| FY24 Matching Up To Our Expectations | Equity Development

11th Apr by Equity Development

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Norcros (LON:NXR)

In meeting expectations for FY24, Norcros has demonstrated business resilience in the face of challenges in both of its primary markets. A positive cash flow performance has also left year end pre IFRS16 gearing below 0.9x underlying EBITDA.

In our view, neither virtue is reflected in the company’s valuation and the 1 May Capital Markets event should help to shed more light on the company’s strategy, market positions and medium-term prospects.

Encouragingly, UK margins improved further whereas in South Africa load shedding is abating and revenues stabilised. With net cash inflows, the group ended FY24 with c.£37m net debt (pre-IFRS16) versus c.£50m a year earlier.

Our fair value of 233p / share (very close to the H124 NAV / share) is unchanged and represents potential c.32% upside in a re-rating scenario.

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Equity Development

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