Norcros Plc (LON:NXR) has reported a solid start to its 2027 financial year, with organic revenue growth supported by continued market share gains and pricing across its key regions.
In its latest research note, Shore Capital said Norcros achieved organic revenue growth of 3.1% during the 13 weeks to 5 July 2026. This performance came despite continued softness in underlying market demand, suggesting that the bathroom and kitchen products group is benefiting from its established brands, service levels and product positioning.
Reported revenue increased by 27.9%, reflecting the contribution from Fibo, the wall panel business acquired by Norcros in October 2025. Following the first-quarter update, Shore Capital left its forecasts unchanged and said management’s expectations for the full financial year also remained unchanged.
Research Analyst Tom Fraine, CFA, highlighted the broker’s positive valuation view, writing: “We maintain our 630p target price (99% upside).”
The target price compares with the 317p share price stated in Shore Capital’s research note dated 22 July 2026. The broker classifies Norcros as a “House Stock”, rather than applying a formal buy, hold or sell recommendation.
Norcros First-Quarter Trading Highlights
- Organic revenue increased by 3.1% during the 13 weeks to 5 July 2026.
- Reported revenue grew by 27.9%, including the contribution from the Fibo acquisition.
- Management’s expectations for the 2027 financial year remained unchanged.
- Market share gains and price increases helped offset weaker underlying market demand.
- Shore Capital maintained its forecasts and 630p target price.
Shore Capital believes Norcros’s brands and its positions within the mid-to-premium parts of its markets have supported the company’s ability to implement price increases. The broker also identified new product development, cross-selling, service standards and sustainability credentials as factors contributing to market share gains.
The 3.1% organic growth reported for the first quarter was consistent with the growth disclosed for the first two months of the financial year alongside Norcros’s full-year results in June. Shore Capital described the performance as reassuring in the context of difficult market conditions.
Progress Against Medium-Term Targets
Norcros also continues to make progress against the medium-term targets presented at its Capital Markets Day in May 2024.
For the year ended March 2026, the group delivered an underlying return on capital employed of 20.0%, an improvement of 270 basis points from the previous year. This matched its medium-term target.
Excluding the South African operations that Norcros has been considering selling, the company achieved an underlying operating margin of 15.2%. This was slightly ahead of the group’s 15% medium-term objective.
Cash conversion reached 116% during the 2026 financial year, comfortably exceeding the company’s target of more than 90%. Norcros also reported that it was ahead of its 2028 Science Based Targets initiative carbon reduction target for Scope 1 and Scope 2 emissions.
Financial Forecasts
Shore Capital forecasts revenue of £440.9 million for the year ending March 2027, compared with £393.4 million in the previous year. Adjusted EBITDA is forecast to rise from £49.5 million to £59.5 million, while adjusted pre-tax profit is expected to increase from £40.9 million to £43.4 million.
Adjusted diluted earnings per share are forecast at 37.4p for 2027, rising to 42.2p in 2028. The broker also expects net debt, excluding leases, to reduce from £65.8 million in 2026 to £54.8 million in 2027 and £41.2 million in 2028.
Shore Capital noted that two issues previously raised by investors could become less significant. Norcros has announced its intention to explore a sale of its South African businesses, while pension deficit payments are expected to cease within 12 months.
Final Thoughts
Norcros’s first-quarter update indicates that the company is continuing to grow organically despite a challenging market backdrop. Market share gains, pricing and the contribution from Fibo have supported revenue, while management has maintained its expectations for the year.
The company’s progress on margins, returns and cash conversion also provides evidence of delivery against its medium-term objectives. Although market conditions remain uncertain, Shore Capital’s forecasts are unchanged and the broker continues to see a substantial difference between its target price and the share price stated in the research note. The note is an issuer-sponsored, non-independent marketing communication produced under an agreement between Shore Capital and Norcros.
