Norcros plc (LON:NXR), a market-leading designer and supplier of high quality bathroom and kitchen products in the UK, Europe and South African markets, has announced that following a strategic review, it has entered into an agreement to sell Johnson Tiles UK to its existing management team.
Johnson Tiles UK, based in Stoke-on-Trent UK, designs, manufactures and sources ceramic floor and wall tiles. For the full year ended 31 March 2023 Johnson Tiles UK recorded revenue of £35.3 million, representing 8% of Group revenue, made an operating profit of £0.5 million representing 1% of Group underlying operating profit, had gross assets of £25 million, and has absorbed cash in each of the last three years.
Consideration for the sale will be £1 million, with a further modest earn out being dependent on the future equity value of the business, with both payable in April 2028. The trade and assets are to be transferred to Johnson Tiles Limited, a new company established by Managing Director, Stephen Dixon, and his management team. The sale is expected to complete during May 2024 after the conclusion of the customary employee consultation period. The proceeds of the sale will be used for general working capital purposes.
One off cash costs of less than £1 million, associated with the sale, and non-cash balance sheet impairments of c. £15 million will be separately reported as exceptional items in our full year results to 31 March 2024. Johnson Tiles Limited will continue to be based at the Stoke-on-Trent site, which will be retained by the Group.
Norcros will announce its full year results for the year ended 31 March 2024 on 13 June 2024.
Thomas Willcocks, CEO of Norcros plc, said:
“In June 2023, we communicated our strategic priorities, namely Portfolio Development, Organic Growth, Operational Excellence and ESG and we will continue to ensure that our capital allocation is aligned accordingly. This sale will allow Norcros to focus on and accelerate the execution of our growth strategy. Johnson Tiles UK has been a long-standing partner of the Group and we thank them for their significant contribution. We wish Stephen and the team every success for the future.”
