.17yrsno datano data
Charlie Soden
Managing Director of Merlynno datano datano data

9.2yrs

Average Tenure

58yo

Average Age

Experienced Management: NXR's management team is seasoned and experienced (9.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nicholas Kelsall
Group CEO & Director8.92yrsUK£950.32k1.74% £1.9m
Shaun Smith
Group Finance Director & Director3.92yrsUK£640.37k0.16% £170.5k
Martin Towers
Independent Chairman7.33yrsno data0.24% £253.8k
David McKeith
Senior Independent Director6.67yrsno data0.022% £23.9k
Alison Littley
Non-Executive Director0.83yrno datano data

6.7yrs

Average Tenure

62yo

Average Age

Experienced Board: NXR's board of directors are considered experienced (6.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NXR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.7%.


Top Shareholders

Company Information

Norcros plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Norcros plc
  • Ticker: NXR
  • Exchange: LSE
  • Founded: 1999
  • Industry: Building Products
  • Sector: Capital Goods
  • Market Cap: UK£107.141m
  • Shares outstanding: 80.56m
  • Website: https://www.norcros.com

Number of Employees


Location

  • Norcros plc
  • Ladyfield House
  • Station Road
  • Wilmslow
  • Cheshire
  • SK9 1BU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NXRLSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 2007
NXRlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJul 2007

Biography

Norcros plc, together with its subsidiaries, engages in the development, manufacture, and marketing of bathroom and kitchen products in the United Kingdom and South Africa. The company manufactures and distributes electric, and mixer showers and accessories under the Triton brand name; shower enclosures and trays to the residential, commercial, and hospitality sectors under the Merlyn brand; taps, mixer showers, bathroom accessories, high end brassware, and valves under the Vado brand name; and accessories and furniture for the bathroom, such as toilet seats, wall-mounted cupboards, vanity units, shower rods, rails, and curtains to retail and trade customers under the Croydex brand name. It also offers kitchen taps, sinks, and hot water taps under the Abode brand name; ceramic wall and floor tiles under the Johnson Tiles brand name; and adhesives, grouts, and surface preparation products under the Norcros Adhesives brand name for fixing ceramic and porcelain tiles, mosaics, natural stones, and marbles. In addition, the company provides tile adhesives, pourable floor coverings, and tiling tools for various types of ceramic, porcelain, or natural stone tiles; and various products for the preparation of floors before the installation of hard and soft floor coverings, including primers, additives, patching and repair compounds, and screeds and self-levelling screeds, as well as waterproofing systems under the TAL brand name, as well as specialist plumbing materials under the House of Plumbing name. Further, it retails wall and floor tiles, adhesives, showers, sanitaryware, and bathroom fittings under the Tile Africa brand name. The company serves consumers, architects, designers, retailers, and wholesalers. Norcros plc was incorporated in 1999 and is headquartered in Wilmslow, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 21:30
End of Day Share Price2020/03/27 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.