Norcros plc (LON:NXR) features in an exclusive interview with Gervais Williams, Co-Fund Manager of the Diverse Income Trust PLC, about some of the investments in the DIVI investment trust.
DirectorsTalk asked:
Norcros are a leading bathroom and kitchen business with customers such as well-known brands, Wickes, Screwfix and Barrett’s. Norcros are very focused on organic profitable growth and potential acquisitions. What’s your view on them?
Gervais Williams of Diverse Income Trust commented:
Overlooked – I think there’s lots of companies you might argue, aside from even the largest companies which are overlooked relative to international comparatives, but as you move down the size bands into small companies, then you find actually they’re more overlooked.
So, the valuation is lower, they generate surplus cash, they pay a good yield and they’ve had a good history of dividend growth and profit growth over the recent years.
It’s a shame in a way that their success isn’t being more recognised but what is interesting is that they are just keeping absolute focus on their customer service and improving their range of products. They’ve made some acquisitions along the way which have generated more cash – the cash generation has been excellent, the dividend payments have been excellent, ultimately that will drive return. Yes, the share price could have gone up even faster but even for investors over recent years it’s done just fine.
So, coming back to it, again, excellence really in terms of management team, excellence in terms of the way they’re running the company, excellence in terms of resilience due to the balance sheet. Again, we are tremendously upbeat about the potential longer term for Norcros.
