Having completed the Fibo deal earlier in the week, Norcros has followed up with a solid, above market H1'26 trading update and unchanged guidance. Strategic delivery through operational excellence and highly complementary M&A is clearly being executed well and, notwithstanding market variability, Norcros is maintaining forward momentum.
Norcros delivered a marginally better underlying revenue performance in H1'26 overall with the headline c.£184m also boosted by an additional trading week. In generating EBIT of c.£21.8m, a margin of c.11.9% represents a c.70bp yoy improvement from continuing operations (ie excluding JTSA) on our estimates.
Consumer confidence metrics remained subdued in both the UK and South Africa despite interest rate reductions in the period, and end demand reflects this, so progress by Norcros appears to be hard-won and ahead of its underlying markets.
Although Norcros’ share price ticked better on the Fibo deal confirmation, it remains below our existing 300p per share value which we will review for trading newsflow and the Fibo acquisition when H1'26 results are reported in November.
Valuation remains undemanding on all metrics in our view, and we would expect ongoing strategic delivery to result in further shares’ rerating.
