ANNUAL REPORT &
ACCOUNTS 2024
FOR THE YEAR ENDED 31 MARCH 2024
A POWERFUL CHOICE
FOR BETTER LIVING
NORCROS PLC ANNUAL REPORT & ACCOUNTS 2024
THE UK & IRELAND’S
NO.1 BATHROOM
PRODUCTS GROUP
We craft design-led, sustainable bathroom
and kitchen products. But even more than
that, our business is about people – our
customers, our employees, our society and
the way we live.
WE OFFER A POWERFUL CHOICE
FOR BETTER LIVING.
Who we are
We are a group of market-leading brands that
design and supply sustainable bathroom and
kitchen products in the UK, Ireland and South
Africa in addition to selected export markets.
What we offer
We go to market through product-specialist
brands. They each supply high-quality, design-
led products aimed at the mid to premium end
of the market.
How we’re differentiated
We stand out from the crowd because our
in-house design teams create innovative and
sustainable products and we offer outstanding
customer service. Our brands are strong
individually, and even better together.
Our culture
We have an inclusive and growth-focused
culture. We foster a caring, collaborative and
innovative environment in which our people can
bring ideas to life, build long-lasting relationships
and fulfil career and personal goals.
READ MORE ABOUT OUR PEOPLE PILLAR
WITHIN THE SUSTAINABILITY SECTION ON
PAGES 56 TO 66
READ MORE HOW OUR ESG STRATEGY
MAPS TO THE UNSDGS ON PAGES 52 TO 55
OVERVIEW
WELCOME TO THE NORCROS
ANNUAL REPORT 2024
OVERVIEW
Group Highlights 02
Norcros – Design-Led... Sustainability Driven 04
Group at a Glance 06
Our Successful History 12
Why Invest In Norcros 14
Chair’s Statement 16
STRATEGIC REPORT
Business Model 20
Our Marketplace 22
Our Strategy 26
Chief Executive Officer’s Review 30
Key Performance Indicators 34
Business Review UK & Ireland 36
Business Review South Africa 38
Chief Financial Officer’s Review 40
Chief People Officer’s Review 44
Our Approach to Sustainability 48
Our Sustainability Strategy 50
– People 56
– Product 67
– Planet 74
TCFD 90
Principal Risks and Uncertainties 106
Stakeholder Engagement 118
Non-financial and Sustainability
Information Statement
124
CORPORATE GOVERNANCE
Board of Directors 128
Governance at a Glance 130
Chair’s Introduction 132
Governance Key Highlights 134
Corporate Governance Report 136
Audit and Risk Committee Report 140
Nomination Committee Report 146
Remuneration Committee Report 150
Directors’ Remuneration Policy Report 153
Annual Report on Remuneration 162
Directors’ Report 172
Statement of Directors’ Responsibilities 175
FINANCIAL STATEMENTS
Independent Auditor’s Report 178
Consolidated Income Statement 187
Consolidated Statement of
Comprehensive Income
187
Consolidated Balance Sheet 188
Consolidated Cash Flow Statement 189
Consolidated Statement of Changes
in Equity
190
Notes to the Group Accounts 191
Parent Company Balance Sheet 226
Parent Company Statement of Changes
in Equity
227
Notes to the Parent Company Accounts 228
Welcome from our CEO
I am delighted to present the Annual Report and Accounts for my
first full year as Chief Executive Officer of Norcros plc. It has been
an incredible year full of development and progress, which will
continue to accelerate as we build on our strong track record and
move into our next phase of growth.
Our journey
Our organic growth and strong M&A strategy have built us into the
UK and Ireland’s number one bathroom products group, but we’re
not stopping there. We have big ambitions of continued growth
with our updated strategy and emphasis on putting people first.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 01
OVERVIEW
Q & A
with Chief Executive Officer Thomas Willcocks
Q
This was a robust performance given market
conditions – what were the main drivers of
this outperformance?
A
The main driver was a record performance in the UK and Ireland,
where, although revenue was 3.2% lower than the prior year on
a like for like basis (adjusting for Grant Westfield and Norcros
Adhesives), we managed to profitably grow organic market share.
We benefited from a strong focus on new product development and
collaborative cross-selling initiatives. In addition, our brands were able
to collectively leverage our scale in terms of controlling costs.
Q
What were some of the major challenges the
Group faced this year?
A
The market remained challenging in both our core geographies,
with specific energy-related challenges in South Africa. There
are three key takeaways from this. Firstly, the South African
management team did an excellent job proactively managing the
business through exceptional energy interruptions. Secondly, our
results reemphasised the importance of a diversified customer and
geographic base. Thirdly, it underscored the benefit of our mid-
premium positioning of our market-leading brands and the overall
resilience of our business.
Our management teams have again responded well and we
are well-positioned to continue growing market share in our
core markets.
Q
Your cash generation remains strong — any
insights here?
A
We have a proven track record when it come to cash generation,
and, given market conditions, this remained a key focus area for
all our teams through the year. Pleasingly, we remain well-invested
when it comes to stock and service levels, which differentiates us
from a large number of our competitors.
Our balance sheet is in excellent shape, allowing us to continue to
invest in profitable business growth and scale-based efficiencies.
REVENUE
£392.1M
2023: £441.0m
UNDERLYING
OPERATING PROFIT
£43.2M
2023: £47.3m
PROFIT BEFORE TAX
£32.6M
2023: £21.7m
NET DEBT
1
£37.3M
2023: £49.9m
1
pre-IFRS 16
UNDERLYING
OPERATING MARGIN
11.0%
2023: 10.7%
OPERATING CASH
CONVERSION
123%
2023: 89%
Financial highlights
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202402
OVERVIEW
GROUP HIGHLIGHTS
Science Based Targets initiative
(SBTi)
Our emission targets for near-term and long-term net
zero emissions have been validated and approved
by the Science Based Targets initiative (SBTi) and we
continue to make progress to reduce our emissions.
We continue to invest in carbon
reduction initiatives and minimise
our environmental impact
Our Triton, VADO and Abode businesses have
achieved Carbon Neutral status. Grant Westfield
has achieved certification of their Environmental
Management system to the ISO 14001 standard.
Johnson Tiles UK achieved Gold status at the Supply
Chain Sustainability School and became the first tile
factory in the world to achieve BES6001 (Responsible
Sourcing in Construction) certification.
Sustainable Products Framework
We are developing a framework and methodology to
classify our products as sustainable, based on both
environmental and social criteria, which will allow us
to track and monitor sales of our sustainable products
going forward.
READ MORE IN THE SUSTAINABILITY SECTION
ON PAGES 48 TO 89
Existing UK & Ireland market share
(core categories only)
Circa 15%
Norcros UK
& Ireland
market share
(excluding
bathroom
furniture and
sanitaryware)
We are the UK and Ireland’s number one
bathroom products group.
Our UK business delivered a record performance
driven by new product launches, collaboration and
outstanding customer service. Underlying operating
profit increased by £1.2m to £38.4m.
We are well-placed to continue growing market share
and winning new customers in our target market
segments by leveraging our strong new product
development pipeline, Group relationships and
collaboration and superior customer service.
Existing South Africa market share
Circa 7%
Norcros
South Africa
market share
We are South Africa’s second largest
bathroom products group.
Against challenging conditions, our South Africa
business delivered a resilient performance in the year
by delivering high levels of customer service and
through excellent stock availability. Due to market
challenges, underlying operating profit decreased by
£5.3m to £4.8m.
We remain in a strong competitive position and
well placed to gain market share as conditions and
consumer confidence gradually improve.
Sustainability highlightsRegional highlights
OVERVIEW
03NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024
What Design-led means
for Norcros
We are fully focused on designing outstanding
products. This starts with focusing on the consumer.
We align our people, processes and systems with achieving
fashionable design, well-engineered products and a culture
of innovation.
Our in-house design teams are crucial in achieving this. They
are responsible for understanding trends in fashion, regulatory
requirements, and continuing to develop new products and
new ranges. They develop bespoke designs and work with
our carefully selected suppliers to ensure they meet consumer
needs and wants.
Our specialist engineering teams are increasingly focused
on solving the sustainability challenges associated with
energy and water. These teams develop sustainable products,
including electric showers. They work with our design teams
and supply chain to ensure our products are well-engineered
– safe, durable, ergonomic and sustainable – as well as
fashionable.
We continue to innovate. We focus on investment in new
products and closely monitor our product vitality rates
(revenue in the last year derived from products launched
in the last three years). This is a key driver of our ahead-of-
market organic growth.
Award-winning taps by Abode
Abode’s Pronteau hot water taps are exclusively
designed in the UK by their technical design team,
who are renowned for crafting award-winning tap
designs paired with technical superiority. The latest
addition, the Pronteau Scandi collection, won the
prestigious Ideal Home Kitchen Award (2024) for the
best hot water tap.
The Pronteau Scandi collection is the UK’s first
Scandinavian-style instant hot water tap. It is
designed with a distinct monobloc silhouette, real
FSC® Approved beechwood handles, and three on-
trend finishes in Matt White, Matt Black and Scandi
Grey. The Scandi collection offers 4-in-1 functionality
with hot, cold, filtered cold and 98° instant hot water.
The Pronteau Scandi collection is just one of Abode’s
trend-inspired instant hot water taps, boasting truly
traditionally-styled products, industrial-inspired design
and streamlined contemporary styles. There’s a design
for every household.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202404
OVERVIEW
NORCROS – DESIGN-LED...
Sustainability driving our
competitive advantage
We are increasingly focused on the sustainability
of our product portfolio.
As a leading bathroom and kitchen products supplier,
it is our responsibility to play a leading role in making
products more sustainable. This is the right thing to do.
Importantly, it also enhances our competitive advantage and
growth opportunities.
Competitive advantage. Developing more sustainable
products is attractive for our customers. For our business-to-
business customers, we reduce their scope 3 emissions and
enable them to provide more sustainable products for their
customers. Products with lower carbon and lower lifetime
energy and water usage are more attractive to consumers
from an environmental and cost perspective.
Growth opportunities. We see an increasing market for
sustainable products in the future. This includes products
with enhanced environmental characteristics and products
that meet the needs for the ageing population. We will
lead these growth markets as we continue to focus on
sustainable products.
In the current year, we will publish our Sustainable Products
Framework. We will use this to assess the relative sustainability
features of our product portfolio and to provide ESG
information on our products to our customers and prioritise
where we invest in new product development.
Triton achieves a King’s award
for Enterprise
Triton Showers has been honoured with a King’s
Award for Enterprise in recognition of its outstanding
commitment to Sustainable Development, which
places sustainability at the heart of its long-term
business strategy and net zero ambitions.
First established in 1965, the King’s Awards for
Enterprise are one of the most prestigious awards for
UK businesses, celebrating the success of exciting and
innovative organisations that are leading the way.
Triton has set ambitious targets for reducing its carbon
footprint and impact on the environment, whilst
embedding sustainability at all levels of the business –
from the top down.
David Tutton, Managing Director at Triton,
commented: “Given our market-leading position, we
believe it is our responsibility to champion the water,
energy and carbon-saving benefits of showers at
every opportunity. We are, therefore, delighted to
receive a King’s Award for Enterprise in Sustainable
Development, which is testament to the hard work of
everyone within our organisation who is contributing
towards delivering change.
Going forward, we are committed to achieving an
ambitious ‘Net Zero by 2035’ target, with a near-term
alignment target of 2028. There is a lot more to do, but
we are moving the dial and delivering solid progress,
which makes the recognition we have received from
the King’s Award for Enterprise so very special.”
This prestigious award is the latest in an award-
winning year for Triton, including being recognised
by PlanetMark as a Carbon Neutral business and
winning their “Sustainability campaign of the year”
award, a Silver rating from EcoVardis, and BMA’s
Carbon Reduction Award.
Case Study
2024
T
H
E
K
I
N
G
’
S
A
W
A
R
D
S
F
O
R
E
N
T
E
R
P
R
I
S
E
S
U
S
T
A
I
N
A
B
L
E
D
E
V
E
L
O
P
M
E
N
T
OVERVIEW
05NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024
...SUSTAINABILITY DRIVEN
We have developed a balanced portfolio of
bathroom and kitchen products brands.
Approximately two-thirds of Group revenue is delivered from the UK and
Ireland with the balance in South Africa. Our regional footprint gives our
brands and product ranges a range of routes to market. The regional
balance also helps to manage the cyclical nature of regional economies.
We have developed our Group by acquiring and growing great brands.
We operate as a Group of autonomous brands that manage
complementary, product-based businesses. In the UK and Ireland, our
brands cover most product categories in the bathrooms market in addition
to kitchen taps and sinks. In South Africa, we are a vertically integrated
designer, manufacturer, supplier and retailer of tiles, adhesives and other
bathroom products.
Each brand is driven by product and sector specialists. This specialism is
crucial and helps us to differentiate.
We collaborate across our brands to drive scaled-based growth and
efficiency. We have put in place growth accelerators in cross-selling, key
account management, new product development and marketing that
facilitate collaboration and knowledge share across the Group to drive
growth. We regularly collaborate across the Group where we can use
our collective scale to drive efficiency, lower costs and improvements to
customer service.
Our brands are orientated towards the more resilient mid-premium price
point where we deliver high-quality, fashionable products through trade,
retail and online channels.
Our diversified portfolio is a great platform for growth.
Our brands
South Africa
UK & Ireland
OUR
DIVERSIFIED
PORTFOLIO
IS A GREAT
PLATFORM FOR
GROWTH
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202406
OVERVIEW
GROUP AT A GLANCE
OUR BRANDS
Norcros accelerating the growth of Merlyn
The perfect fit – Merlyn and Norcros are more than the sum
of the parts
Norcros acquired Merlyn in 2017. Since this time, Merlyn has grown
revenue from £30.7m (in financial year ending March 2017) to £56.5m
(in financial year ending March 2024), whilst maintaining leading
operating margins.
Merlyn has benefited from four key growth drivers by being part of the
Norcros Group and collaborating with our other brands:
• Continued Group investment in people, new product development
and brand
• Cross-selling, including introductions for Merlyn into housebuilders
(e.g. Barratt Homes) and new channels (e.g. Wickes) where they have
developed new customer relationships
• Utilising other brands across the Group to develop new routes to
market, for example, Merlyn entered Screwfix under the Triton brand
• Group financial strength has enabled Merlyn to quickly establish
commercial relationships with large customers and invest in
customer service
This case study demonstrates how the Group adds value to newly
acquired businesses and how we are more than the sum of our parts.
Our segmentation
9%
7%
18%
12%
4%
6%
3%
5%
14%
S
o
u
t
h
A
f
r
i
c
a
U
K
14%
8%
Case Study
£282m
UK &
Ireland
£110m
South
Africa
£38m
UK &
Ireland
£5m
South
Africa
Revenue split by brand
Revenue split by UK & Ireland
and SA
Underlying operating profit split
by UK & Ireland and SA
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 07
OVERVIEW
Product-focused brands cover most categories
in the bathroom and kitchen market
Wall coverings
A modern alternative to tiles.
Looks like tile, performs like
a panel. Now also available
outside of the bathroom with
Naturepanel
Bathroom tiles
Top-quality tiles for flooring and walls,
supported by expert advice
Accessories
Toilet seats, cabinets,
mirrors and more.
Patented easy-fit systems
for simple installation
Plumbing materials
A wide range of plumbing
materials and fittings for
professional and DIY use
Showers
Sustainable
electric showers,
mixer showers
and shower
accessories
Enclosures and trays
Expertly crafted shower screens, doors and
trays in a range of finishes. Bespoke design
service for made to measure enclosures
Brassware (bathroom)
Beautifully-designed taps and
accessories in a range of styles
and finishes
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202408
OVERVIEW
GROUP AT A GLANCE
OUR CURRENT PRODUCT OFFERING
Brassware (kitchen)
Beautifully-designed taps and accessories in a
range of styles and finishes. WRAS-approved
steaming hot water taps under the Pronteau
brand by Abode
Kitchen tiles
Top-quality tiles for flooring and walls,
supported by expert advice
Tile and building adhesives
Quality tiling installation
material such as screeds,
grouts and adhesives and the
necessary tools. Made in South
Africa and perfect for the local
climatic conditions
The complementary nature of our portfolio provides opportunities for cross-
group product ranges. For example, for specific ranges, we match finish colours
across products so customers can purchase a matching VADO or Triton shower
with a Merlyn shower enclosure.
The complementary portfolio also provides opportunities to bundle products
together in product displays and for specific customer projects. For example,
we often bring together wall panels, showers and shower enclosures from our
different brands into a single trade display; this drives demand for the collection
rather than just an individual product.
As we continue to develop our Group, there are opportunities to develop our
position in bathroom furniture and sanitaryware. Given the large and fragmented
nature of the bathroom products market, this could be through organic or
acquisitive growth.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 09
OVERVIEW
Breadth and depth of customer relationships provides opportunities for growth
UK and Ireland
We have broad routes to market across trade, retail and online channels and a significant export business, and a strong
customer list with over 1,000 blue chip customers and with many long-term relationships. Norcros brands are often selected
because of strong product design, quality and customer service.
Trade and specification
Independent, specialist and online
DIY retail
Export
64%
14%
12%
10%
NORCROS
TOMORROW
GROWTH
PLAN
THE
OPPORTUNITY
NORCROS
TO DAY
01 0302 04
POSITIONING: STRONG CUSTOMER RELATIONSHIPS
(with NA & Johnson Tiles)
Norcros Today
Trade and specification
Independent, specialist
and online
DIY retail
Export
Cultivating strong, long-term relationships with blue-chip customers is key to our success
64%
12%
12%
11%
1% of UK revenues to other channels
NORCROS PLC CAPITAL MARKETS DAY 14
NORCROS
TOMORROW
GROWTH
PLAN
THE
OPPORTUNITY
NORCROS
TO DAY
01 0302 04
POSITIONING: STRONG CUSTOMER RELATIONSHIPS
(with NA & Johnson Tiles)
Norcros Today
Trade and specification
Independent, specialist
and online
DIY retail
Export
Cultivating strong, long-term relationships with blue-chip customers is key to our success
64%
12%
12%
11%
1% of UK revenues to other channels
NORCROS PLC CAPITAL MARKETS DAY 14
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202410
OVERVIEW
GROUP AT A GLANCE
OUR DIVERSIFIED CUSTOMER BASE
Retail and trade
Export
Commercial, including Supply & Fit
South Africa
In South Africa, we go to market through similar channels, in addition to directly to consumers through our Tile Africa retail and
House of Plumbing specialist plumbing supply businesses.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 11
OVERVIEW
A STRONG TRACK RECORD
OF PERFORMANCE
1
Definitions and reconciliations of alternative
performance measures are provided in note 8.
REVENUE (£M)
£m
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
0
100
200
300
400
500
219
222
236
271
300
331
324
396
441
342
392
UK & Ireland
South Africa
Organic growth enhanced
by successful acquisitions
UNDERLYING RETURN ON
CAPITAL EMPLOYED (%)
1
%
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
0
5
10
15
20
25
15.0
16.3
18.3
18.4
18.0
18.2
18.2
23.9
18.5
16.4
16.4
COVID
effect
Consistently achieved a
strong return on capital
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202412
OVERVIEW
OUR SUCCESSFUL HISTORY
UNDERLYING OPERATING
PROFIT (£M)
1
£m
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
0
10
20
30
40
50
16.1
17.0
21.3
23.8
27.4
34.4
33.8
41.8
47.3
32.3
43.2
UK & Ireland
South Africa
Strong profit post
pandemic enhanced by
Grant Westfield
PRE-CAPEX CASH
CONVERSION (% OF
UNDERLYING EBITDA)
50
100
150
200
%
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
0
92
100
76
99
92
96
174
63
89
123
99
COVID
effect
Consistently high cash
conversion
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 13
OVERVIEW
Market leader in design-led, sustainable bathroom and kitchen products
Market-leading brands
• Design-led, sustainable product
development
• Leading positions in UK & Ireland
and South Africa
Resilient model
• Diversified portfolio enables
resilience through the cycle
• Mid-premium positioning
reduces exposure to cost of
living pressures
Benefits of scale
• Leading positions and
investments in customer service
drive organic growth
• Scale and collaboration across
Group enable growth and
operational excellence
Proven track record
• Successful M&A track record
• Revenue and profit growth with
excellent cash performance
• Disciplined capital allocation
• Progressive dividend policy
01
03
02
04
Significant opportunity to accelerate organic
and M&A growth and quality of earnings
Large and
fragmented market
Growth in sustainable
products markets
Opportunities to
drive efficiency and
share gains
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202414
OVERVIEW
WHY INVEST IN NORCROS
WE ARE READY
FOR OUR NEXT
PHASE OF
GROWTH
Track record of M&A and
organic growth
Market-leading brands
Diversified products
and channels
Differentiated by design
and customer service
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 15
OVERVIEW
Results in line with market
expectations
In my first year as Chair, I am pleased to report a robust
performance for the Group with underlying operating profit
in line with market expectations, despite challenging macro
conditions. The strong operating profit performance was
supported by another year of excellent cash conversion, a key
attribute of our business.
The team has once again demonstrated the strength of our
business model and, especially, our ability to perform through
the cycle. The focus on the more resilient mid-premium
positioning of our brands means that we are less cyclical, which
sets us apart from many other building product businesses.
Clear Strategy
Our Capital Markets Event in May 2024 saw the launch of
the Group’s updated strategy and the communication of new,
ambitious, and deliverable medium-term targets, outlined on
page 27. The business has successfully developed a position
as the number one bathroom and kitchen products business
in the UK and Ireland, and has proven growth accelerators
that will advance the quality and the level of the earnings
going forward.
Thomas Willcocks summarises the updated strategy in his
Chief Executive Officer’s Review on pages 30 to 32, and for
additional information I would encourage you to watch the
Capital Markets Event video on our website www.norcros.com
where you will see and hear about our strategy, including
our key growth accelerators, from the talented team that are
driving our business forward at both a Group and brand level.
ESG
ESG is a broad and integral part of who we are and what
we do, and underpins our business strategy. We are proud
of our history of environmental and social leadership, our
achievements in setting industry-leading standards with our
products, and the support we provide to the communities
that we live and work in. Our culture of putting in more than
we take out ensures how we do things is just as important as
what we do.
I was attracted to Norcros because it
is a great and differentiated business
with significant growth opportunities
and, most importantly, it has the
talented people to deliver them.”
STEVE GOOD
Chair
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202416
OVERVIEW
CHAIR’S STATEMENT
The Board is committed to the key role that sustainability
plays, and will increasingly play, in our business strategy
given changing consumer preferences for the products
they purchase and increasing regulatory drivers, such as
the Future Homes Standard in 2025. Of particular note, I
want to recognise and congratulate the team at Triton, our
market-leading shower brand, for being honoured with the
King’s Award for Enterprise in recognition of its outstanding
commitment to sustainable development. This is a fantastic
achievement and demonstrates our commitment to placing
sustainability at the core of our long-term business strategy.
Strength and depth of talent
Given our decentralised business model, we recognise the
importance and quality of the teams that are managing and
growing each of our brands. On behalf of the Board, I would
like to specifically thank these teams both individually and
collectively for their efforts, which helped generate further
momentum on the Group’s strategic objectives over the last
12 months.
When I look at our broader management team, there is an
excellent balance between homegrown talent, as evidenced
by our Chief Executive Officer and Chief Financial Officer,
and our ability to recognise and attract the very best people
outside of the Group. We continue to invest in our existing
teams and recruit exceptional new talent. In particular we
were pleased, at Group level, to have welcomed Helen Gopsill,
Chief People Officer, and Helene Roberts, Managing Director
of the UK and Ireland, to our senior Norcros leadership team
in the past year.
As we go about what we do every day, we are committed to
ensuring a safe and positive working environment within our
open, collaborative and low-ego culture.
Board changes
I would like to thank David McKeith, who retired in July 2023, for
his invaluable contribution to the Board over many years with
Norcros. I am pleased that Rebecca DeNiro will be joining the
Board as an additional Non-executive Director from 1 July 2024.
Rebecca brings a wealth of relevant experience in well-known
consumer brands such as Dyson and Regatta and we are
delighted that she is as excited about the future of Norcros as
we are.
Dividend
For the year ended 31 March 2024, the Board is recommending
a final dividend of 6.8p (2023: 6.8p) per share. When combined
with the interim dividend of 3.4p (2023: 3.4p) per share, which
was paid on 16 January 2024, this will make a total dividend for
the year of 10.2p (2023: 10.2p) per share, in line with the previous
year and maintaining an appropriate level of dividend cover.
Acting responsibly
The Board leads an ongoing program to ensure the highest
standards of corporate governance and integrity across the
Group and has remained abreast of developing governance
standards. The Board’s interaction and communication with
Executive Management is excellent and, as a result, the Board is
well placed to challenge, guide, and support the executive team
in the delivery of our growth strategy.
We continue to pay particular attention to the provision of
a safe working environment for our staff across all locations
and to the empowerment of our employees. The Board also
acknowledge the benefits of diversity, including gender and
ethnicity, and is committed to setting an appropriate tone from
the top in all diversity and inclusion matters.
Looking to the future
The Group has delivered another robust performance despite
the ongoing economic challenges. The Board is confident
that the ongoing implementation of our strategic initiatives
will continue to drive the development of the business in line
with its expectations in the year ahead.
STEVE GOOD
Chair
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 17
OVERVIEW
Business Model
20
Our Marketplace
22
Our Strategy
26
Chief Executive Officer’s Review
30
Key Performance Indicators
34
Business Review UK & Ireland
36
Business Review South Africa
38
Chief Financial Officer’s Financial Review
40
Chief People Officer’s Review
44
Our Approach to Sustainability
48
Our Sustainability Strategy
50
– People
56
– Product
67
– Planet
74
TCFD
90
Principal Risks and Uncertainties
106
Stakeholder Engagement
118
Non-financial and Sustainability
Information Statement
124
STRATEGIC
REPORT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202418
STRATEGIC REPORT
STRATEGIC REPORT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 19
In-house product
design teams
Each of our brands specialises in niche, mid-
premium, bathroom and kitchen products.
Tacit category expertise, consumer insight
and market knowledge drive product design
and development. Group knowledge sharing
enhances new product development, which
boasts a robust pipeline and impressive
annual vitality rates.
Technology and I.P.
Through the process of new product
development, the brands within the Group
develop technologies and intellectual
property that drives competitive advantage.
Brands within the Norcros Group can benefit
from these inventions within their own
product design and product innovations.
Sustainable products
Global megatrends, including climate change,
energy transition and ageing populations, are
creating an increasing focus on sustainability.
In the future, there will be an increasing
demand for bathroom and kitchen products
that are less carbon-intensive, make more
economical use of water and energy and
cater for the needs of ageing consumers. Our
focus on reducing energy consumption, social
benefits and a circular economy drives our
competitive advantage through sustainable
products and ESG focus.
M&A
Our dedicated in-house corporate
development team develops our M&A
pipeline and leads transactions and
integration. We target successful, capital-light
businesses with strong management teams
and growth plans that align with our strategy
and culture. We deliver dedicated integration
plans that realise growth synergies and drive
benefits of Group scale.
Growth accelerators
We enable our brands to accelerate growth
through a range of cross-Group resources,
processes and programs. These include key
account management, cross-selling programs,
new product development coordination and
a Marketing Forum. Each are focused on
collaborating across our Group to increase
sales and brand awareness.
Operating platform
We enable our brands to be more efficient and
effective by collaborating across our Group on
sourcing, warehousing and logistics, and technology
and data. Our model is based on a culture of
continuous improvement, collaboration and
innovation. As we increase the level of collaboration,
we are able to realise the benefits of scale.
ESG policy and process
Our business model is underpinned by an
ESG framework that focuses on our people,
sustainable products and our impact on the
environment and communities. We have a
consistent set of policies, processes and systems
that underpin this framework that we apply
across the Group.
Inputs and
key resources
Design
01
ESG drives competitive advantage
Our people and culture
READ MORE ON
PAGES 56 TO 66
Portfolio of
market-leading brands
READ MORE ON
PAGES 6 TO 9
Positioned in attractive,
complementary
geographies
READ MORE ON
PAGES 22 TO 25
Positioned towards
resilient RMI and
mid-premium segments
READ MORE ON
PAGES 22 TO 25
Strong customer
relationships
READ MORE ON
PAGES 10 AND 11
Deep supply chain
partnerships
READ MORE ON
PAGES 72 AND 73
Financial strength
READ MORE ON
PAGES 12 TO 15
Our individual brands are experts in in-house design, managed sourcing and customer service. They are positioned in the
mid-premium segment of the market and are differentiated from the competition by great design and outstanding customer
service. Our brands benefit from being part of the Norcros Group through our financial support, organic growth accelerators
and scale-based operational efficiencies.
BRAND BUSINESS MODEL
BRANDS
GROUP
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202420
STRATEGIC REPORT
BUSINESS MODEL
M&A
Our dedicated in-house corporate
development team develops our M&A
pipeline and leads transactions and
integration. We target successful, capital-light
businesses with strong management teams
and growth plans that align with our strategy
and culture. We deliver dedicated integration
plans that realise growth synergies and drive
benefits of Group scale.
Growth accelerators
We enable our brands to accelerate growth
through a range of cross-Group resources,
processes and programs. These include key
account management, cross-selling programs,
new product development coordination and
a Marketing Forum. Each are focused on
collaborating across our Group to increase
sales and brand awareness.
Operating platform
We enable our brands to be more efficient and
effective by collaborating across our Group on
sourcing, warehousing and logistics, and technology
and data. Our model is based on a culture of
continuous improvement, collaboration and
innovation. As we increase the level of collaboration,
we are able to realise the benefits of scale.
ESG policy and process
Our business model is underpinned by an
ESG framework that focuses on our people,
sustainable products and our impact on the
environment and communities. We have a
consistent set of policies, processes and systems
that underpin this framework that we apply
across the Group.
Deep sourcing
We leverage deep sourcing to thoroughly
understand our suppliers’ operations and
networks. By engaging with suppliers and sub-
suppliers, we ensure a resilient, transparent and
strategically-aligned supply chain, proactively
manage risks, maintain high-quality standards
and foster strong supplier relationships, which
enhances performance and competitiveness.
Quality and reliability
Our commitment to quality and reliability is
unwavering. Our products undergo rigorous
testing to meet stringent quality and safety
standards. We’re proud of our record, with
less than 0.5% of customer products being
recalled for quality issues and 0.001% for safety
concerns. Our reputation as a reliable supplier is
built on this dedication.
Assurance
We excel in product assurance through
meticulous planning, aligning quality
standards with customer needs and
regulatory requirements. In partnership with
our manufacturers, we ensure consistent
quality through robust process controls
and inspections. Our culture of continuous
improvement ensures customers receive reliable,
high-quality products they can trust..
Employees
Opportunity to develop skills
and careers in an inclusive,
collaborative and innovative
environment
Customers
Exceptional customer service
and long-term relationships
End consumers
On-trend, design-led sustainable
products that make great
bathroom and kitchen spaces
Society
Supporting communities as an
employer and through local
development projects
Environment
Providing innovative sustainable
products with reducing carbon,
energy and water usage
Supply chain
Long-term trusted partnerships
with multiple strong routes
to market
Shareholders
High quality of earnings with
progressive returns
Value we create
for stakeholders
Source Service
02
03
READ MORE ON PAGES 48 TO 89
We acquire and grow capital-light, sustainable and design-led bathroom and kitchen products brands with strong,
complementary and resilient market positions. Our decentralised model ensures that decision making is close to our
customers and supply chain. We are focused on generating cash and reinvesting in our growth as well as growing
shareholder returns.
GROUP BUSINESS MODEL
People Product Planet
Routes to market
We primarily go to market through B2B
channels. These include trade (merchants),
specification (residential and commercial), retail
and online, where we have many long-term
customer relationships. In South Africa, we have
a vertically-integrated model where, in addition
to B2B channels, we have a retail division direct
to consumers. We also export products from the
UK and Ireland and South Africa, typically using
local distributors or retailers.
Technical support
Providing exceptional technical support to
partners is a priority. We offer dedicated teams
for swift, accurate issue resolution, technical
drawings, product specifications, and installation
instructions. Support is available through a
variety of channels. Proactive follow-ups ensure
satisfaction, and our feedback mechanism
enhances support quality. Our tailored,
responsive approach strengthens partnerships.
Excellent customer service
We are differentiated by our ability to provide
timely, accurate and quality delivery of our
products. This is enabled by our investment
in stock, warehousing and logistics, customer
communications and dedicated after-sales
support.
STRATEGIC REPORT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 21
SIGNIFICANT
OPPORTUNITY
FOR ORGANIC
AND M&A
GROWTH
IN LARGE,
FRAGMENTED
MARKETS
Total addressable market
Extended addressable market
UK & Ireland bathroom and
kitchen products:
• c. £1.7bn
1
• Showers, enclosures and trays, brassware,
accessories, wall coverings, kitchen sinks
South Africa:
• c. £1.6bn
2
• Coverings, adhesives, bathroom
and plumbing
= Core Addressable Market + c. £2.1bn
1
Total Addressable Market + >£5bn
3
Additional complementary UK bathroom and
kitchen product categories: bathroom furniture,
sanitaryware, lighting, ventilation, decorative
radiators, underfloor heating, plumbing products
New regions including Gulf region, Nordics, mainland Europe
Core
addressable market
c. £3.3bn
1,2
= c. £5bn - £6bn
= >£10bn
We operate in the bathroom and kitchen products
markets in the UK & Ireland and South Africa.
We consider our market in three groups:
Market in numbers
The diagram shows how our total market is broken down.
Core Addressable Market
This covers the core product categories that we serve today in the
UK & Ireland and South Africa.
Total Addressable Market
This covers a range of complementary bathroom product categories
that we are not materially serving today, but where we have the routes
to market to be successful.
Extended Addressable Market
This covers a range of geographies where we are not currently based,
but where we have some experience of operating in. It also includes a
wider range of adjacent product categories.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202422
STRATEGIC REPORT
OUR MARKETPLACE
Total addressable market
Extended addressable market
UK & Ireland bathroom and
kitchen products:
• c. £1.7bn
1
• Showers, enclosures and trays, brassware,
accessories, wall coverings, kitchen sinks
South Africa:
• c. £1.6bn
2
• Coverings, adhesives, bathroom
and plumbing
= Core Addressable Market + c. £2.1bn
1
Total Addressable Market + >£5bn
3
Additional complementary UK bathroom and
kitchen product categories: bathroom furniture,
sanitaryware, lighting, ventilation, decorative
radiators, underfloor heating, plumbing products
New regions including Gulf region, Nordics, mainland Europe
Core
addressable market
c. £3.3bn
1,2
= c. £5bn - £6bn
= >£10bn
1
Source: BRG: Norcros estimates based on BRG,
proprietary information and management estimates
2
Source: Norcros estimates based on proprietary
information and management estimates
3
Source: BRG country reports in western Europe
and Nordics (reports range from 2019–2020) and
Norcros management estimates for Gulf Region
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 23
STRATEGIC REPORT
23
Market drivers
UK and Ireland
End markets
Demand for bathroom and kitchen products is split between
repair, maintenance and investment (RMI), residential
new build and commercial (for example, hotels and
commercial buildings).
RMI is the main driver of the bathroom market, accounting
for approximately 80%
1
of demand. Small renovation projects
and replacement purchases are the typical consumer reasons
for RMI demand. This area of the market also includes larger
renovation projects. Given that most of RMI spend is driven
by need, it is somewhat resilient to economic conditions.
New build accounts for approximately 13%
1
of the market.
Demand is driven by the need to fit out bathrooms in new
houses. The bathroom products market (both new build and
RMI) benefits from the trend of having more bathrooms in
the home. New build demand is more cyclical and depends
on the housing market. Recent inflationary pressures and
higher interest rates have seen challenges in this part of
the economy. However, with a growing population, ageing
housing stock and an undersupply of housing, we expect to
see the housing market improve over the medium term. This
market is important and attractive for Norcros as it often
includes larger-scale projects with multiple units.
Commercial new build and RMI accounts for approximately
7%
1
of the market. This is an attractive market to be in
because it involves larger-scale projects (both RMI and new
build). However, it is also typically cyclical in line with the
regional economy.
Norcros’ revenue mirrors the RMI / new build / commercial
split, with approximately 78% of Group UK revenue focused
towards the RMI market.
RMI/New Build/Commercial Share
1
1
Source: BRG: The European Bathroom & Kitchen Product Markets UK 2023
2
Source: BRG: The European Bathroom & Kitchen Product Markets UK 2024
80%
RMI
13%
Residential
New Build
7%
Commercial
RMI + New Build
Norcros positioning in the UK & Ireland
• Largest bathroom products group in the UK
and Ireland
• Market-leading positions in most bathroom products
categories (but very limited presence in the large
furniture and sanitaryware categories)
• Orientated towards higher margin, more resilient
mid-premium segment
• Indexed in line with end-market split (RMI circa 80%
of market and circa 80% of Norcros revenue)
• Large target market (circa £1.7bn in current
categories with a further circa £2bn in
complementary adjacent categories, including
furniture and sanitaryware)
• Housing stock: growing population, ageing housing
infrastructure, shortage of housing
• ESG and ageing population trends resulting in growth
market for sustainable and adaptive products
• Fragmented by product and channel
• Further opportunity to grow share in
fragmented markets
Quality/price point
The market is typically viewed in three segments: premium,
middle and economy.
The mid-premium segments account for approximately 71%
1
of
the market. These segments are typically more resilient to cost
of living pressures as consumers are less price sensitive. They
also offer higher margins for high-quality, sustainable and
in-fashion products.
Norcros is mainly focused on the mid-premium segment.
Market dynamics
The market has contracted in 2024, primarily driven by the
downturn in residential new build construction, exacerbated
by the negative impact on residential RMI due to cost of
living pressures.
Recent housebuilder announcements indicate that there is
an emerging recovery in the housebuilding market and RMI
should benefit from improving consumer sentiment as the
economy recovers.
The medium-term outlook remains positive, given the
shortage of houses and consumer demand for quality and
environmentally-friendly products.
The BRG report (released May 2024) indicates that our
Total Addressable Market declined by circa 8%
1,2
between
2023 and 2024.
The bathroom products market remains highly fragmented.
Norcros is the largest UK and Ireland group, but there is no
single dominant player across all categories.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202424
STRATEGIC REPORT
OUR MARKETPLACE
CONTINUED
South Africa
The market in South Africa is large with a total size of circa
£1.6bn and covers the coverings, adhesives and bathroom
and plumbing segments.
As in the UK, the market is driven by RMI, residential new
build and commercial. In South Africa, there is a shortage of
housing and, whilst construction levels remain lower than
their 2007 peak, we expect to see increases in demand in
residential and commercial new build.
The South African economy has been subject to challenges
in cost of living pressures and energy infrastructure in recent
years and this has continued to impact demand.
The market is more concentrated than the UK with a smaller
number of larger players. In the bathroom and plumbing
segment, the market is regional and more fragmented with
few national players.
Norcros South Africa is one of the market leaders with
a vertically integrated business model covering design,
manufacturing, sourcing and retail. Both Norcros and the
other market leader deploy similar integrated business models
from production to retail to reach all segments and channels.
Norcros positioning in South Africa
• One of two national market leaders in tiles,
adhesives and bathroom products
• Integrated model with design, manufacture,
sourcing and retail
• Also go to market through trade routes
• Shortage of housing
• Favourable long-term socio-economic demographics
• Large target market (circa £1.6bn)
• Regional fragmentation in bathroom and
plumbing segment
• Further opportunity to take market share
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 25
STRATEGIC REPORT
Our ability to bring together the
specialist knowledge of all our people
from every part of the bathroom and
kitchen sector makes us stand out
from the crowd.”
THOMAS WILLCOCKS
Chief Executive Officer
Over the last decade, our organic and M&A consolidation strategy has
resulted in Norcros becoming the UK & Ireland’s number one bathroom
products group. As we move into the next strategic cycle, we have updated
our strategy and set ambitious new medium-term targets. Our strategic plan
builds on our core strengths and will accelerate our growth.
We are already a
successful and
scalable platform.
Over the last decade, through a mix of
organic growth and successful M&A,
we have developed a portfolio of
leading brands in the bathroom and
kitchen products market. Our brands
are differentiated by product design
and quality and outstanding customer
service. We have carefully positioned
the Group to be diversified across
regions, categories and channels and
orientated towards the more resilient
mid-premium segment to manage our
exposure to economic headwinds. As
a result, we have consistently delivered
growth, excellent cash performance
and shareholder returns and we are
well positioned to invest in the future.
We have a significant
opportunity to develop
and grow.
We continue to operate in large and
fragmented markets that provide
opportunities for growing our market
share and further consolidation
through M&A. We are well positioned
in emerging and high-growth markets
such as sustainable products. Whilst
we are performing well today, there
are opportunities to modernise our
operations and take advantage of our
Group scale to drive efficiency and
customer service.
We are implementing a
clear strategy to build
on our current platform
and address these
opportunities.
The strategy is focused around
four pillars: M&A, organic growth,
operational excellence and ESG. We are
taking action in each of these areas to
evolve and accelerate the growth of
our Group. As a result, we will: become
renowned for design and sustainability;
deliver leading, digitally-enabled
customer service; continue to develop
an inclusive and growth-focused
culture; and increase our scale with
market-leading returns.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202426
STRATEGIC REPORT
OUR STRATEGY
CRAFTING DESIGN-LED SUSTAINABLE
BATHROOM AND KITCHEN PRODUCTS
STRATEGIC OBJECTIVES
STRATEGIC INITIATIVES
ESG – DRIVING OUR COMPETITIVE ADVANTAGE
Renowned for
design and
sustainability
M&A
Organic
growth
People – Product – Planet
Operational
excellence
Leading,
digitally-enabled
service
Inclusive and
growth-focused
culture
Scale with
market-leading
returns
We have introduced new
medium-term targets for the Group:
• Organic growth at 2%–3% ahead of the market
• Operating margin to 15% over the medium term
• Cash conversion greater than 90%
• Return on capital employed greater than 20%
• Science-based carbon emissions targets to be delivered
by 2028 on a base year of 2023
In addition to this, selective acquisitions will accelerate
our growth and enhance our operating margin as we
have recently seen with our acquisitions of Merlyn and
Grant Westfield.
We are more than the sum of our
parts, and this will increasingly
differentiate us.
As a Group, we will increasingly add value by driving the
benefits of our scale, developing growth accelerators and
embedding our performance-enhancing operating platform.
Collaboration across our operating brands is critical to achieve
this. Our ability to bring together the specialist knowledge of
all our people from every part of the kitchen and bathroom
sector makes us stand out from the crowd.
We are already making significant progress against our
strategy and we have highlighted examples of this throughout
this report.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 27
STRATEGIC REPORT
M&A Organic growth Operational excellence ESG
Accelerate growth through
selective acquisitions
Grow ahead of the market by
establishing growth accelerators and
energising our entrepreneurial culture
Drive operating margin, customer
service and organic growth by
maximising the benefits of our scale
and modernising our operating platform
Investing in our people,
products and planet to drive
our competitive advantage
Progress in 2024
• Integration of Grant Westfield
• Completed disposal of Norcros Adhesives
• Sale of Johnson Tiles UK completed in May 2024
• Well-developed strategically aligned M&A pipeline
Progress in 2024
• Cross-selling achieving market share gains, including
Grant Westfield introduction to new customers
• Well-developed new product development pipeline; key
releases in 2024 in Grant Westfield, Triton and VADO
• Specification Forum driving market share gains
• Marketing Forum established
Progress in 2024
• Brands driving cost and service synergies
• Cross-Group freight consolidation
• VADO warehouse consolidation
• Digital transformation in Croydex
Progress in 2024
• Carbon emissions targets set across all scopes and
validated by SBTi
• First disclosure to Climate Disclosure Project
• Drive talent and diversity, equity and
inclusion programs
• Industry awards for product design and sustainability
Priorities for the medium term
• Continue to develop and manage pipeline in target
themes:
– Filling the gaps in the UK and Ireland
– New capabilities (sustainable products and digital)
– New markets (geography and adjacent
product categories)
• Deliver synergies from recently acquired businesses
• Smooth carve-out plan from Johnson Tiles UK sale
Priorities for the medium term
• Cross-selling program with top customers
• New product development program and
Group coordination
• Driving growth in specification channel with particular
focus on sustainable products
• Marketing centre of excellence and cross-Group Forum
Priorities for the medium term
• Realise further benefits from freight plan and VADO
warehouse consolidation
• Further supply chain collaboration and efficiencies
• Further opportunities for consolidated logistics
and warehousing
• Enhance data capabilities to improve operational
effectiveness and customer service
Priorities for the medium term
• Deliver Net Zero Transition Plan
• Agree and publish Sustainable
Products Framework
• Drive investment in sustainable products
• Roll out and embed Supply Chain Policy
READ MORE IN THE CASE STUDY ON PAGE 7 READ MORE IN THE CASE STUDY ON PAGE 39 READ MORE IN THE CASE STUDY ON PAGE 37 READ MORE IN THE CASE STUDIES ON PAGES 48 TO 89
Link to KPIs
1
2
3
4
5
6
Link to KPIs
1
2
3
4
5
6
Link to KPIs
1
2
3
4
5
6
Link to KPIs
1
2
3
4
5
6
Link to Risks
1
3
4
6
9
10
11
Link to Risks
2
3
4
5
6
7
8
9
10
11
Link to Risks
3
4
5
6
7
8
9
10
11
Link to Risks
2
3
4
6
8
Organic growth Operating margin Cash conversion ROCE
Science-based carbon
emission targets
2–3% per annum
above market
15% Over medium term >90% >20% 2028
Medium-term targets
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202428
STRATEGIC REPORT
OUR STRATEGY
PROGRESS ON OUR STRATEGY
M&A Organic growth Operational excellence ESG
Accelerate growth through
selective acquisitions
Grow ahead of the market by
establishing growth accelerators and
energising our entrepreneurial culture
Drive operating margin, customer
service and organic growth by
maximising the benefits of our scale
and modernising our operating platform
Investing in our people,
products and planet to drive
our competitive advantage
Progress in 2024
• Integration of Grant Westfield
• Completed disposal of Norcros Adhesives
• Sale of Johnson Tiles UK completed in May 2024
• Well-developed strategically aligned M&A pipeline
Progress in 2024
• Cross-selling achieving market share gains, including
Grant Westfield introduction to new customers
• Well-developed new product development pipeline; key
releases in 2024 in Grant Westfield, Triton and VADO
• Specification Forum driving market share gains
• Marketing Forum established
Progress in 2024
• Brands driving cost and service synergies
• Cross-Group freight consolidation
• VADO warehouse consolidation
• Digital transformation in Croydex
Progress in 2024
• Carbon emissions targets set across all scopes and
validated by SBTi
• First disclosure to Climate Disclosure Project
• Drive talent and diversity, equity and
inclusion programs
• Industry awards for product design and sustainability
Priorities for the medium term
• Continue to develop and manage pipeline in target
themes:
– Filling the gaps in the UK and Ireland
– New capabilities (sustainable products and digital)
– New markets (geography and adjacent
product categories)
• Deliver synergies from recently acquired businesses
• Smooth carve-out plan from Johnson Tiles UK sale
Priorities for the medium term
• Cross-selling program with top customers
• New product development program and
Group coordination
• Driving growth in specification channel with particular
focus on sustainable products
• Marketing centre of excellence and cross-Group Forum
Priorities for the medium term
• Realise further benefits from freight plan and VADO
warehouse consolidation
• Further supply chain collaboration and efficiencies
• Further opportunities for consolidated logistics
and warehousing
• Enhance data capabilities to improve operational
effectiveness and customer service
Priorities for the medium term
• Deliver Net Zero Transition Plan
• Agree and publish Sustainable
Products Framework
• Drive investment in sustainable products
• Roll out and embed Supply Chain Policy
READ MORE IN THE CASE STUDY ON PAGE 7 READ MORE IN THE CASE STUDY ON PAGE 39 READ MORE IN THE CASE STUDY ON PAGE 37 READ MORE IN THE CASE STUDIES ON PAGES 48 TO 89
Link to KPIs
1
2
3
4
5
6
Link to KPIs
1
2
3
4
5
6
Link to KPIs
1
2
3
4
5
6
Link to KPIs
1
2
3
4
5
6
Link to Risks
1
3
4
6
9
10
11
Link to Risks
2
3
4
5
6
7
8
9
10
11
Link to Risks
3
4
5
6
7
8
9
10
11
Link to Risks
2
3
4
6
8
Link to KPIs
1
Total revenue
2
Underlying
operating profit
3
Underlying return on
capital employed
4
Dividend
per share
5
Underlying operating
cash flow
6
Return on sales
Link to Risks
1
Acquisitions
2
Stakeholder
requirements
and reporting
requirements
3
Staff retention
and recruitment
4
Market
conditions
5
Loss of key
customers
6
Competition
7
Reliance on
production
facilities
8
Loss of key
supplier
9
Exchange
rate risk
10
Funding and
liquidity risk
11
Pension
scheme risk
12
Cyber
security
Organic growth Operating margin Cash conversion ROCE
Science-based carbon
emission targets
2–3% per annum
above market
15% Over medium term >90% >20% 2028
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 29
STRATEGIC REPORT
Norcros is about delivering
design-led, sustainable bathroom
and kitchen spaces that excite and
enrich the lives of the people we live
and work with, and the places we
live and work in, in an intentionally
responsible manner.”
THOMAS WILLCOCKS
Chief Executive Officer
On behalf of the Norcros team, I am pleased to share my
review for my first full year as Chief Executive Officer of
Norcros plc. Thanks to the passion of our team and partners,
we have collectively delivered another robust set of results for
the year.
As we have grown our market share, we have focused on
the quality of our businesses and earnings, growing faster
and more efficiently together. Importantly, our path forward is
consciously focused on operating in a way that contributes
positively to the communities that we live and work in.
Building off a strong foundation
Over the last ten years, we have developed and delivered on
our goal to consolidate the fragmented bathroom and kitchen
product markets we operate in, reaching a point where we
are the number one UK and Ireland bathroom and kitchen
products business and the second largest in South Africa.
Our strategy has been evenly balanced between organic
and acquisitive growth, with the Group developing key
competencies in both areas.
I am delighted with the performance over this period and
excited by the significant opportunities that remain in the
more resilient mid-premium market segments that we hold
leading positions in. Our strategy is building from a position of
strength and scale as we actively leverage the customer and
operational synergies within the Group.
The growth and development of the business comes, and
will continue to come from, four key and already ‘in play’
strategic initiatives:
• Portfolio development (including M&A)
• Organic growth (in-house design, collaboration,
and service)
• Operational excellence (efficiencies and service)
• ESG (a powerful choice for better living)
Portfolio development
The first important step was to review our portfolio,
recognising that our increasing focus on building a capital-
light and higher operating margin structure meant that we
had businesses that would not form part of the Group’s
future. Over the last 18 months, we have carefully completed
the closure of Norcros Adhesives and sold Johnson Tiles UK
to the existing management team, with this sale completing
in May 2024. I am really pleased that we were able to put a
deal together that has seen the 123-year-old Johnson Tiles UK
business continue its journey under new ownership.
When considering potential acquisitions, we have a strong
pipeline of opportunities to which we will continue to apply
our clear and rigorous decision-making framework as we
develop our capital-light and high operating margin business.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202430
STRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S REVIEW
Organic growth
Norcros drives ahead-of-market organic share growth by
leveraging two principal accelerators. The first is our agile
in-house design capabilities that ensure we have a reliable
stream of high-quality and on-trend new products coming into
the market on a regular basis. These products are increasingly
leveraging the clear opportunities in sustainable living to take
market share. Our second driver comes from our scale and
especially the ability to cross sell, through brand collaboration,
as demonstrated by the introduction of Grant Westfield
to Wickes, Topps Tiles and Screwfix, post-acquisition. Both
accelerators incorporate significant opportunities that we are
actively pursuing and converting.
Operational excellence
Our scale allows us to access operational synergies not
available to many of our smaller competitors. Early but strong
progress is being made in the Group, helping to ensure
improved service levels to our customers that are delivered
more efficiently. This is a key focus area for Norcros with
investment in systems, and warehousing and distribution
efficiency projects that are now underway at VADO and
Grant Westfield; both are progressing to plan.
ESG — investing in our people,
products and planet to drive our
competitive advantage
Our sustainability program is broadly grouped into three
interrelated areas, namely our people, our products and the
world that we live and work in.
Our ESG credentials are a maturing and sustainable
competitive differentiator. We have made excellent progress
over the last two years. In a structured and measured manner,
we are increasingly able to give our customers a powerful,
sustainable choice for better living. Increased investment in
our people and product development is driving clear market
share gains, as demonstrated by our Triton brand in particular.
Further detail of what we are doing in this area and how we
are measuring this is explained in detail in the ESG section on
pages 48 to 89.
We are also pleased to report that our emission targets have
been validated and approved by the Science Based Targets
initiative (SBTi) in the period. Norcros is committed to reach
net zero greenhouse gas emissions across our value chain
by 2040 and we are making good progress to delivering our
2028 near-term targets.
As a team, we are fortunate to be able to build on what
makes us great today and leverage our strong, scale-based
growth accelerators to unlock further value.
A unique market leader
Norcros is the UK and Ireland’s number one bathroom
products group, with clear differentiators from our smaller
bathroom product peers. We have market-leading bathroom
and kitchen products, positioned in the more resilient mid-
premium segment of the market, with a design-led business
that delivers exceptional service across a blue chip customer
base. Our capital-light and cash-generative business model
provides a quality of earnings and enhanced margin profile.
Our focused but decentralised business model is a key
enabler; we have the best talent in the market operating
where it counts – in the field. These exceptional teams
focus on what sets their brands apart, namely in-house
product design, deep sourcing relationships and excellent
customer service. Our ability to do this day in and day out
is demonstrated by our exceptional product vitality levels,
and our ability to not only retain, but consistently grow, our
customer base and market share.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 31
STRATEGIC REPORT
Recognising the central part that our people play in the
Group’s success, we have placed increased emphasis on
investing in our talent this year. This investment has taken
place at all levels and is a key driver in the development of
our market-leading teams. We are committed to being the
employer of choice in our markets and work hard to ensure
that our Group attracts and retains talented, diverse and
inclusive teams.
We have, over the last year, strengthened our award-
winning teams through further investment and increased
collaboration, and also brought in new talent as needed. I am
confident that we are successfully developing the talent and
leadership required to grow our business ahead of the market
in the coming years.
Norcros is different, and we are able to do what we do
because of our dedication to the design and service of
branded products with a team of remarkably skilled and
committed people across our business. This anchors and
drives our business model; we never take this for granted.
Looking forward to the year ahead
The year ahead of us will be a year of further development
and focused implementation of our strategic objectives. A
significant level of this development will come from increased
collaboration. Each of our brands is formidable in its own
right, but together they have proved that we are more than
the sum of our parts.
Underlying what we do is a deep understanding of our
customers and end users. Consumer insights help us
understand not only what our customers want now, but also
what they will need in the future. Our design and product
teams will continue to develop on-trend, high-quality and
sustainable products that our customers and end users
love to use and feel confident choosing. We all have a
sustainable choice, and we believe that doing the right
thing is not only right but will drive our business growth and
profitability ahead of our competitors in the years ahead.
To support the wider customer experience, we will focus
on making it easier for our suppliers, staff and customers
to engage in a straightforward and seamless manner, right
through the product journey, through increased investment
in our processes and operations. This is a journey that
has started with promising and meaningful progress in
the period.
The encouraging part of the year ahead is that all four key
growth initiatives are already up and running. There are no
standing starts. Given the progress we have already made, we
are confident that we will make real advancement towards
our ambitious new medium-term targets in the year ahead as
outlined on page 27.
Recent trading
Group revenue in the two months to the end of May 2024 was
encouragingly 2.2% ahead on a constant currency like for like
basis, adjusting for Johnson Tiles UK and Norcros Adhesives
(UK and Ireland +2.0%, SA +2.5%). Group revenue was 2.9%
below the prior year comparator on a reported basis. Although
market conditions are likely to remain uncertain, the Group
continues to make further strategic progress and the Board’s
expectations for FY25 remain unchanged.
To sum it all up
The Norcros business is not only about exceptional products
and experiences but also about people, the places we live
and work, and the way we interact and engage with our
communities and the environment. Putting these together
means that sustainability at the core of our business is not
just a tagline; it is fundamental to the way we operate. It is the
right thing to do, and we believe that it will help deliver the best
possible return to our shareholders.
We are committed to providing a powerful choice for better
living, and I am excited and confident about the journey ahead.
THOMAS WILLCOCKS
Chief Executive Officer
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202432
STRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S REVIEW
CONTINUED
Q & A
with Chief Executive Officer
Thomas Willcocks
Q
What were your observations
from your first year as
Chief Executive Officer?
A
I have been with the business since 2006 and have
watched the business and our teams develop into
the market-leading business that Norcros is today.
In transitioning into the CEO role, I had the benefit
of having managed both core regions and inheriting
excellent teams that I knew well.
Norcros is a differentiated business and we are
building on a strong foundation of design-led, market-
leading brands that have been positioned in the more
resilient mid-premium market segments. This makes
us less cyclical, with this resilience in our performance
showing through strongly over what have been a
turbulent last three or four years.
Our decentralised but collaborative business model
ensures not only that we have the best people where
it counts, but also that we are able to leverage our
scale, which we are doing. This is underpinned by a
low ego, supportive but driven culture in which each
of our teams will go above and beyond, including for
their sister companies to the benefit of each other
and the Group as a whole. There is no monetary
compensation for this — it is just built into our DNA.
Stepping up to lead a business and team like this is
not something that I will ever take for granted.
Q
Where do you think the biggest
opportunities lie?
A
The markets that we operate in are large and
fragmented. Our consolidation growth strategy, evenly
balanced between organic growth and acquisitions,
works well. We have proven track records in both
areas and, as we have started to reach the scale that
we now enjoy, we are able to leverage this scale both
on the demand and cost side to accelerate our growth
in large and fragmented markets, faster and more
profitably. Leveraging our scale in this collaborative
manner is where the single biggest opportunity lies.
As we do this, we are increasingly leading the way in
sustainability and I believe that sets us further apart
from our competitors.
Q
What makes Norcros stand out from
the crowd?
A
Our business model, the quality and commitment of
our teams, and our collaborative culture sets us apart.
Norcros is not easy to replicate and we are really
excited about our ability to grow ahead of the market
in a way that not only rewards our stakeholders, but
does it in a way that make a positive difference.
Q
What does “powerful choice for
better living” mean to you?
A
It means giving our customers a clear choice around
sustainability when selecting products for their
bathrooms or kitchens. Making a clear and powerful
choice requires easy-to-understand ratings and
options. We are not only offering sustainable products
and experiences, we are also developing clearer
information to help customers make the powerful
choice for better living.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 33
STRATEGIC REPORT
Financial KPIs
1
TOTAL REVENUE (£M)
£392.1M
2
UNDERLYING OPERATING
PROFIT (£M)
£43.2M
3
UNDERLYING RETURN ON
CAPITAL EMPLOYED (%)
16.4%
392.1
441.0
396.3
324.2
342.0
2024
2023
2022
2021
2020
43.2
47.3
41.8
33.8
32.3
2024
2023
2022
2021
2020
Underlying return
on capital employed
16.4
18.5
23.9
18.2
16.4
2024
2023
2022
2021
2020
Link to strategy
Definition
Reported Group revenue for the year
Performance
Total revenue for the year decreased by 11.1%
on a reported basis and by 6.0% on a constant
currency like for like basis.
Link to strategy
Definition
Reported operating profit as adjusted for IAS 19R
administrative expenses, acquisition related costs
and exceptional operating items, as defined in
note 8 to the financial statements
Performance
Underlying operating profit decreased by £4.1m
(8.7%). This reflected a robust performance in the UK
and Ireland, offset by challenging market conditions in
South Africa.
Link to strategy
Definition
Underlying operating profit on a pre-IFRS 16
basis expressed as a percentage of the average
of opening and closing underlying capital
employed (as defined in note 8 to the financial
statements)
Performance
Underlying ROCE remained above the strategic
target of 15% over the economic cycle.
4
DIVIDEND PER SHARE (P)
10.2P
5
UNDERLYING OPERATING
CASH FLOW (£M)
£56.4M
6
RETURN ON SALES (%)
11.0%
10.2
10.2
10.0
8.2
3.1
2024
2023
2022
2021
2020
56.4
44.8
28.6
65.8
38.4
2024
2023
2022
2021
2020
11.0
10.7
10.5
10.4
9.4
2024
2023
2022
2021
2020
Link to strategy
Definition
Total of the interim dividend and the proposed
final dividend for the financial year
Performance
In line with the Board’s progressive, albeit
prudent, dividend policy, although earnings
reduced in the year, the dividend per share
has been maintained at 10.2p per share.
Link to strategy
Definition
Cash generated from continuing operations adjusted
for cash flows from exceptional items and pension
fund deficit recovery contributions, as defined in
note 8 to the financial statements
Performance
Underlying operating cash generation increased to
£56.4m reflecting a strong trading performance and
a reduced investment into working capital.
Link to strategy
Definition
Underlying operating profit as a percentage
of revenue
Performance
Return on sales increased by 300bps to 11.0%.
READ ABOUT OUR ESG KPIS
ON PAGES 52 TO 55
We use the following key performance indicators (KPIs) to measure our progress against our strategic
priorities and enable investors and other stakeholders to measure our progress.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202434
STRATEGIC REPORT
KEY PERFORMANCE INDICATORS
Financial KPIs
1
TOTAL REVENUE (£M)
£392.1M
2
UNDERLYING OPERATING
PROFIT (£M)
£43.2M
3
UNDERLYING RETURN ON
CAPITAL EMPLOYED (%)
16.4%
392.1
441.0
396.3
324.2
342.0
2024
2023
2022
2021
2020
43.2
47.3
41.8
33.8
32.3
2024
2023
2022
2021
2020
Underlying return
on capital employed
16.4
18.5
23.9
18.2
16.4
2024
2023
2022
2021
2020
Link to strategy
Definition
Reported Group revenue for the year
Performance
Total revenue for the year decreased by 11.1%
on a reported basis and by 6.0% on a constant
currency like for like basis.
Link to strategy
Definition
Reported operating profit as adjusted for IAS 19R
administrative expenses, acquisition related costs
and exceptional operating items, as defined in
note 8 to the financial statements
Performance
Underlying operating profit decreased by £4.1m
(8.7%). This reflected a robust performance in the UK
and Ireland, offset by challenging market conditions in
South Africa.
Link to strategy
Definition
Underlying operating profit on a pre-IFRS 16
basis expressed as a percentage of the average
of opening and closing underlying capital
employed (as defined in note 8 to the financial
statements)
Performance
Underlying ROCE remained above the strategic
target of 15% over the economic cycle.
4
DIVIDEND PER SHARE (P)
10.2P
5
UNDERLYING OPERATING
CASH FLOW (£M)
£56.4M
6
RETURN ON SALES (%)
11.0%
10.2
10.2
10.0
8.2
3.1
2024
2023
2022
2021
2020
56.4
44.8
28.6
65.8
38.4
2024
2023
2022
2021
2020
11.0
10.7
10.5
10.4
9.4
2024
2023
2022
2021
2020
Link to strategy
Definition
Total of the interim dividend and the proposed
final dividend for the financial year
Performance
In line with the Board’s progressive, albeit
prudent, dividend policy, although earnings
reduced in the year, the dividend per share
has been maintained at 10.2p per share.
Link to strategy
Definition
Cash generated from continuing operations adjusted
for cash flows from exceptional items and pension
fund deficit recovery contributions, as defined in
note 8 to the financial statements
Performance
Underlying operating cash generation increased to
£56.4m reflecting a strong trading performance and
a reduced investment into working capital.
Link to strategy
Definition
Underlying operating profit as a percentage
of revenue
Performance
Return on sales increased by 300bps to 11.0%.
Link to strategy
M&A
Organic
growth
Operational
excellence
ESG
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 35
STRATEGIC REPORT
RECORD
OPERATING
PROFIT
Our UK business delivered a
record performance driven by new
product launches, collaboration and
outstanding customer service. We
are the UK & Ireland’s number one
bathroom products group.
Our UK and Ireland business achieved revenue of £281.9m
(2023: £295.8m), representing a decrease of 4.7% on a
reported basis, but delivered a record level of underlying
operating profit in the year. On a like for like basis, adjusting
for Grant Westfield (acquired 31 May 2022) and Norcros
Adhesives (closed in June 2023), revenue was 3.2% lower
than the prior year. Reductions in volume were broadly offset
by price increases.
Repair, maintenance and improvement (RMI) activity remains
the largest component in the UK and Ireland bathroom
market and our market-leading brands are positioned in the
mid-premium segment, which remained relatively resilient
throughout the year. Although we experienced a reduction in
housebuilding activity, there remains a significant shortage of
homes in the UK and Ireland and we continue to take share in
this sector and are well-placed for the recovery. Representing
a relatively small part of the UK and Ireland business, export
sales were slightly below the prior year.
Triton, Merlyn and Grant Westfield all performed strongly,
further growing their market-leading positions with well-
received new product launches. As noted at the half year,
VADO’s performance was impacted by delays in new product
launches. Encouragingly, VADO has taken the first important
step towards being able to offer a complete bathroom
solution following the recent launch of its Cameo collection,
which includes bathroom furniture for the first time. Cameo
was introduced to customers at the Kitchen, Bedroom and
Bathroom (KBB) tradeshow event in March 2024, and was
recognised as one of the top innovative products there.
UK & IRELAND
REVENUE
72% SHARE OF
GROUP
£281.9M
UK & IRELAND
UNDERLYING
OPERATING PROFIT
89% SHARE OF
GROUP
£38.4M
Highlights 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202436
STRATEGIC REPORT
BUSINESS REVIEW
UK & IRELAND
Case Study
On 25 April 2024, the Group announced that it had entered
into an agreement to sell Johnson Tiles UK to its existing
management team. The sale completed in May 2024.
Revenue of £31.1m (2023: £35.3m) and underlying operating
profit of £0.7m (2023: £0.5m) have been included in the
underlying results for the current and prior year. Further detail
can be found in the Chief Financial Officer’s Review on pages
40 to 43.
The UK and Ireland brands made significant investments in
systems (including ERP, supply chain and customer-facing
digital systems) in the year. Operational efficiency projects
were also delivered through warehouse and distribution
changes, such as the move to a single warehouse location at
VADO, consolidating four warehouses into a single modern
facility, driving efficiencies.
Our market-leading product vitality again saw the business,
not only growing share, but also being recognised by the
industry, winning a number of prestigious awards during the
year. These included Triton’s ENVi
®
shower (Housebuilder
Product’s Best Kitchen and Bathrooms Product), Grant
Westfield’s Multipanel Tile Collection (Ideal Home’s Best
Bathroom Surface Award) and the Pronteau Scandi-X tap in
Abode (Ideal Home’s Best Hot Water Tap). Merlyn also won a
number of awards in recognition of the brand’s outstanding
customer service and was recognised as Shower Brand
Supplier of the Year from the Fortis Buying Group.
Strong progress has also been made on our ESG strategy as
we embed sustainability initiatives to drive further competitive
advantage. More detail is included in the Sustainability
section on pages 48 to 89.
UK and Ireland underlying operating profit for the year
was 3.2% higher than the prior year, increasing by £1.2m to
£38.4m, with the operating margin increasing to 13.6% (2023:
12.6%). This was a record performance for the UK and Ireland
business. Operating cash conversion was significantly ahead
of the prior year, supported by our continued and successful
focus on working capital management.
Our UK and Ireland business is well placed to continue
growing market share and winning new customers in our
target market segments by leveraging our strong new product
development pipeline, scale-based collaboration and superior
customer service.
Group freight agreement
Leveraging our growing scale, we have been able
to streamline our inbound supply of products and
components from overseas by working directly
with global shipping companies. A Group shipping
agreement has now been reached encompassing
inbound supply for Merlyn, VADO, Croydex, Triton,
Grant Westfield and Abode.
The Group fixed rate, secured until 31 March 2025,
has helped us achieve significant cost savings as will
be reflected in margin improvements over the coming
year. This will also provide protection against the
escalating freight rates currently experienced, driven
by the tight supply of containers due to disruption in
the Red Sea, port congestion and increased demand
from Asia.
It is our scale that allows us to talk directly to these
global players, which differentiates us from our smaller
competitors and helps drive our market share by
providing that crucial reliability of stock availability to
our customers.
Being assigned priority booking status from the
shipping lines and having protection over our
container capacity requirements allows us to improve
both the predictability and flexibility of our incoming
products – helping us to mitigate associated risks to
our businesses.
The next step will be to manage our carbon emissions
associated with freight to reduce our footprint through
utilising methanol-fuelled ships and consolidation
to drive a higher percentage of 40-foot containers,
improving our shipping utilisation.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 37
STRATEGIC REPORT
37NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024
A RESILIENT
PERFORMANCE
Our South Africa business delivered
revenue of £110.2m (2023: 145.2m),
12.3% lower on a constant
currency basis, as macroeconomic
uncertainties impacted consumer
confidence in the year. Against the
challenging conditions, this was a
resilient performance in the year.
Our South African business delivered revenue of £110.2m
(2023: £145.2m), 12.3% lower on a constant currency basis,
as macroeconomic uncertainties impacted consumer
confidence in the year. This was a resilient performance
despite challenging and sustained national energy supply
interruptions which impacted at a time when consumers,
world-wide and in South Africa, were already struggling with
cost of living pressures.
The business, run by a highly experienced team, reacted
early and decisively ensuring that the business was able
to work through the challenges at hand. Whilst the energy
interruptions have improved to more manageable levels, the
impact that they had on consumers and the new build cycle
will take longer to unwind. The business remained profitable
and is well positioned to benefit from what we expect will be
a gradual recovery. The underlying growth drivers, in what
is a meaningful market, remain. These include a young and
growing population, a diversified economy and a shortage
of housing.
SOUTH AFRICA
REVENUE
28% SHARE OF
GROUP
£110.2M
SOUTH AFRICA
UNDERLYING
OPERATING PROFIT
11% SHARE OF
GROUP
£4.8M
Highlights 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202438
STRATEGIC REPORT
BUSINESS REVIEW
SOUTH AFRICA
Alternative flooring from Tile Africa
Whilst Tile Africa is best known for its retail shops and top-quality tiles,
they also offer a significant range of alternative floor coverings that
can be used in many settings.
Tile Africa, along with significant collaboration with sister company
TAL, recently completed a significant project with Protea Hotel at OR
Tambo International Airport, just outside of Johannesburg.
TAL’s technical department provided full method and material
specifications and signed off on all sub-floor preparation works.
Substantial sub-floor remedial work was completed before installing
Stone Plastic Composite vinyl flooring and carpeting.
The existing concrete in the hotel reception, main restaurant and bar
area was in a poor state. The client wanted to keep the rustic aircraft
“hangar look” so the team repaired cracks in the concrete, ground
down the surface of the floor and applied a clear epoxy coating to
turn the cracks into part of the design, whilst giving it an updated feel.
Interlocking vinyl flooring was also installed in the main restaurant and
bar, gym and meeting rooms. Belgotex carpet tiles were used in the
reception offices and Belgotex Sportec rubber flooring was used in
the weights section in the gym.
This project involved multiple flooring products and applications
and resulted in a prestigious finish and an extremely happy
customer experience.
Case Study
New product development remains a key focus with
encouraging vitality rates across our South African business,
particularly in Johnson Tiles SA with extensive investment
in new product designs, finishes and size formats in the
year. Tile Africa’s brand strength resulted in key account
wins across a variety of sectors, mainly with new housing
developers, hospitality (hotels) and automotive showrooms.
TAL, our market-leading adhesive business in South Africa,
continues to benefit from the development of internal and
external waterproofing products, with year on year growth
and ongoing new product development. House of Plumbing
opened their first new store as part of a wider national rollout
in Cape Town. These initiatives are underpinning our organic
growth focus.
As with our UK and Ireland brands, we are investing in driving
operational efficiencies and improved service levels through
targeted investments in our infrastructure and systems,
starting with a new ERP system for Tile Africa that is expected
to go live in the first half of the current financial year.
In line with the rest of the business, sustainability is a core
strategic driver for our South African business, and there are
a number of environmentally-focused initiatives in progress.
Further detail is included in the Sustainability section on
pages 48 to 89.
As a result of the market challenges, underlying operating
profit decreased to £4.8m (2023: £10.1m), with the underlying
operating margin at 4.4% (2023: 7.0%). Operating cash
conversion was ahead of the prior year due to early self-help
interventions in working capital as the market slowed. Our
South African business remains in a strong competitive position
and is well-placed to gain market share in its respective markets
as conditions gradually improve. We anticipate energy supply
constraints to further stabilise, driven by the investment of
private energy generation, and expect to benefit from the
improved levels of consumer confidence in due course.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 39
STRATEGIC REPORT
The Group is in a strong financial
position and is well placed to further
progress its strategic priorities.”
JAMES EYRE
Chief Financial Officer
Excellent cash conversion
and low leverage
Revenue
Group revenue at £392.1m (2023: £441.0m) decreased
by 11.1% on a reported basis and by 6.0% on a constant
currency like for like basis after adjusting for Grant
Westfield, acquired on 31 May 2022, and Norcros
Adhesives, closed in June 2023.
Underlying operating profit
Underlying operating profit decreased by 8.7% to £43.2m
(2023: £47.3m). Our UK and Ireland businesses delivered a
record performance with an underlying operating profit of
£38.4m (2023: £37.2m), and our South African businesses
recorded an underlying operating profit of £4.8m (2023:
£10.1m). Group underlying operating profit margin was
11.0% (2023: 10.7%).
Acquisition related costs
A cost of £4.3m (2023: £8.4m) has been recognised in the
year with the majority of the cost relating to intangible
asset amortisation of £6.5m (2023: £6.2m). A credit of
£3.0m has been reflected, representing a release of an
element of deferred contingent consideration resulting
from the acquisition of Grant Westfield.
• Group revenue decreased by 11.1% to £392.1m
(2023: £441.0m)
• Group underlying operating profit decreased by
8.7% to £43.2m (2023: £47.3m)
• Group operating profit was £39.9m (2023: £27.5m)
• Group underlying profit before tax was £36.4m
(2023: £41.8m)
• Diluted underlying earnings per share of 32.1p
(2023: 37.4p)
• Return on Capital Employed of 16.4% (2023: 18.5%)
• Underlying operating cash flow of £56.4m (2023:
£44.8m), 123% of underlying EBITDA (2023: 89%)
• Net debt of £37.3m (2023: net debt of £49.9m)
• Pension scheme in a surplus position of £16.5m
(2023: £14.9m)
Highlights 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202440
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER’S REVIEW
Exceptional operating items
An exceptional operating credit of £2.3m (2023: charge of
£9.8m) has been recognised in the year.
2024
£m
2023
£m
Restructuring costs (1.7) (4.8)
Reversal of impairment 4.0 —
Impairment — (5.0)
2.3 (9.8)
Restructuring costs
The £1.7m (2023: £4.8m) exceptional restructuring costs relate
to Johnson Tiles UK moving to a single kiln operation in the
first half of the year and the move to a single site in VADO.
Sale of Johnson Tiles UK and reversal
of impairment
The sale of Johnson Tiles UK completed in May 2024. This
completed after the year end at a consideration lower than
the carrying value of the assets of the business. In the next
financial year, we expect to recognise a non-cash exceptional
cost of circa £20m. The cash costs associated with the
transaction are expected to be less than £1m.
A £4.0m credit has been recognised in the year relating to the
reversal of previous impairments on land and buildings. The
Johnson Tiles UK site in Stoke-on-Trent has been professionally
valued in the year at a level exceeding its carrying value. As
a result, previous impairments, less an amount of subsequent
depreciation, have been reversed. This site has been retained
following the post-year end sale of Johnson Tiles UK.
Revenue in the year of £31.1m, representing approximately
8% of Group revenue (2023: £35.3m), and the underlying
operating profit in the year of £0.7m (2023: £0.5m) have
been included in the underlying results for the current and
prior year.
Finance costs
£0.9m
Discounting of
deferred contingent
consideration
(2023: £0.6m)
£0.4m
Amortisation of costs
of raising debt finance
(2023: £0.3m)
£5.2m
Interest payable
on bank borrowings
(2023: £3.7m)
£1.6m
Interest on
lease liabilities
(2023: £1.8m)
2023
2024
Net finance costs for the year of £7.3m compares to £5.8m in
2023. This movement is mainly due to the increase in Bank of
England base rates in the UK, partially offset by a reducing
net debt.
The Group has recognised a £0.8m IAS 19R interest credit in
respect of the UK defined benefit pension scheme surplus
(2023: credit of £0.6m) due to this accounting surplus
throughout the year.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 41
STRATEGIC REPORT
Underlying profit before tax
Underlying profit before tax was £36.4m (2023: £41.8m),
mainly reflecting the increase in underlying operating profit
noted above, and increased interest costs.
Taxation
The tax charge for the year of £5.8m (2023: £4.9m) represents
an effective tax rate for the year of 17.8% (2023: 22.6%).
The decrease in the effective tax rate mainly relates to the
increased proportion of taxable profits in the UK and Ireland
compared to South Africa.
The standard rates of corporation tax in the UK, South
Africa and Ireland in the period were 25% (2023: 19%),
27% (2023: 27%) and 12.5% (2023: 12.5%) respectively.
Dividends
Although underlying earnings have reduced in the year
to £28.8m (2023: £33.5m), the Board recommends a final
dividend of 6.8p per share (2023: 6.8p). This, combined with
the interim dividend of 3.4p per share (2023: 3.4p), results
in a total dividend of 10.2p per share (2023: 10.2p). The total
dividend is equivalent to a dividend cover of 3.1 times, slightly
lower than the year ended 31 March 2023 (3.7 times). The
cash cost of the total dividend is £9.1m.
This final dividend, if approved at the Annual General
Meeting, will be payable on 2 August 2024 to shareholders
on the register on 28 June 2024. The shares will be quoted
ex-dividend on 27 June 2024. Norcros plc operates a Dividend
Reinvestment Plan (DRIP). If a shareholder wishes to use the
DRIP, the latest date to elect for this in respect of this final
dividend is 12 July 2024.
Cash flow and net debt
Underlying operating cash flow was £11.6m higher than in the
prior year at £56.4m (2023: £44.8m).
2024
£m
2023
£m
Underlying operating profit 43.2 47.3
Depreciation and underlying
amortisation (owned assets) 4.3 5.0
Depreciation of right of use assets 4.7 4.6
Lease costs (6.5) (6.4)
Underlying EBITDA (pre-IFRS 16) 45.7 50.5
Net working capital movement 3.3 (13.3)
IFRS 2 charge add-back 0.9 1.2
Lease costs 6.5 6.4
Underlying operating cash flow 56.4 44.8
Underlying operating
cash conversion
1
123% 89%
1
Represents Underlying EBITDA (pre-IFRS 16) as a percentage of underlying
operating profit.
The main driver of the improvement in underlying operating
cash flow was the continued focus on working capital.
Underlying operating cash conversion in the year was 123%
of underlying EBITDA (2023: 89%).
The Group ended the year with net debt of £37.3m (2023:
net debt of £49.9m) on a pre-IFRS 16 basis. This represents
a leverage of 0.8 times underlying EBITDA (2023: 1.0 times).
Net debt inclusive of IFRS 16 lease liabilities was £59.5m
(2023: £74.6m).
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202442
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER’S REVIEW
CONTINUED
Balance sheet
The Group’s balance sheet is summarised below.
2024
£m
2023
£m
Property, plant and equipment 28.1 24.8
Right of use assets 18.0 20.0
Goodwill and intangible assets 161.2 167.1
Deferred tax (13.4) (15.0)
Net current assets excluding cash
and borrowings 77.1 80.6
Pension scheme surplus 16.5 14.9
Lease liabilities (22.2) (24.7)
Other non-current assets
and liabilities (5.6) (7.4)
Net debt (37.3) (49.9)
Net assets 222.4 210.4
Total net assets increased by £12.0m to £222.4m (2023:
£210.4m). Net current assets (excluding cash and borrowings)
decreased by £3.5m largely reflecting the reduction in working
capital in the year.
Property, plant and equipment increased by £3.3m to £28.1m
and included a reversal of a previous land and building
impairment of £4.0m and additions of £6.2m (2023: £5.4m).
The depreciation charge was £4.0m (2023: £4.9m) and
foreign exchange losses were £1.1m (2023: loss of £1.7m)
relating to assets held in South Africa. Disposals of £1.2m of
assets were reflected in the year as part of the closure of
Norcros Adhesives. Other movements totalled £0.6m.
Right of use assets decreased by £2.0m to £18.0m (2023:
£20.0m), primarily reflecting net additions of £3.7m, offset
by right of use depreciation of £4.7m (2023: £4.6m) and
exchange losses of £0.8m (2023: loss of £1.5m).
The deferred tax liability decreased by £1.6m to a liability of
£13.4m (2023: liability of £15.0m). The decrease is primarily the
result of the amortisation of acquired intangible assets and
actuarial losses on the pension scheme.
Pension schemes
On an IAS 19R accounting basis, the gross defined benefit
pension scheme valuation of the UK scheme showed a
surplus of £16.5m compared to a surplus of £14.9m last year.
The present value of scheme liabilities decreased by £10.0m
primarily due to benefit payments made in the year offset
by a decrease in the discount rate to 4.85% (31 March 2023:
4.90%). The value of scheme assets decreased by £8.4m
largely due to benefit payments made in the year.
As agreed at the 2021 triennial valuation, additional
contributions are £3.8m per annum from 1 April 2022 to
March 2027 (increasing with CPI, capped at 5%, each year).
The additional contributions in the current year were £4.0m.
The 2024 triennial valuation is underway.
The Group’s contributions to its defined contribution pension
schemes were £3.9m (2023: £4.0m).
Funding and liquidity
The Group extended its multicurrency revolving credit facility by
a further year in the period. The Group has committed banking
facilities of £130m (plus a £70m uncommitted accordion) with a
maturity date of the facility of October 2027.
JAMES EYRE
Chief Financial Officer
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 43
STRATEGIC REPORT
We want to ensure all our
people feel valued and
welcome in Norcros, and that
we appreciate their uniqueness
and capabilities.”
HELEN GOPSILL
Chief People Officer
Overview
I am pleased to present my first Chief People Officer’s
Review. What a wonderful year it’s been! When I was asked
to join as the Group’s first Chief People Officer, it was clear
that this was a business with a number of excellent teams
across the Group. The belief in the quality and importance
of these teams to Norcros was clear. Just as important was
the business’s desire to facilitate closer collaboration to
collectively leverage this inherent strength.
Initial observations
After joining in April 2023, and as I started to meet more of
our people across the businesses, my excitement about the
future for Norcros Group grew. The energy, optimism and
desire to develop together was evident everywhere.
It is obvious our people enjoy being part of both their
individual businesses and the wider Group, and that they
are really proud to deliver great customer service. They have
a huge desire to see us go from strength to strength, and to
play their individual part in making our mark in our industry
and for our customers.
I fundamentally believe that people want to do a great job at
work – and being part of a team that is focused on delivering
this is energising and exciting and gives us reasons to bring
our best selves to work each day. People thrive when they are
part of a successful business, and it is vital that we make sure
we provide all our people with the opportunity to make a real
difference at work.
It is a real privilege for me to be leading our work relating to
this, along with Thomas and the rest of the Executive and
Leadership team.
Focus in 2024
The year under review has been a year of strengthening
our foundations – in particular, addressing some of the key
opportunities that a group-wide talent management process
offers, and putting in place the solid building blocks in relation
to modern and cohesive processes within our HR operations
to support the Group’s ambitions.
We have attracted some wonderful new talent into the Group,
and we have combined this with a focus on developing the
capability of many of our team members who had been with
us for some time. We create a much stronger organisation
when we invest in our people like this.
In partnership with our Managing Directors, we have
repositioned and elevated certain roles and responsibilities,
allowing those business leadership teams to improve their
focus and dedication on key areas of their business strategies
for the future.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202444
STRATEGIC REPORT
CHIEF PEOPLE OFFICER’S REVIEW
Retain an entrepreneurial approach, but
shift towards increased Group alignment
One of our greatest cultural aspects is our focus on
collaboration. For some time now, the Group has operated a
system of what we call Forums – opportunities for our teams to
come together and network, share innovations and successes,
learn from each other and exchange great practices. We have
extended our Forums across new teams in the last year and
they are proving to be a hugely valuable mechanism for us. Our
people tell us regularly how much they value them, and we get
great participation and sharing at each one we operate.
Baseline core people processes
A business relies on its processes as well as the passion and
talent of its people, and we have been focusing on elevating
our talent management processes. This includes how we
attract people into the Norcros Group, development and
career programs, reward frameworks and succession planning.
We have also worked to improve consistency in how we
measure our successes. This consistency in measurement is
already providing improved insights at both brand and Group
level, and is helping us identify where we need to focus our
energies, and how we can add real value to the business
performance.
Diversity, equity and inclusion
Developing an inclusive culture where everyone feels valued
and can be themselves, bringing their best to their work, is
a critical focus area for us throughout the Group. The more
diverse our people are, the more we can benefit from their
unique perspectives, skills and qualities at work.
This focus on creating a deep culture where diversity, equity
and inclusion are integral to us, comes from the very top and
has full Board and Executive team support and drive.
Over the last year, we have been working across our brands
and teams to further embed this key part of our culture,
partnering with experts like Teresa Boughey, CEO at Jungle HR.
With her guidance we are working through a coherent program
to enable every brand to become increasingly inclusive. We
want to ensure that all our people feel valued and welcomed
and that we appreciate their uniqueness and capabilities.
Our teams in South Africa have significant experience in
this area with the benefits of increased diversity, equity and
inclusion being clear. Working with Marcy Murwa (Director
of People and Talent for Norcros South Africa), we are
already drawing upon their learnings for our work in the UK
and Ireland – yet another example of collaboration at work
within Norcros.
Our teams have responded brilliantly to the challenge
of nurturing the talents of all our people, and we have a
much improved mindset now – it is clear we are already a
more inclusive and welcoming organisation to work in than
ever before.
Putting our people first
We are focused on driving increased engagement across
Norcros because we know that a real sense of purpose and
belonging to a larger organisation will ensure that we further
develop the cohesion of our teams, which is already a key
business strength. We want our people to feel proud of being
part of both the Group and their own brands. As we increase
engagement and capture more of this from our highly-talented
teams, we will work even more magic together.
having the
right people
in the right
roles,
with the
right
skills and
attitude,
working
together
on the right
priorities,
supported
by the right
framework
of reward,
benefits
and culture.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 45
STRATEGIC REPORT
Priorities in the year ahead
Our updated strategy underlines the critical role that our
teams will play, both now and in the future. Key focus areas
from a Group perspective will centre on consistency of the
work experience and engagement, continuing to build our
people policies, and further deepening our work in creating a
truly diverse and inclusive culture.
Measure engagement consistently
across the whole Group
Building on our culture is at the core of our people strategy. In
the past, we have measured engagement at brand level, but
will be working with Great Places to Work to complete our first
Group-wide engagement survey in the current year. We are
looking forward to learning from what our people have to tell
us and being able to measure engagement across the Group
in a consistent way. The key will be to translate these learnings
into actions — and we are fully committed to doing so.
Critically analysing our people policies
We will be continuing our policy work this year, with an
emphasis on creating more ‘life- and family-friendliness’
within our HR policies. This includes ensuring our policies
are appropriate for our people across the whole span of
their lives, recognising that needs change depending on life
stage and priorities and responding to our people’s needs for
flexibility and balance.
Through reviewing our policies, we are working to ensure
we support our employees to find real and practical ways to
juggle life and its complexities, alongside their careers with us.
Diversity, equity and inclusion
Attracting and retaining the best talent is critical to our
business. We continue to build a business and environment
that gives us access to a wide pool of talent, with an
intentional focus on improving the diversity and inclusion
culture within each of our workplaces. The work being done
through our HR Forum and Women’s Leadership Forum in
particular is proving invaluable, so we will continue to support
these groups and ensure we learn from the insights they
bring to us. We will also focus on creating more transparency
and opportunities for feedback at all levels across the Group
to show us where we need to improve. We know everyone
has something to say, and we want all our people to know
they work in a culture where openness and transparency are
highly valued, and their opinion and views are welcomed.
Ultimately, our teams should fairly represent the richness of
the communities that we live and work in.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202446
STRATEGIC REPORT
CHIEF PEOPLE OFFICER’S REVIEW
CONTINUED
Q
What impressed you the most when
you joined Norcros?
A
It was really the successful track record of the Group,
which indicates that we currently sit on very strong
foundations. It is a huge privilege to be part of a team
focused on taking the business to the next level of
excellence. For a group of devolved businesses, there’s
still a real appetite to work collaboratively – so it is a
wonderful mix.
Q
What stood out
the most?
A
The capability of the business teams. We have a great
team of Managing Directors across the Group, and
they have strong teams around them running their
own businesses. They really own the relationships with
their customers and are passionate about working
better for them.
It takes very special people to feel that sense of
ownership over their own businesses and to also want
to be part of something bigger as a Group – we have
a real “special something” within our teams!
Q
Where do you think the biggest
opportunities lie?
A
We still have so much to gain by bringing our people
even closer together and creating ways in which they
can learn from each other across the Group. We have
many talented and highly-knowledgeable people with
unique experiences and skills, and the more we can
bring this out and learn from each other, the more we
will all win.
Q & A
with Chief People Officer Helen Gopsill
Longer-term vision
Careers
Looking toward the future, we have ambitious plans. We want
to provide greater visibility for all our people of how their
career can grow and evolve within the Group, to showcase
examples of where colleagues develop, try new things and
learn new skills.
We will also support and encourage more fluidity and
movement across our businesses, allowing people to stay
within the Group whilst enjoying a much richer career
experience than might be possible within any single
business. We currently operate in the UK, Ireland and
South Africa, and it will be fantastic to see increasing
numbers of our people exchanging and partnering with
internationally-based colleagues.
Transforming towards excellence
We are pushing at pace to improve across all areas of our
business, and our people strategy underpins all of it. We
have exceptional leaders with genuine, authentic care for
their people and a desire to delight their customers through
innovation and great service.
Every employee in our Group deserves to work for an excellent
manager or leader. As we look ahead, we will be doing
even more in this area to equip our management teams
with the skills they need to help them excel in their roles. We
want people to join our Group and to stay with us, as they
grow personally and professionally, evolving and maturing
throughout their career.
Summary
We are mindful that the world is changing, family and home
life is evolving and our customers’ needs are shifting.
In order for us to continue delighting our customers with
our innovation and great service, we are always looking
ahead to ensure that our focus is on developing the required
skills for the future and making sure that within Norcros we
have the talent and capabilities to always meet and exceed
customer expectations.
I am excited about what the future of Norcros holds, and I
am delighted to be working with such an inspiring group of
people as we go on this journey together.
HELEN GOPSILL
Chief People Officer
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 47
STRATEGIC REPORT
SUSTAINABILITY IS
AT THE HEART OF
OUR BUSINESS. IT
UNDERPINS OUR
STRATEGY. IT DRIVES
OUR COMPETITIVE
ADVANTAGE.
We have set a strategic objective to be renowned for
sustainability. This means that we are committed to managing
our impact on the environment and designing sustainable
products that minimise the use of water and energy. It is also
about sustainability in the widest sense, including our people,
governance and communities. This is not just the right thing
to do; this is about driving growth and operating margins in
our business as we improve our ability to win a larger market
share in the high-growth sustainable products market and
with our business-to-business customers who are depending
on suppliers like us to reduce carbon impact in bathroom and
kitchen products.
Over the last two years, we have developed a dedicated ESG
program that is focused around three elements:
• People — this includes investing in our talent and
developing a diversity, equality and inclusion program.
• Product — this involves driving our new product
development program and enhancing product design
and innovation.
• Planet — this includes engaging with and investing in the
communities in which we work. It also includes delivering
our Net Zero Transition Plan and reducing our carbon
emissions across all scopes, which involves reducing our
impact upstream with our supply chain and downstream
with our customers and end consumers.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202448
STRATEGIC REPORT
OUR APPROACH TO SUSTAINABILITY
ESG DRIVING COMPETITIVE ADVANTAGE
People
Health and
safety
Talent and
workforce
development
Diversity and
inclusion
Ethical conduct
and integrity
Planet
Climate change
and emissions
Circular
economy
Social and community
engagement
Product
Innovative and
efficient products
Product quality
and safety
Supply chain
management
Within these elements, we focus on ten ESG priority themes. In 2024, we added two new priority
themes: circular economy and social and community engagement. The elements and themes are
shown in the diagram.
We monitor progress across these elements in our ESG Management Information (MI) Framework outlined on pages
52 to 55.
These elements and ESG priority themes are the lifeblood of our business. They enable our culture, our strategy, our
competitive advantage and our performance. By embracing sustainability as a strategic imperative, we demonstrate our
commitment to delivering value not only to our shareholders but also to the planet and future generations.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 49
STRATEGIC REPORT
Achievements and priorities
Key achievements this year include:
Approval of science-based targets
Our emissions targets have been approved by the Science
Based Targets initiative (SBTi). This covers our long-term target
of net zero emissions across our value chain by 2040 and
near-term targets for scopes 1, 2 and 3 for 2028 (from a 2023
base year).
Published the Group’s first Net Zero
Transition Plan
We have formalised the Group’s SBTi targets and action
plans into a Transition Plan Taskforce (TPT) aligned Net Zero
Transition Plan. A summary is included on pages
80 to 83 and full details will be published on our website at
www.norcros.com in the current year.
We continue to invest in carbon reduction
initiatives as part of delivering our Net Zero
Transition Plan
Recent examples include increasing the percentage of
company fleet that is either electric or hybrid, installing LED
lighting and energy efficient air conditioning units.
Submitted to CDP for the first time
We achieved a B grade in CDP Climate Change.
Created our Sustainable
Products Framework
We are developing a framework to classify our products as
sustainable, based on both environmental and social criteria,
and working with our brands to understand what proportion
of our revenue comes from products classed as sustainable
and the implications on future revenue growth.
Enhancing supply chain management
We have published our first Supply Chain Policy and Supplier
Assessment Form, which set out our expectations of suppliers
in relation to environmental and social issues. We plan to
continue our discussions around the development of internal
and external KPIs associated with our supply chain in the rest
of 2024. Of note this year, Triton achieved EcoVadis silver in its
first submission.
We continue to innovate in the development of
low carbon products
Our brands and products play an increasingly meaningful
role developing products that reduce and recycle. Abode’s
Naturalé was shortlisted for ‘Water Saving Domestic Product
of the Year’ at the Energy Saving Awards 2023.
Launch of Triton’s next generation electric
shower, ENVi
®
ENVi
®
became a ClimatePartner certified product through
performing a full carbon life cycle analysis and was awarded
a special commendation at the BMA Sustainability Awards.
The ENVi
®
shower is expected to generate up to 70% less
carbon emissions than a mixer shower connected to an A
rated combi boiler. We plan to drive sales of this product in all
channels in financial year 2025.
Embedded our ESG Forum
This team meets regularly throughout the year to develop
and review our ESG program. They have worked together to
develop our Net Zero Transition Plan and we review progress
against milestones each quarter.
Looking forward, our ESG priorities are to:
• Continue to deliver against our Talent and
DE&I program
• Continue to deliver against our Net Zero Transition Plan
• Refine and publish our Sustainable Products
Framework and create our Sustainable Products
Index. This will start to drive more investment towards
sustainable products
• Continue to improve our ESG data. This will provide
added value for customers as it helps them measure
and mitigate their scope 3 emissions. It also helps us to
drive improvements in sustainable product development
• Report against CDP for the second time, building on
last year’s first submission
• Monitor the implementation of our new Supply Chain
Policy and Assessment by ensuring that our suppliers
follow the same sustainability standards as the Group
• Monitor progress against the metrics reported in our
MI Framework and look to set additional targets on our
material topics
• Development of a Group Environmental Policy to
outline our expectations on the key environmental
issues we already monitor through our MI Framework
• Explore options to link Executive remuneration to
ESG performance
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202450
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
Sustainability governance
The Board of Directors is responsible for ensuring key
sustainability policies, such as the Code of Ethics and
Standards of Business Conduct, are communicated, understood
and observed by all Group brands, employees and associates.
Day-to-day responsibility for promoting and implementing
these policies is delegated to brand senior management.
Our Group ESG Forum, made up of representatives from
each of our brands, enables sustainability-related information
to be discussed freely across the Group. We hold quarterly
ESG Forum meetings, which allow us to prioritise our impact
through organisational workstreams and to monitor progress
against our plans across the Group. The continuity of the ESG
Forum has accelerated the development of our sustainability
strategy and has enabled sharing of best practice across the
Group. Full details of our sustainability governance model
and its responsibilities are outlined in the TCFD Report on
page 90.
ESG MI Framework
Our MI Framework enables us to monitor our ESG journey
and ensure we execute our strategy. This is our second year
of reporting against our MI Framework, and we will assess our
progress in more detail on pages 52 to 55. The table shows
our ten priority ESG themes and the metrics used to track
each theme.
Lower
Lower
Higher
Higher
Influence on stakeholders
Impact on Norcros
Freedom of
association
Communities
and partnerships
Product quality and safety
Ethical conduct and integrity
Water use
Air pollutants
Packaging and plastic
Innovative and efficient products
Climate change and emissions
Human rights
Cyber and data security
Waste management
Effective use of raw materials
Energy management
Diversity and inclusion
Supply chain management
Health and safety
Talent and workforce development
We have grouped our material issues into three broad categories:
Environment Social Governance
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 51
STRATEGIC REPORT
Priority ESG themes
ESG pillar Priority theme Our ambition Key performance indicator 2024 2023 Read more
People
Health and safety
Working to be incident and injury free 1. Accident Incident Rate (reportable
injuries per 100,000 employees)
259 781 Page 57
2. Fatalities 0 0 Page 57
Talent and workforce
development
Employer of choice in the kitchens, bedrooms and
bathrooms (KBB) sector
1. Average number of training hours
per employee
57 52 Page 61
2. Total employee turnover 18% 14% Page 61
Diversity and inclusion
Diversity and inclusion are at the heart of who we are;
we continue to build and develop a team with a variety
of backgrounds, skills and views
1. Gender diversity Male: 67%
Female: 33%
Male: 68%
Female: 32%
Page 63
Ethical conduct
and integrity
Operate with integrity and respect to regulation and
laws in all dealings
1. Proportion of eligible employees
who received training in bribery
and corruption
79% 76% Page 65
2. Total number of reported breaches
of Code of Ethics and Standards
of Business Conduct in total
(and those specifically relating
to bribery)
89 14 Page 65
3. Total number of investigated
breaches of Code of Ethics and
Standards of Business Conduct in
total (and those specifically relating
to bribery)
89 14 Page 65
4. Total number of upheld breaches of
Code of Ethics and Standards
of Business Conduct in total
(and those specifically relating
to bribery)
30 14 Page 65
5. Percentage of staff disciplined or
dismissed due to non-compliance
with Anti-Bribery/Corruption Policy
0.59% 0.37% Page 65
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202452
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
CONTINUED
Priority ESG themes
ESG pillar Priority theme Our ambition Key performance indicator 2024 2023 Read more
People
Health and safety
Working to be incident and injury free 1. Accident Incident Rate (reportable
injuries per 100,000 employees)
259 781 Page 57
2. Fatalities 0 0 Page 57
Talent and workforce
development
Employer of choice in the kitchens, bedrooms and
bathrooms (KBB) sector
1. Average number of training hours
per employee
57 52 Page 61
2. Total employee turnover 18% 14% Page 61
Diversity and inclusion
Diversity and inclusion are at the heart of who we are;
we continue to build and develop a team with a variety
of backgrounds, skills and views
1. Gender diversity Male: 67%
Female: 33%
Male: 68%
Female: 32%
Page 63
Ethical conduct
and integrity
Operate with integrity and respect to regulation and
laws in all dealings
1. Proportion of eligible employees
who received training in bribery
and corruption
79% 76% Page 65
2. Total number of reported breaches
of Code of Ethics and Standards
of Business Conduct in total
(and those specifically relating
to bribery)
89 14 Page 65
3. Total number of investigated
breaches of Code of Ethics and
Standards of Business Conduct in
total (and those specifically relating
to bribery)
89 14 Page 65
4. Total number of upheld breaches of
Code of Ethics and Standards
of Business Conduct in total
(and those specifically relating
to bribery)
30 14 Page 65
5. Percentage of staff disciplined or
dismissed due to non-compliance
with Anti-Bribery/Corruption Policy
0.59% 0.37% Page 65
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 53
STRATEGIC REPORT
Priority ESG themes
ESG pillar Priority theme Our ambition Key performance indicator 2024 2023 Read more
Product
Innovative and
efficient products
Drive growth through high-quality, design-led and
sustainable products
1. Revenue from sustainable products n/a n/a Page 68
2. Proportion of revenue from
products that have been launched
in the last three years
22% 24% Page 68
Product quality
and safety
Design, manufacture and/or supply high-quality and
safe products
1. Customer products recalled due
to safety issues as a proportion of
total products sold
0.001% 0.003% Page 69
2. Customer products recalled due
to poor product quality as a
proportion of total products sold
0.49% 0.91% Page 69
Supply chain
management
Ensure our supply chain operates in line with our
ESG standards by applying our new Norcros Supply
Chain Policy
1. Monitor the number of suppliers
that conform to the Group Supply
Chain Policy
n/a n/a Page 72
Planet
Climate change
and emissions
A sustainable business, reducing our impact on the
environment
• Net zero by 2040
• Reduce energy use at our sites
• Increase proportion of electricity from renewable
sources
• Minimise toxic emissions
1. Total scope 1, 2 and 3 emissions
(tCO
2
e)
911,038 872,498 Page 77
2. Total energy consumption (kWh) 261,595,842 295,435,941 Page 77
3. Percentage of electricity from
renewable sources
37% 38% Page 77
Circular economy
Make the most efficient use of material resources across
our business
• Minimise waste to landfill and increase recycled waste
• Reduce water use at our sites
• Operate at or work towards Environmental
Management standard ISO 14001
1. Total waste (tonnes) 12,697 15,656 Page 86
2. Water withdrawal (m
3
) 178,439 195,266 Page 86
3. Water consumption (m
3
) 144,210 135,865 Page 86
4. Percentage of packaging used
from recycled materials
40% 40% Page 86
Social and community
engagement
Engage our wider community to achieve sustainable
outcomes
1. Establish an appropriate KPI for
community engagement
n/a n/a Page 87
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202454
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
CONTINUED
Priority ESG themes
ESG pillar Priority theme Our ambition Key performance indicator 2024 2023 Read more
Product
Innovative and
efficient products
Drive growth through high-quality, design-led and
sustainable products
1. Revenue from sustainable products n/a n/a Page 68
2. Proportion of revenue from
products that have been launched
in the last three years
22% 24% Page 68
Product quality
and safety
Design, manufacture and/or supply high-quality and
safe products
1. Customer products recalled due
to safety issues as a proportion of
total products sold
0.001% 0.003% Page 69
2. Customer products recalled due
to poor product quality as a
proportion of total products sold
0.49% 0.91% Page 69
Supply chain
management
Ensure our supply chain operates in line with our
ESG standards by applying our new Norcros Supply
Chain Policy
1. Monitor the number of suppliers
that conform to the Group Supply
Chain Policy
n/a n/a Page 72
Planet
Climate change
and emissions
A sustainable business, reducing our impact on the
environment
• Net zero by 2040
• Reduce energy use at our sites
• Increase proportion of electricity from renewable
sources
• Minimise toxic emissions
1. Total scope 1, 2 and 3 emissions
(tCO
2
e)
911,038 872,498 Page 77
2. Total energy consumption (kWh) 261,595,842 295,435,941 Page 77
3. Percentage of electricity from
renewable sources
37% 38% Page 77
Circular economy
Make the most efficient use of material resources across
our business
• Minimise waste to landfill and increase recycled waste
• Reduce water use at our sites
• Operate at or work towards Environmental
Management standard ISO 14001
1. Total waste (tonnes) 12,697 15,656 Page 86
2. Water withdrawal (m
3
) 178,439 195,266 Page 86
3. Water consumption (m
3
) 144,210 135,865 Page 86
4. Percentage of packaging used
from recycled materials
40% 40% Page 86
Social and community
engagement
Engage our wider community to achieve sustainable
outcomes
1. Establish an appropriate KPI for
community engagement
n/a n/a Page 87
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 55
STRATEGIC REPORT
RELEVANT SDGs
We recognise the importance of
doing the right thing for people
– our employees, customers and
stakeholders.
We are committed to investing in our workforce and recognise
the importance of their opinions to our success. We are
continuously working towards a sustainable, safe and diverse
working environment to help move the Group forward.
HEALTH AND SAFETY
TALENT AND WORKFORCE
DEVELOPMENT
DIVERSITY AND INCLUSION
ETHICAL CONDUCT AND
INTEGRITY
Key areas and commitments
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202456
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PEOPLE
Our ambition: Working to be incident and injury free
HEALTH AND SAFETY
Safety first
Our Group Health and Safety Policy is driven from the
top of the organisation with the Board having ultimate
responsibility. The policy, which covers all employees, sets
out our commitment to create, maintain and continuously
improve a safe and healthy working environment for
employees, contractors and visitors. Our working environment
is designed with workplace ergonomics in mind and to
prevent occupational accidents and illnesses. We monitor
key health and safety KPIs at operational Board and
management meetings.
Five of our brands, covering 47% of turnover, are externally
certified to the Health and Safety Management System ISO
45001 standard and we are looking to expand this coverage
across the Group. Many of our employees have access to
online health and safety training, which provides a range of
training modules as required. In addition, where hands-on or
specialist training is required, we use regular “toolbox talks”
and provide specific training.
Safety performance
We have a proud track record of safety performance, and
we are committed to raising awareness of health and safety
issues across the workplace. There were no fatalities recorded
in the year (2023: nil) and there have been no fatalities
recorded over the last decade. We record the Accident
Incidence Rate (AIR) monthly for each location and for the
whole Group, which includes all reported accidents, however
minor. We recorded a total of three serious reportable
accidents in 2024 (2023: 18; 2022: 5).
Accident Incidence Rate (AIR) —
serious reportable accidents
2024 2023 2022 2021
AIR per 100,000
employees
259
781
1
232 205
1
Improved monitoring and reporting and the addition of Grant Westfield
(manufacturing).
The majority of accidents in 2024 were caused by handling,
lifting or carrying, or by slips, trips and falls. Last year we
improved our safety procedures and refocused our efforts on
good health and safety management, which has contributed
towards a reduction in our AIR.
We are committed to learning safety lessons from these
experiences and to improve our health and safety
performance. All accident statistics and their causes are
regularly reviewed by the Group Health and Safety Managers’
Forum. We maintain externally-managed whistleblowing
reporting lines that are available to all employees where they
can report confidentially, and anonymously should they want
to, any concerns they may have in respect of health and
safety matters.
Norcros South Africa
Health and Safety
Norcros South Africa has implemented a hazard
identification QR code system which facilitates the
reporting of near misses. All colleagues have access to
the system via custom reporting slips or scanning a QR
code on their smart phone. Posters have been placed
in easily accessible locations in stores, warehouses and
office spaces and training provided to all staff.
The collection of this data enabled Norcros South
Africa to understand its potential accident “hot
spots” and implement risk mitigation procedures for
unsafe areas.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 57
STRATEGIC REPORT
nourish@norcros
To boost employee morale and engagement, the nourish@norcros
program was designed and implemented over a five-week period
across Norcros South Africa. Keeping their purpose and values
in mind, the aim was to create a safe space for all employees,
appreciating and recognising them, communicating the business
strategy and encouraging overall employee wellbeing.
Each week had a specific theme and, whilst some people
particularly appreciated sharing their inspiring stories and receiving
thank you notes from their team members during lunches, others
were motivated as they understood their division’s strategy. “It
matters how you do it at Norcros” videos captured the spirit of our
organisation. Teams also competed in a step challenge as well as
supporting our TAL and Johnson Tiles SA soccer teams.
Most teams participated enthusiastically in the planned weekly
events, receiving great prizes tailored specifically to the program.
More than 60% of employees joined the WhatsApp channel, a
newly-introduced communication approach to ensure all employees
stayed informed.
Feedback received from teams indicated that nourish@norcros
provided a platform for meaningful conversations, team support
and employees purely enjoyed coming to work. The key takeaway
was that it doesn’t matter what you do, it matters how you do it.
The way we treat each other and having passion for what we do is
what truly matters.
Health and wellbeing
We treat everyone with respect and encourage
them to be themselves. We promote employee
wellbeing and reduce stress through several
initiatives and support mechanisms. Support
is provided to all UK and Ireland employees
through our Employee Assistance Program that
extends to all aspects of wellbeing, including free
access to various independent support helplines
(e.g. stress, health, lifestyle, etc.). Employees
in South Africa receive support through a
comprehensive wellness centre available to all
staff. Across the Group, we have various other
health and wellbeing initiatives that aim to
improve the mental wellness of our teams. These
include additional wellness days off, on-site
welfare facilities, Medicash health plans and
mental health first aid training. Several of our
brands have also introduced the “Help at Hand”
app, which includes mental health support, GP
access, physiotherapy access, financial support
and discounts to employees.
Case Study
HEALTH AND SAFETY (CONTINUED)
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202458
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PEOPLE CONTINUED
having the
right people
in the right
roles,
with the
right
skills and
attitude,
working
together
on the right
priorities,
supported
by the right
framework
of reward,
benefits
and culture.
We have a strong team of passionate, talented, driven people
across our businesses and Group office, and we know that
they are the key to our continued and growing success. We
are committed to educational and career development, and
to building the capabilities of our existing teams, attracting
new talent into the business, and empowering our people to
take ownership and accountability in their individual roles
and businesses, as well as coming together to be part of
something greater.
As the world continues to change at rapid pace, our people
and customers will have different requests of us, and we are
committed to investing in the skills for the future to make sure
we have the talent and capabilities that we need to continue
to meet and exceed their expectations.
Workforce engagement and
communication
We engage and communicate with employees across the
Group through our brand structure. This ensures that all
communication and engagement is appropriate to each brand
and location. We have a very effective approach to cascading
information about business changes, key issues and business
performance updates through the organisation using a variety
of channels including the line management structure, emails
and Microsoft Teams calls. Additionally, many of our brands
create and share regular employee communications through
written content including “The Pulse” employee magazine at
Croydex and Abode’s “Year in Review”, or in-person gatherings
such as VADO’s V-Team Briefs.
In many of our brands, employee surveys are undertaken
on a regular basis, allowing our local management teams
to directly hear what would make our workplaces better for
our employees. Going forward, we will be partnering with
Great Place to Work and will measure employee engagement
consistently across the Group. Our collective focus will be on
driving improvements in the levels of employee engagement
that we see.
The Board primarily engages with employees via Alison
Littley, the Non-executive Director for workforce engagement,
together with the Executive team. Throughout the year, Alison
conducts site visits to tour the brands’ operations and meet
with management and employees. She gathers feedback and
reports back to the management teams and the Board, and
follows up to ensure appropriate action is taken.
Our talent strategy is based on:
Our ambition: Employer of choice in the kitchens,
bedrooms and bathrooms (KBB) sector
TALENT AND WORKFORCE DEVELOPMENT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 59
STRATEGIC REPORT
Talent and career management
One of our key priorities this year has been investing
in talent development, and many of our senior leaders
across the Group are participating in their own mentoring
and/or individual development programs. This focus on
personal development starts at the top and cascades
down throughout the entire organisational structure. All our
brands have staff training programs that are suitable for
the development of appropriate technical and people skills.
Coaching and mentoring programs are focused on further
developing the individual’s unique work challenges and
opportunities, as well as on the individual’s personal style
and behaviour. We acknowledge that the world of work is
changing for many, and we commit to staying relevant in our
approach to careers and talent development.
We continue to invest in our online learning platform,
Flick, which includes training modules on Anti-Bribery and
Corruption, Information Security and GDPR. There are a
range of other training modules, such as Cyber Security and
Equality and Diversity, which are also available to the Group’s
UK employees.
Several of our brands also provide apprenticeships
and support for external courses such as accounting
qualifications. Our South African brands support the Youth
Employment Service (YES) and have employed 200 young
apprentices in the first three years of the program, in addition
to employing 20 apprentices in their Youth in Engineering
program and 20 apprentices in Women in Plumbing.
Using personality profiles to
better understand ourselves
and our teams
“Service Animals” is a personality profiling tool
that helps people understand their natural service
style, how to recognise others’ profiles and develop
techniques to adapt in order to build stronger
relationships and improve team dynamics.
Triton trialled this tool with their Customer Service team
and received outstanding feedback from employees.
Utilising their training, the team felt better able to
understand how to adjust their communications
with external customers and adapt their behaviour
depending on what type of personality they identify
they are likely engaging with. It has also generated
many internal benefits, including more collaborative
teams and a more agreeable and tolerant culture,
resulting in an improved working environment and
better work efficiencies throughout Triton.
The feedback was shared with the Triton board, and
it was concluded that having a common language
and understanding would help communication both
within and across teams, helping break down barriers
and silos. The Service Animals workshop has now
been completed for the majority of employees and is
considered a great success.
Case Study
TALENT AND WORKFORCE DEVELOPMENT (CONTINUED)
STRATEGIC REPORT
60 NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024
OUR SUSTAINABILITY STRATEGY
PEOPLE CONTINUED
Labour policy
All employees are entitled to a fair salary and other
terms and conditions of employment, as appropriate.
Our policy is to comply, at the very least, with minimum
wage legislation for any job role for all employees and
we seek to be competitive as is appropriate to the role
and business in question. Legally required benefits such
as annual leave, sick leave, maternity leave and normal
working patterns and hours are, of course, applicable
to all. All UK and Ireland employees have access to a
save as you earn scheme. Employees are encouraged
to be involved in the Company’s performance through
employee share schemes, and other means of
incentivisation and reward. As per UK regulation, all UK
employees have the option to enrol in our workplace
pension scheme.
Employee turnover
2024 2023
UK
20%
16%
South Africa
17%
12%
Tota l
18%
14%
With our increasing focus on staff retention, we continue
to monitor this KPI and will take appropriate actions to
reduce the employee turnover rate. We want to grow
our people’s careers with us for the long term, retaining
the very best talent from the industry for Norcros. This
year, we have seen an increase in our employee turnover,
which reflects the general economic situation in both
South Africa and the UK.
Training time 2024 2023
UK and Ireland
Proportion (%) of employees who received training
100%
100%
Total number of training hours
29,860
39,507
Average number of training hours per employee
27
34
South Africa
Proportion (%) of employees who received training
41%
66%
Total number of training hours
105,599
86,368
Average number of training hours per employee
84
69
Group total
Proportion (%) of employees who received training
69%
71%
Total number of training hours
135,459
125,875
Average number of training hours per employee
57
52
The table above outlines the Group’s training statistics for 2024. This year, we have increased our average training hours per
employee across the Group, which reflects increased usage of Flick, our online training portal, and our additional training on
Group policies, as well as ERP training requirements in South Africa. As part of our ESG MI Framework and our developing
People strategy, we will monitor training KPIs, consider targets and manage our business towards the optimum type of training to
achieve our strategic objectives.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 61
STRATEGIC REPORT
We believe that a diverse and inclusive organisation
promotes greater innovation and more effective decision
making. Our Code of Ethics and Standards of Business
Conduct sets out our overall approach, in which all
employees are encouraged to advance within the Group
and have equal opportunities to do so subject to them
possessing the necessary skills and aptitudes. The Board
is committed to gender equality, which includes equality
of pay between men and women. The Board is satisfied
that there is no pay inequality at Norcros, regardless
of gender.
Norcros is committed to not discriminating in the
employment of any person due to race, colour, national
origin, family responsibility, trade union membership,
sex or gender identity, sexual orientation, age, religion
or belief, disability status social background, political
opinion and sensitive medical conditions or any other
category protected under applicable legislation in any
jurisdiction in which it operates. This commitment applies
to all personnel actions including hiring, promotion,
termination, transfer and compensation/benefits. Norcros
also does not tolerate any form of workplace harassment,
including sexual harassment. We maintain external
independent whistleblowing reporting lines where
employees can report any concerns they may have in
respect of discrimination confidentially and anonymously
should they wish to.
In the event of existing employees becoming disabled,
every effort is made to ensure that their employment with
the Group continues, and that appropriate training is
arranged. It is the policy of the Group that the training,
career development and promotion of disabled persons
should, as far as possible, be identical to that of an able
bodied person. The Group makes the workplace as
accessible to people with disabilities through initiatives
such as stair evacuation chairs, accessible store and
flexible working.
Our ambition: Diversity and inclusion are at the heart of
who we are; we continue to build and develop a team with
a variety of backgrounds, skills and views
DIVERSITY AND INCLUSION
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202462
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PEOPLE CONTINUED
The Group promotes diversity and inclusion through several
initiatives and support mechanisms. Our brands have varying
special leave policies including compassionate leave, flexible
working, carer leave and study leave, which help employees
balance the demands of domestic and work responsibilities
at times of urgent or unforeseen need. We already deliver a
range of diversity and inclusion initiatives across our brands
and, as we further develop our diversity and inclusion
program, we are introducing more Group-wide coordination
and increasing focus on how diversity and inclusion can
contribute to our employee value proposition and improve
employee engagement. We will be introducing new KPIs and
targets, including ethnicity.
We know that our people live complex lives, with many
demands upon them personally and professionally. If we are to
attract and retain the best talent, we must support our people
to balance their lives effectively, thereby enabling them to bring
their very best selves to work each day. We are committed to
working in partnership with our employees, in particular when
the demands of life are at their most challenging.
We have supported a number of employees recently by
mutually agreeing changes such as temporarily reduced or
increased working hours, amendments to shift and working
patterns, adjusting working locations to accommodate either
permanent or temporary change in physical abilities, and by
exploring the use of working from home in many instances.
In this way, we are able to demonstrate to our people, and
to those who may join us in future, that we care about their
needs, and will be a fair and reasonable employer for the
long term, valuing their contributions and supporting them to
succeed and thrive.
Number of staff by year by region at 31 March
2024 2023 2022 2021
UK & Ireland 1,158
1,092 1,002 983
South Africa 1,099
1,266 1,194 1,072
Total 2,257
2,358 2,196 2,055
Gender diversity statistics
2024 2023
Male Female Total
%
Male
%
Female Male Female Total
%
Male
%
Female
Senior management 48 15 63 76% 24%
46 15 61 75% 25%
Total employees 1,509 748 2,257 67% 33%
1,596 762 2,358 68% 32%
1
Table outlines senior manager and employee numbers and gender split as required under the Companies Act. Senior manager is defined in line with the Companies Act as a person
who: (a) has responsibility for planning, directing or controlling the activities of the company, or a strategically significant part of the company; (b) is an employee of the company.
These figures are accurate as of 31 March 2024.
2
Total employee figures include senior management and Directors as of 31 March 2024.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 63
STRATEGIC REPORT
Case Study
DIVERSITY AND INCLUSION (CONTINUED)
Norcros South Africa’s Women’s Forum
The Norcros South Africa Women’s Forum was established
in recognition of the fact that the Group operates in
an industry that has been historically male dominated,
and therefore the structures and facilities in place
have generally been designed to accommodate men.
The Forum sets out to assist in improving and raising
awareness for women within the manufacturing and
retail space, working with businesses to improve working
structures and facilities and eliminate identified barriers
that hinder the desired representation of women within
the space.
These barriers include:
• wage gap;
• career advancement limitations;
• home and work commitments;
• hostile work environments; and
• facilities and tools.
The Forum was created to identify and systematically
eliminate these barriers, increasing diversity within the
business and promoting equity and inclusion.
The Forum focuses on:
• building a community for internal networking
opportunities for females within the business;
• empowering women to become advocates for
themselves and other women in the business;
• advising on the recruitment and retention of females in
the business;
• advocating for the interests and concerns affecting
women; and
• promoting professional development.
The Forum includes representatives from women across
all four South African brands, and includes women from
diverse backgrounds, age, occupational levels and race.
The establishment of the Norcros South Africa Women’s
Forum is a pivotal step in fostering a more diverse and
inclusive working environment. Norcros South Africa
remains committed to creating safe workspaces that
openly support the development of women into the
leadership structures and other areas of the business.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202464
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PEOPLE CONTINUED
Our ambition: Operate with integrity and respect to
regulation and laws in all dealings
ETHICAL CONDUCT AND INTEGRITY
The Code of Ethics and Standards of Business Conduct (the
Code and Standards) applies in all areas of our business and
to all officers, Directors, employees, contractors and agency
staff employed by or working for Norcros plc or any division
of Norcros plc. The Board is responsible for ensuring these
business principles, such as anti-bribery and corruption and
diversity, are communicated to, understood and observed
by all Group brands, employees and associates. This Code
and Standards will be made available to every employee
at the start of their relationship with Norcros and will be
communicated to all new employees of any business acquired
by Norcros. This year, there were 89 reported breaches of
the Code and Standards, with all of them occurring at South
African brands. Of those 89 breaches, all were investigated
and 30 were upheld. The introduction of Bribery and
Corruption training, as well as other topics within the Code
and Standards such as bullying and harassment, will help to
reduce the number of future breaches.
Whistleblowing
We encourage an environment where honest and open
communication is expected, with employees feeling
comfortable bringing forward any concerns or violations
of Group policies. This is embedded into the Code and
Standards, and legal protection exists for all whistleblowers.
We maintain a whistleblowing policy and engage two
independent and confidential whistleblowing service
providers — one covering South Africa specifically and the
other covering all other locations. Both lines operate 24/7
and 365 days a year in the whistleblower’s chosen local
language. Concerns and reports can be made in confidence
anonymously, and we will not discriminate or retaliate against
any employee who reports suspected violations in good faith
or who co-operates in any investigation or enquiry regarding
possible violations. Reports on the use of these services,
any significant concerns that have been raised, details
of investigations carried out and any actions arising as a
result are reported to the Audit and Risk Committee at each
meeting. The Committee also receives papers on incidents of
fraud, or attempted fraud, and reviews them at each meeting.
At least annually, the Committee conducts an assessment
of the adequacy of the Group’s procedures in respect of
compliance, whistleblowing and fraud.
Anti-bribery and corruption
We prohibit bribery and all other types of fraud, and will take
disciplinary and/or legal action as appropriate in all cases
of actual or attempted fraud across all operations. We have
a strict Anti-Bribery and Corruption Policy, which applies to
suppliers, set out in the Code and Standards and we conduct
our business in a fair, open and transparent manner. The
Board of Directors has overall responsibility for ensuring this
policy complies with our legal and ethical obligations, and
that all those who have influence comply with it. We prohibit,
and will not accept, facilitation payments or “kickbacks”
of any kind. Facilitation payments are typically unofficial
payments made to secure or expedite a routine government
action by a government official. Employees are required to
undertake training under our Anti-Bribery and Corruption
Policy at regular intervals and appropriate procedures are
in place at all locations to mitigate the risk of any employee
committing an offence against the policy.
During the year, 79% of eligible Group employees received
training on bribery and corruption. There were 13 incidents
of employees being disciplined or dismissed due to non-
compliance with our Anti-Bribery and Corruption Policy. This
accounts for 0.59% of total Group employees. All of these
incidents occurred in our South African brands, and we have
taken measures to reduce risk of similar incidents in the future.
Our Anti-Bribery and Corruption Policy sets out our approach
in the following areas:
• hospitality and gifts offered to third parties;
• hospitality, gifts and other goods or services offered to
Norcros employees by third parties;
• payment of third parties’ travel expenses;
• facilitation payments;
• political contributions;
• lobbying;
• sponsorships; and
• civic, charitable and other donations.
STRATEGIC REPORT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 65
ETHICAL CONDUCT AND INTEGRITY (CONTINUED)
Human rights
Our corporate values focus on respect, integrity and fairness.
We are committed to respecting the dignity of the individual
and to adhering to the United Nations (UN) Declaration of
Human Rights, and the International Labour Organisation’s
Declaration on Fundamental Principles and Rights at Work and
other core conventions. These principles are applicable across
all our operations. The Directors do not consider human rights
issues to be a material risk for the Group, principally due to the
existing regulatory frameworks in place in the UK and South
Africa, being the primary geographical locations in which
we operate. In South Africa, the businesses are cognisant of
their responsibilities under the Broad-Based Black Economic
Empowerment legislation. In addition, the Group has its
Modern Slavery Act Statement, which can be found on our
website (www.norcros.com) and a supporting policy.
Tax transparency
We are committed to trading within the law and conducting
all our business activities in an honest and ethical manner.
Our Tax Policy governs all our business dealings and the
conduct of all persons or organisations that are appointed to
act on our behalf. We have a zero-tolerance approach to all
forms of tax evasion, whether under UK law or under the law
of any foreign country.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202466
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PEOPLE CONTINUED
We work closely with our key
stakeholders and invest in research
and development to ensure our
products perform to the highest
standards whilst creating a
competitive advantage for our
customers to help them achieve
their sustainability goals.
RELEVANT SDGs
INNOVATIVE AND EFFICIENT
PRODUCTS
PRODUCT QUALITY
AND SAFETY
SUPPLY CHAIN MANAGEMENT
Key areas and commitments
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 67
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PRODUCT
New product development is a key growth driver for our
business. We invest in our in-house design and product
engineering teams to take a design-led approach to product
development. We focus on fashionable, ergonomic and
sustainable designs and great sourcing. We also work across
our Group to develop ranges where we match colours on
different products (for example, matching the finish colours on
brassware and shower enclosures). We also aim to improve the
material efficiency of our products and production processes.
We measure our performance through a new product vitality
index, the proportion of revenue over the last 12 months from
products launched in the last three years. The vitality rate in
the year was 22%, slightly lower than prior year, primarily due
to delays in launching VADO’s new Cameo collection, which
launched for sale in April 2024.
We are also focused on developing more sustainable products
for our portfolio. This year, we have started to develop a
Sustainable Products Framework that will allow us to define
and measure the sustainability of our products consistently.
We are continuing to develop this framework and supporting
methodology through the current year and we expect to
publish the framework later in the year. This is a key driver
for our Group as it will enable us to systematically focus our
investment on sustainable products. We will then provide our
customers with an increasing number of environmentally-
beneficial products that are energy efficient, easily recyclable
and durable in order to increase their longevity. This reduces
the lifetime environmental impact as there is a reduced need
for maintenance and replacement of products.
We continue to develop innovative solutions and we are
always reviewing new products and technologies that align
to customer and market demands, as well as investing in
research and development to stay ahead of our competitors.
Sustainable design is embedded within our overall product
development, and we already have an established set of
products within our portfolio that are specifically designed
with sustainability in mind, such as Triton’s ENVi
®
shower.
Our ambition: Drive growth through high-quality,
design-led and sustainable products
INNOVATIVE AND EFFICIENT PRODUCTS
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202468
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PRODUCT CONTINUED
Our ambition: Design, manufacture and/or supply
high-quality and safe products
PRODUCT QUALITY AND SAFETY
We are committed to designing, manufacturing and supplying
products that are reliable and safe to use. All our products
are tested to ensure that they meet safety requirements in the
countries in which they are sold, and information about safe
use and disposal of Norcros products is provided through
warning labels, manuals and other documentation where this
is appropriate.
Eight of our brands, covering 76% of turnover, are externally
certified to the Quality Management ISO 9001 standard.
Through the implementation of this standard, we improve our
customer experience and satisfaction. It also aims to improve
our internal systems so we can produce quality services and
products whilst promoting a culture that is aimed towards
growth and continuous improvement.
As part of the brands’ ISO 9001 compliance, testing is carried
out to ensure safe and quality products. Testing electric
products includes electrical safety test to the BS 60335
standard and air decay tests to identify leaking assemblies. In
addition to testing, all areas of quality are monitored including
supplier performance, product performance, internal audits
and warranty activity. We pride ourselves on designing safe
and high-quality products. Less than 0.5% of our products
have been recalled due to poor quality, and less than 0.001%
of products have been recalled due to safety issues.
% OF TURNOVER EXTERNALLY CERTIFIED TO THE
QUALITY MANAGEMENT ISO 9001 STANDARD
76%
PRODUCTS BEING RECALLED
DUE TO POOR QUALITY
<0.5%
PRODUCTS BEING RECALLED
DUE TO SAFETY ISSUES
<0.001%
Grant Westfield’s Naturepanel
Grant Westfield is proud to have obtained an Environmental
Product Declaration (EPD) Certificate for their Naturepanel
collection.
The EPD covers environmental impacts from cradle to
grave and has been independently verified by EPD Hub in
accordance with ISO 14025. The EPD certification enables
suppliers to compare the impacts of materials at the
product selection stage, ensuring that the most sustainable
options are selected. The process required Grant Westfield
to complete a full life cycle analysis of its Naturepanel
collection, including raw materials, energy, transportation,
use and disposal. Naturepanel is also FSC certified and
100% recyclable.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 69
STRATEGIC REPORT
Triton’s ENVi
®
shower
This year Triton launched their most ambitious product to
date – the ENVi
®
electric shower.
Designed with style and sustainability in mind, ENVi
®
features a number of key functions that bring sustainable
showering to users far more easily.
An integrated usage calculator tracks how much water
and energy each shower uses, and estimates a cost per
shower based on this information. Allowing people to see
their usage helps them make informed decisions about
the amount of time they spend in the shower, helping
each of us to reduce our impact, both in our wallets, and
on the planet.
What’s more, ENVi
®
features a built-in timer and
Eco-Mode, reducing shower time by one minute to
encourage users to speed up and get clean, saving
water and energy in the process.
Finally, ENVi
®
is Climate Partner Certified, meaning Triton,
with Climate Partner’s support, calculated the full life cycle
of the product, from cradle to grave, and have set and
implemented reduction measures.
70%
UP TO 70% LOWER CO
2
EMISSIONS
1
THAN A
MIXER SHOWER CONNECTED TO AN A-RATED
COMBI BOILER
1
Calculated based on 3-person household, 5 showers pppw, 7.5 min average
duration at 41°C
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202470
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PRODUCT CONTINUED
VADO’s Cameo collection
VADO launched its most significant new product
range earlier this year: the Cameo collection.
The Cameo collection encompasses a wealth of
product variety including brassware, bathroom
furniture, ceramic and mineral basins, illuminated
mirrors and accessories. Designed with meticulous
attention to detail, each element in the collection has
been formed to work harmoniously together, ensuring
a cohesive and luxurious aesthetic throughout the
entire bathroom. The collection is characterised by an
echoed soft square design that delivers a premium
finish and exudes contemporary style.
The Cameo collection has already been recognised
by KBB Review magazine due to its innovative design
appeal and ability to create a multitude of looks from
one range.
Available in four brassware finishes and five furniture
colourways, the product team collaborated closely
with Merlyn throughout the design process to ensure
the finishes were designed to coordinate with Merlyn
products wherever possible, making it easier for
our customers to meet all their bathroom needs in
one place.
Case Study
Abode’s Scandi-X tap
Abode’s Scandi-X tap product is engineered with
safety and quality at its core and designed for energy
and water savings.
Featuring a two-stage safety handle, users can access
filtered cold and steaming hot water without the need
for a safety lock. To dispense steaming hot water, users
simply push the lever down and then pull it forwards,
whilst filtered water is accessed by pushing the lever
backwards. The tap is equipped with the PROBOIL.2X,
the next generation in intelligent hot water boilers,
ensuring fast and trouble-free delivery of steaming
hot filtered water at the touch of a handle. Cool touch
technology located inside the tap creates a barrier
between the flow of steaming hot water and surface
of the spout so it’s always cool to touch.
Featuring a flow limitation system, it provides aerated
hot and cold water with optional 5l/m flow limitation,
effectively minimising sink splashback and reducing
overall water consumption. The tap is equipped with a
cold start valve, significantly reducing energy wastage
by ensuring that the tap only dispenses hot water
when necessary.
Designed with 4-in-1 functionality, the tap allows
users to access filtered cold drinking water directly,
reducing the need for single-use plastic in the home.
Additionally, Abode offers a free Filter Recycle
Scheme, enabling users to return expired filters via
Royal Mail, promoting both a cost-effective and
environmentally friendly solution.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 71
STRATEGIC REPORT
Our ambition: Ensure our supply chain operates in line with our
ESG standards by applying our new Norcros Supply Chain Policy
SUPPLY CHAIN MANAGEMENT
The way our products are sourced has a significant impact on
our environmental and social sustainability. We are committed
to encouraging our suppliers to minimise their environmental
impact and we also expect our suppliers to conduct
themselves in line with Norcros’ Group Supply Chain Policy
and Code of Ethics and Standards of Business Conduct.
This year, we formalised our Group Supply Chain Policy. This
policy outlines our expectations of our suppliers in relation
to environmental and social issues such as climate change,
water consumption, bribery, and health and safety amongst
others. We have established our Supply Chain Policy to
drive continuous improvement and environmental and
social standards across our supply chain. Our aim is that our
suppliers, and importantly our key suppliers, work towards the
same ambitions and goals as our ESG strategy.
Our new policy has established formal mechanisms for
compliance with our Safety, Environmental, and Human
Rights policies by our suppliers. The policy, in tandem with
our Supplier Assessment Form, will allow us to monitor
suppliers’ performance on a regular basis. Where a supplier
does not currently adequately meet the standards set out in
this policy, we will ask the supplier to put in place reasonable
improvement plans.
We plan to continue our discussions around the development
of internal and external KPIs associated with our supply chain
in the rest of 2024.
We do not accept and will not tolerate the use of
child labour or forced labour (i.e. modern slavery)
anywhere in our own business or supply chain.
We have issued a public statement to this
effect, which can be found on our website at
www.norcros.com. We also encourage our direct
suppliers to promote human rights throughout the
supply chain. Our supplier assessments include
evaluation of policies and practices in this area.
72
STRATEGIC REPORT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024
OUR SUSTAINABILITY STRATEGY
PRODUCT CONTINUED
VADO’s supplier engagement
VADO collaborates closely with their suppliers to ensure fair treatment,
generous pay and excellent working conditions for all workers. Both new
and existing suppliers must sign a code of conduct and complete an annual
amfori BSCI social audit, with VADO expecting all suppliers to achieve at
least a B rating. Additionally, VADO has a dedicated team that regularly
visits suppliers to ensure high product standards and adherence to the code
of conduct.
VADO met with all its major suppliers this year to discuss emissions reduction
targets and how its suppliers can help achieve the targets. Suppliers are
sharing individual product level material data, which will allow more accurate
emissions reporting and help identify opportunities to collaborate with the
suppliers to make meaningful reductions to emissions. This initiative will
contribute towards both VADO and the Group’s emissions reductions in the
goods and services they are purchasing from suppliers.
Triton’s supplier engagement
Triton recognises the role it needs to play in
collaborating with its supply chain partners to
influence the full up-and-downstream carbon impact,
and are working to give them focus and support so
they can join its carbon reduction journey. In the last
two years, Triton have carried out detailed supplier
audits covering all areas of quality, health and safety,
and environmental systems and practises, as well as
desktop audits covering energy and water usage.
In 2023, Triton partnered with Contingent, an expert
in the field of sustainable supply chains. With
Contingent’s support, Triton launched its Sustainability
Operating System (SOS) to key suppliers. This
engagement provides expert knowledge and an
operating model that tracks actions and benefits, and
provides Triton with a single view on all supply chain
sustainability activity.
By working together this way, Triton are helping its
partners take key steps towards their own carbon
reduction journeys, whilst they help Triton on its net
zero journey.
Case Study
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 73
STRATEGIC REPORT
We are committed to minimising
the environmental impact of our
operations, products and services
wherever possible. We are working
to improve our business and suppliers
in a way that supports the future
of our planet and local communities.
CLIMATE CHANGE AND
EMISSIONS
CIRCULAR ECONOMY
SOCIAL AND COMMUNITY
ENGAGEMENT
Key areas and commitments
RELEVANT SDGs
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202474
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET
Our environmental goals:
1
Net zero by 2040
2
Reduce energy use
at our sites
3
Increase proportion
of electricity from
renewable sources
4
Minimise toxic
emissions
Making progress in improving our energy efficiency and
reducing carbon emissions is important for our customers,
staff and stakeholders. At this stage, our initiatives are
delivered within our brands and include action in the
following key areas:
Managing environmental
performance
Our individual brands track and monitor their environmental
impacts. The main vehicles for compliance and improvement
across sites are our environmental management systems.
Eight of our businesses, covering 76% of turnover, are
certified to the Environmental Management ISO 14001
standard and our businesses report regularly on any
environmental issues that arise. Amongst other issues,
our ISO 14001 certified management system includes our
handling of waste and hazardous materials. The Group
has not had any environmental fines in the last 12 months
(2023: none).
ISO 14001 COVERAGE
76%
Energy management and greenhouse
gas emissions
Climate change is one of the biggest challenges of our
time and the transition to a low carbon economy has the
potential to significantly impact our business, as well as our
clients and suppliers. We aim to minimise our impact on
climate change by reducing our carbon emissions across all
operations. We engaged with external advisors, CEN-ESG,
to undertake a review of our carbon management practices
in each of our brands. The findings of this review helped us
determine the carbon hotspots in our operations and develop
brand-level carbon reduction roadmaps, which supported
the development of a Group Net Zero Transition Plan and
emissions reductions in line with our reduction targets.
Our ambition: A sustainable business, reducing our impact
on the environment
CLIMATE CHANGE AND EMISSIONS
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 75
STRATEGIC REPORT
Energy efficiency initiatives
We have a range of initiatives underway across the Group to
reduce our carbon footprint and energy consumption. Below
are some examples across the Group from the year:
• Croydex has upgraded all but one of its company cars to
electric vehicles and implemented a cycle to work scheme
to incentivise employees to cycle to work as well as
reducing commuting emissions.
• Fifteen of Merlyn’s fleet have been converted to either
hybrid or electric vehicles.
• VADO has fitted two electric car charging points at their
Cheddar site and, in the last year, increased the proportion
of its fleet that is electric from 18% to 50%.
• Triton has replaced their air conditioning units with more
efficient dual heat and cool units, installed four electric
vehicle charging points and upgraded 50% of emergency
lighting to LED.
• Abode has installed two new air conditioning units and
increased the number of hybrid or electric vehicles in
its fleet.
• Norcros South Africa has fitted LED lighting at its new
store in Rustenburg, phased out old, inefficient air
conditioning units, and TAL specifically has improved their
manufacturing equipment’s overall efficiency to 75%, using
less energy to produce the same amount of adhesive.
Carbon emissions
The tables on page 77 have been prepared for the reporting period of 1 April 2023 to 31 March 2024 (referred to
throughout this section as 2024) using the reporting period of 1 April 2022 to 31 March 2023 for comparison (referred
to as 2023). We report on all of the material emission sources in line with an operational control approach method, as
required in Part 7 under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and under
the UK’s Streamlined Energy and Carbon Reporting (SECR) requirements.
Greenhouse gas (GHG) emissions are in CO
2
e, including GHGs in addition to carbon dioxide and include our Group office
and all brands. Scope 1 and 2 data has been calculated from monthly measured data (e.g. fuel and electricity use) using
the appropriate conversion factors in accordance with the principles and requirements of the World Resources Institute
(WRI) GHG Protocol: A Corporate Accounting and Reporting Standard (revised version) and Environmental Reporting
Guidelines: Including Streamlined Energy and Carbon Reporting requirements (March 2019). To calculate scope 1 emissions,
DEFRA 2023 emissions factors have been used. Scope 2 emissions have been calculated using both a location-based and
market-based approach, utilising DEFRA 2023, IEA 2023 or Association of Issuing Bodies (AIB) 2022 residual factors where
appropriate. We have also factored in situations where sites produce their own renewable electricity or purchase electricity
supported by contractual instruments, such as Renewable Energy Guarantee Origin (REGO).
We are reporting our scope 3 emissions with guidance from the GHG Protocol Corporate Value Chain (scope 3) Accounting
and Reporting Standard and the GHG Protocol Technical Guidance for Calculating Scope 3 Emissions, as required.
In line with the Greenhouse Gas Protocol, we continue to review our reporting in light of any changes in business
structure, calculation methodology and the accuracy or availability of data. Due to recognised inherent uncertainties in
calculating scope 3, we have adopted a continuous improvement approach. We will continue to review our processes
and disclose any restatements in a timely and transparent manner.
Absolute market-based scope 1 and 2 emissions decreased
9% and absolute energy consumption decreased 11% year on
year, making us well on track for our scope 1 and 2 emissions
target. This is, in part, due to load shedding issues in South
Africa that have restricted manufacturing at Johnson Tiles
South Africa, as well as the implementation of the energy
efficiency measures discussed above. The Group’s UK brands’
scope 1 and 2 emissions have decreased year on year by
16%, which is principally due to Johnson Tiles UK moving from
two kilns to one for tile manufacturing, which has resulted in
reduced gas consumption. Absolute scope 3 emissions have
increased 6% year on year, principally due to an increase
in category 11 emissions from a change in mix in products
sold, as well as an increase in the carbon intensity of the UK
electricity grid factor used to calculate category 11 emissions.
Overall scope 1, 2 and 3 market-based emissions have
increased 4%.
We report our emissions and energy intensity as tonnes
CO
2
e/£m revenue and kWh/£m revenue. Emissions intensity
has remained the same this year, whilst energy intensity has
decreased 3%.
CLIMATE CHANGE AND EMISSIONS (CONTINUED)
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202476
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
2024 2023
UK
Global
(exc. UK) Group total UK
Global
(exc. UK) Group total
GHG emissions (tCO
2
e)
Total scope 1 (tCO
2
e) 11,701 29,664 41,365 13,898 32,253 46,151
Scope 2 location-based (tCO
2
e) 3,035 21,589 24,624 3,424 22,885 26,309
Scope 2 market-based (tCO
2
e) 238 21,565 21,803 256 22,872 23,128
Total scope 1 & 2 location-based
(tCO
2
e)
14,736 51,253 65,989 17,322 55,138 72,460
Total scope 1 & 2 market-based (tCO
2
e) 11,939 51,229 63,168 14,154 55,125 69,279
Upstream scope 3 (tCO
2
e) – – 216,489 – – 245,478
Downstream scope 3 (tCO
2
e) – – 631,381 – – 557,741
Total scope 3 (tCO
2
e) – – 847,870 – – 803,219
Total scope 1, 2 & 3 location-based
(tCO
2
e)
– – 913,859 – – 875,679
Total scope 1, 2 & 3 market-based
(tCO
2
e)
– – 911,038 – – 872,498
Scope 1 & 2 GHG emissions intensity ratio
(per Group turnover) £m
– – 162 – – 162
Energy consumption (kWh)
Total renewable fuels
consumption (kWh)
– – –
– – –
Diesel 4,606,615 3,707,776 8,314,391 4,401,649 4,190,959 8,592,608
Petrol 738,614 187,318 925,932 940,479 158,429 1,098,908
Lubricants 125 – 125 – – –
Fuel oil 12,847 – 12,847 289,511 – 289,511
Natural gas 56,333,911 156,646,259 212,980,170 71,142,461 170,474,133 241,616,594
LPG 471,592 – 471,592 520,201 – 520,201
Total non-renewable fuels
consumption (kWh)
62,163,704 160,541,353 222,705,057 77,294,301 174,823,521 252,117,822
Total fuels consumption (kWh) 62,163,704 160,541,353 222,705,057 77,294,301 174,823,521 252,117,822
Consumption of purchased or acquired
electricity renewable
14,049,635 85,234 14,134,869 16,474,873 52,629 16,527,502
Consumption of self-generated non-fuel
renewable energy (solar)
69,061 – 69,061 36,788 – 36,788
Consumption of purchased or acquired
electricity non-renewable
660,194 24,026,661 24,686,855 1,188,498 25,565,331 26,753,829
Total electricity consumption (kWh) 14,778,890 24,111,895 38,890,785 17,700,159 25,617,960 43,318,119
Total renewable energy
consumption (kWh)
14,118,696 85,234 14,203,930 16,511,661 52,629 16,564,290
Total non-renewable energy
consumption (kWh)
62,823,898 184,568,014 247,391,912 78,482,800 200,388,851 278,871,651
Total energy consumption (kWh) 76,942,594 184,653,248 261,595,842 94,994,461 200,441,480 295,435,941
% renewable electricity from total
electricity
96% 0% 37% 93% 0% 38%
% grid electricity from total electricity 100% 100% 100% 100% 100% 100%
Energy intensity ratio
(per Group turnover) £m
– – 669,557 – – 692,374
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 77
STRATEGIC REPORT
CLIMATE CHANGE AND EMISSIONS (CONTINUED)
Scope 3 emissions
Our scope 3 emissions have been calculated using the same
methodology as last year, whilst also incorporating more
granular data to improve the accuracy of calculations. Our
evaluation confirmed, again, that our value chain emissions
are significantly greater than our operational carbon
footprint, with our scope 3 emissions accounting for 93% of
our total emissions.
We calculated all applicable scope 3 categories for our
carbon footprint, with five categories not applicable to our
business. The calculation of emissions for our key scope 3
sources includes:
• Use of sold products – we calculate the lifetime energy
use for representative products of our key product ranges
using our annual sales volume, average power use per
product and estimated hours in use over life. Emissions
factors for our key sales regions are applied to this data.
• Purchased goods and services – we use purchase data
by quantity or number of raw materials or components
and apply life cycle assessment based emissions
factors directly against our purchase data or against
representative raw materials within each component
category. Spend-based analysis is used for any services.
We include no primary data from suppliers.
• Upstream transportation and distribution – all inbound,
intra-Group and outbound logistics the Group pays for
are mapped against the transportation mode, weight and
distance travelled to calculate emissions on a wheel-to-
well basis.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202478
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
Category Status 2024 tCO
2
e 2023 tCO
2
e
1. Purchased goods and services
Relevant, calculated
178,333
200,971
2. Capital goods
Relevant, calculated
1,510
1,502
3. Fuel and energy-related activities
Relevant, calculated
13,040
16,587
4. Upstream transportation and distribution
Relevant, calculated
19,019
22,168
5. Waste generated in operations
Relevant, calculated
180
264
6. Business travel
Relevant, calculated
2,207
1,661
7. Employee commuting
Relevant, calculated
2,200
2,306
8. Upstream leased assets
Not relevant, not applicable
–
17
Upstream emissions 216,489
245,478
9. Downstream transportation and distribution
Relevant, calculated
6,564
7,747
10. Processing of sold products
Not relevant, not applicable
–
–
11. Use of sold products
Relevant, calculated
623,116
548,553
12. End-of-life treatment of sold products
Relevant, calculated
1,701
1,440
13. Downstream leased assets
Not relevant, not applicable
–
–
14. Franchises
Not relevant, not applicable
–
–
15. Investments
Not relevant, not applicable
–
–
Downstream emissions 631,381
557,741
Total scope 3 847,870
803,219
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 79
STRATEGIC REPORT
2024 2028
OUR EMISSIONS TARGETS
AND NET ZERO PLAN
Recognising the urgent need to address climate change and reduce
greenhouse gas emissions, we have developed ambitious net zero
targets and a high-level decarbonisation pathway to manage our value
chain emissions going forward. This aligns with our strategy of using
ESG to drive our competitive advantage.
Targets
We have set science-based targets across scopes 1, 2 and 3, which affirm our long-term commitment to net zero by 2040,
and we have introduced interim targets for 2028. Our targets were validated by the Science Based Targets Initiative (SBTi)
in January 2024 and they provide a path for significant reduction in our emissions by 2028 and beyond.
By 2028, we have set the following targets:
• Reduce absolute scopes 1 and 2 GHG emissions by 33.6% (2023 base year)
• Reduce absolute scope 3 GHG emissions by 20.0% (2023 base year)
By 2040, our target is to reach net zero GHG emissions across the value chain.
Our targets were validated
by the Science Based Targets
initiative
Base year (2023)
scope 1 and 2 =
69,278
Base year (2023)
scope 3 =
803,219
Reduce absolute scopes 1 and 2
GHG emissions by
33.6%
(2023 base year)
Reduce absolute scopes 3
GHG emissions by
20.0%
(2023 base year)
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202480
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
2040
Business model implications
As the UK and Ireland’s number one bathroom products
group and a leading supplier of bathroom and kitchen
products in our geographical markets, our business model
already integrates certain emissions-reduction activities
and products with sustainable attributes, and we will be
increasing our focus on these areas to align our business
and our products with a net zero world.
In developing our near-term decarbonisation plan for
scope 1 and 2, we assumed no material changes in our
business model, locations or asset footprint or value chain
impacts. Our belief is that we can make the necessary
emissions reduction to our operations within a business-
as-usual environment, utilising typical replacement cycles
or initiatives that do not incur material capital expenditure
or operational disruption. Beyond our near-term target
date of 2028, we are reliant on the development of new
technologies to reduce operational emissions to zero, in
particular in the production of ceramic tiles (where we
manufacture tiles in South Africa). In order to meet our
emissions reduction targets, we will need to transition to
lower carbon intensive fuels for our kilns, such as biogas,
hydrogen or electricity. Technologies utilising these fuels are
under development or not currently commercially available
and, in the meantime, we will focus on improving the
efficiency of the firing process.
Our near-term targets for scope 3 emissions are also not
predicated on any major shift in strategy. We anticipate
taking steps to move our product portfolio towards the
incorporation of lower embedded carbon materials and
to improved operating efficiency in use. This year, we have
started to develop a Sustainable Products Framework
that enables us to classify our products against their
sustainability attributes. This methodology will allow us
to monitor and shift our revenue exposure to sustainable
products over time.
Whilst we will need to increase and improve our supply
chain engagement, we already engage with many of our
suppliers to determine the embodied carbon for certain
raw materials and work together to “design out” carbon
products and processes. We will continue to roll out this
approach to an increased number of suppliers.
We are committed to identifying and actioning every
available opportunity to achieve our targets. We created a
high-level net zero plan that would take us to our near-
term and long-term net zero 2040 target based on our full
value chain carbon footprint for 2023. Our top-down Group
targets were then translated into targets for each of our
brands, incorporating the particular emissions exposures
and drivers of the brands. Our brands have responded by
assessing and collating bottom-up initiatives for scopes 1,
2 and 3 emissions reduction. These initiatives are recorded
centrally and provide a register of planned milestones by
brand, which are tracked quarterly at the ESG Forum.
NET ZERO GHG
EMISSIONS
ACROSS THE
VALUE CHAIN
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 81
STRATEGIC REPORT
CLIMATE CHANGE AND EMISSIONS (CONTINUED)
Scope 1 and 2 planned reductions
Our plan – scope 1 and 2 emissions
Scope 1
The majority of our scope 1 emissions relate to natural gas
used in the kilns of our tile manufacturing businesses in
both UK and South Africa. In the near-term we are focusing
on operational improvements such as heat recovery systems
and retrofitting energy efficient burners to kilns. In the UK,
we have also recently consolidated to one kiln to fire our
tiles, which results in less energy used in the production
process. At the start of the financial year ending March
2025, we announced the sale of Johnson Tiles UK, which
will lead to a significant reduction in the Group’s scope 1
emissions in 2025 as Johnson Tiles UK currently accounts
for around 24% of our scope 1 emissions.
Additionally, we are planning to decarbonise our vehicle
fleet by replacing traditional internal combustion engine
vehicles with electric or hybrid vehicles. Several of our
brands have already increased the number of electric
vehicles in their fleet and installed electric vehicle chargers
on their sites. Triton, Merlyn and Grant Westfield have each
set targets to make their entire fleets electric.
In the longer term, we will monitor technology development
around kiln technologies such as electric, biogas or
hydrogen kilns for our Johnson Tiles South Africa
manufacturing facility. The Group will continue to support
and contribute towards similar initiatives to provide us with
options on transiting our kilns away from natural gas in the
longer term.
Scope 2
The most significant reduction in our scope 2 emissions will
come from switching to renewable electricity supply, either
through on-site renewables (e.g. rooftop solar installation
at our main South African production site, and possibly Tile
Africa and House of Plumbing sites) or securing purchased
renewable electricity supply. The renewable energy
market in South Africa is less mature than the UK market
and therefore there is less availability, so we expect the
transition to be slower for our South African brands.
We also expect grid decarbonisation to play a significant
role in meeting our scope 2 targets, especially in the
long term – although, again, we expect the UK grid to
decarbonise faster than the South African grid. We will also
investigate the use of Energy Attribution Certificates (e.g.
RECs and REGOs) to reduce our market-based scope 2
emissions, although these are not central to us reaching our
near-term targets.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Tonnes CO
2
e
2028
Target
46,001
2028
Emissions
43,384
VOC
reduction
-400
Renewable
energy
installation
-15,411
REGOs
-196
Fleet
infrastructure
-366
Energy
efficiency
-9,521
Scope 1 and 2
baseline
69,278
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202482
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
Scope 3 planned reductions
Tonnes CO
2
e
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2028
Target
642,575
2028
Emissions
640,541
Waste
reductions
-12
Upstream
scope 3
-5,661
Product
sustainability
-6,562
Downstream
scope 3
-149,943
Data collection/
reporting
-500
Scope 3
baseline
803,219
Our plan – scope 3
Purchased goods and services account for 21% of our total
emissions footprint and represent the embedded carbon
within the raw materials and purchased items we procure.
In the near term, we are looking to design products that are
more easily recyclable and have lower embedded carbon,
whilst also engaging with our suppliers to provide materials
with a lower carbon impact.
Given our products’ use-phase emissions exposure, the
single biggest factor in our ability to hit our near-term
scope 3 target and net zero by 2040 target is the pace
of decarbonisation of grids globally, especially in the UK,
which is our main market. We cannot directly influence the
pace of grid decarbonisation and rely on governments to
implement appropriate policies to achieve this. That said,
we are encouraged by the forecasts in the UK’s Future
Energy Scenarios, which see effective decarbonisation
of the UK electricity grid by 2035 in three of the four
modelled outcomes.
Our other main focus of scope 3 emissions reduction is
product innovation and supplier collaboration. Through
product innovation, and in collaboration with our suppliers,
we can influence emissions not only in their use-phase, but
also in embedded emissions in our purchased goods and
end of life. By investigating alternative materials, such as
recycled material or raw materials that have acceptable
technical qualities with lower carbon emissions, reducing
the weight or number of components in our products and
increasing the overall use-phase efficiency of our products,
we can reduce both the upstream and downstream impacts
of our product range, including the associated packaging.
We are also looking into use-phase optimisation of certain
products, such as Triton’s electric showers, by designing and
manufacturing showering products to reduce the carbon
footprint during use.
Most of our products are shipped by sea or by road. We
are reviewing how we package and ship our products to
look for opportunities for reducing the overall emissions
footprint associated with logistics. We have factored in
conservative assumptions on the decarbonisation of global
transportation, which will drive the decarbonisation of
logistics, business travel and employee commuting.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 83
STRATEGIC REPORT
Air emissions management
Air emissions are an important part of Johnson Tiles UK
and South Africa’s tile manufacturing process. This will
no longer be a factor in the UK following the disposal of
Johnson Tiles UK in May 2024.
Air emissions originate principally from our kilns and
dryers, and we have implemented methods to control our
emissions such as wet scrubbers and baghouse filters. Air
emissions are monitored internally, as well as all process
emissions being monitored and verified by a third party
on an annual basis to ensure our measurement methods
are in compliance with our operating permits. Johnson
Tiles South Africa also undergoes an Annual Emissions
License audit to demonstrate that its processes and
applications are operated in accordance with South
African air quality regulations and to reduce any potential
negative impacts on community health and the wider
environment.
Ceramic tile manufacture produces less toxic emissions
than other building materials. Both our South African and
UK brands have consistently met the targets required for
our permits in particulate matter and hydrogen fluoride
measured for our kilns and spray dryers. These are
monitored and independently measured at least annually.
Johnson Tiles UK operates at around 10–20% of its target
limit. This demonstrates our track record of meeting toxic
emissions targets and we aim to maintain our levels of
particulate matter and hydrogen fluoride below legal limits.
CLIMATE CHANGE AND EMISSIONS (CONTINUED)
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202484
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
CIRCULAR ECONOMY
We understand how rising demands on natural resources
pose an increasing threat to economic growth and
environmental stability. Across the Group, we aim to utilise
resources as efficiently as possible to design out waste and
extend product lifetimes.
Although we are at the start of our circular economy journey,
we are starting to embed decisions that impact circularity into
the way we operate and design our products. For example,
Triton subscribes to the Distributor Takeback Scheme, which
facilitates return of product from direct purchasers, to avoid
Waste Electrical and Electronic Equipment (WEEE) ending up
in the household waste stream. Abode’s products are also all
specifically designed to be serviceable rather than replaceable.
Triton’s recycled plastic
Triton identified that a significant proportion of their scope
3 category 1 carbon emissions are linked to plastic used
within their products, and ABS (a type of engineering
plastic used in consumer products) in particular.
After researching alternatives, they decided to change
to using 50% recycled content ABS within the backplate,
a key component of their showers, as it was one of the
largest contributors to the ABS carbon footprint. Trials were
undertaken on products manufactured in black finish, given
this was likely to be the most tolerant to potential changes
with the aesthetic properties of the material due to the
recycled content.
Following successful trials, this has now been implemented
across all appropriate models and it is anticipated this
change will help reduce Triton’s carbon footprint by around
12–15 tonnes CO
2
e during the coming year. Research into
an appropriate white recycled ABS material is accelerating
at pace, which would have a far greater impact on
footprint reduction – estimated at potentially 120+ tonnes
CO
2
e per year.
Triton’s ambitions don’t stop there. As part of the remit
of Triton’s newly-implemented circularity department,
investigations to utilise plastic material recovered from
returned products directly into new products (as recycled
content) are also underway. This would be a great
step toward achieving true circular economy in action
when implemented.
Case Study
Our ambition: Make the most efficient use of material resources across our Group
• Minimise waste to landfill and increase recycled waste
• Reduce water use at our sites
• Operate at or work towards Environmental Management standard ISO 14001
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 85
STRATEGIC REPORT
Water
Water efficiency is an increasingly important issue for us.
This includes, where possible, reducing the amount of water
we use in all our operations and designing products that
help our customers reduce the amount of water used for
their domestic or commercial purposes. For example, Triton
has implemented a continued program of total preventative
maintenance to prevent water loss, including inspection of
welfare facilities and pipework throughout the site and the
installation of shut-off valves on the central heating system to
detect and prevent leaks.
Water withdrawal
Water withdrawn (m
3
) 2024 2023
UK 34,677
46,054
SA 143,762
149,212
Total 178,439
195,266
Intensity ratio m
3
per £m revenue
456.7
457.6
Water consumption
Water consumption (m
3
) 2024 2023
UK 28,247
37,623
SA 115,963
98,242
Total 144,210
135,865
Intensity ratio m
3
per £m revenue
369.1
318.4
The tables above outline water withdrawal and consumption
for all of our brands. Both our UK water withdrawal and
consumption have decreased 25% year on year, which
reflects our efforts to use water more efficiently. The Group’s
overall water withdrawal has reduced 9%, whilst water
consumption has increased 6%.
Waste management
Reducing packaging and increasing the amount of recycling
are important goals for all our brands from an operational,
commercial and environmental perspective. Various initiatives
aimed at reducing waste sent to landfill and encouraging
recycling are in place such as on-site segregated recycling
bins. Waste is also monitored through biannual ISO 14001
audits, which helps our certified brands minimise their
hazardous and non-hazardous waste generation.
We encourage our brands to procure packaging that is
made from recycled materials or can easily be recycled.
As a Group, 40% of packaging that has been used is from
recycled materials.
Waste generation
Waste generation (tonnes) 2024 2023
Hazardous waste 6
21
Non-hazardous waste 12,691
15,635
Total waste 12,697
15,656
Waste treatment and disposal
Waste treatment/disposal
(tonnes) 2024 2023
Hazardous waste recycled 3
1
Hazardous waste
incinerated
2
0.18
Hazardous waste sent to
landfill
1
20
Non-hazardous waste
recycled
2,927
3,149
Non-hazardous waste
incinerated
50
122
Non-hazardous waste sent
to landfill
9,714
12,364
Total waste recycled 2,930
3,150
Total waste incinerated 52
122
Total waste sent to landfill 9,715
12,384
Total waste non-recycled 9,767
12,506
Total waste 12,697
15,656
The tables above outline waste generation and treatment
across all of our brands. Total waste generated has decreased
19% year on year, which is a result of the Group’s lower
manufacturing output across both South Africa and UK brands.
CIRCULAR ECONOMY (CONTINUED)
Norcros South Africa
recycling initiatives
Norcros South Africa has reduced their skip waste
disposal costs by 32% in 2024 by recycling all possible
plastics cardboard and paper. Broken tiles have also
been sold instead of going straight to landfill, which
has also reduced waste to skips. In addition, all Tile
Africa stores were trained and are required to recycle
any possible recyclable materials such as plastics,
cardboard or paper.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202486
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
Community partnerships
Our commitment to the society in which we operate is deep. All our brands have programs of social engagement, including many
charitable activities, and will have a positive impact on the local communities in which they operate. We empower our businesses
to support local charities and community projects, and provide local employment. Given our decentralised structure, brands
within the Group are encouraged to become involved in and support local initiatives where possible. The Executive Management
of the Group supports this commitment to our society and reviews each brand’s activities monthly.
Our ambition: To engage and support the communities in
which we work
SOCIAL AND COMMUNITY ENGAGEMENT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 87
STRATEGIC REPORT
Norcros South Africa
Norcros South Africa has partnered with the
Department of Education to build toilet facilities for
schools in rural areas who have previously relied on
unsafe and unsanitary pit latrines. When a school
is chosen, we provide the materials, construction
labour and ongoing maintenance. Over the course
of the partnership to date, over 1,200 students have
benefited as four facilities were completed and major
renovations were done on an additional four schools.
COMMUNITY ENGAGEMENT
CASE STUDIES
VADO
VADO actively supported the local community by
creating a reverse advent calendar initiative for a
nearby food bank. Through this effort, the team
contributed essential items daily throughout the festive
period, providing meaningful support to those in need
within our community. This initiative reflects VADO’s
commitment to making a positive impact beyond the
business operations, embodying values of compassion
and community engagement.
Triton
Triton work with the Canal & River Trust to help clean
up their local canal; in 2024, Triton completed three
cleanups. In one visit, the team rode on a barge to
catch any litter they could find in the water along the
way. Along with many bottles, cans and wrappers, the
team also managed to retrieve a discarded mattress
and sofa, eventually filling a whole truck of waste.
SOCIAL AND COMMUNITY ENGAGEMENT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202488
STRATEGIC REPORT
OUR SUSTAINABILITY STRATEGY
PLANET CONTINUED
Abode
Abode’s charity partner is
Bluebell Wood Children’s
Hospice, which offers support
and palliative care to families
who have a child or young adult
with a shortened life expectancy
and complex medical needs.
Through various fundraising
events such as coffee mornings,
sponsored runs and raffles,
Abode has donated more than
£3,000 to the charity.
Tile Africa
Tile Africa participates in the Youth
Employment Services Program, offering
meaningful job opportunities to young
people for a period of 12 months in order
to gain meaningful work experience
that can assist them in the quest for
employment. In the first three years
of the program, 200 young people
were employed and 49 have taken
on permanent employment following
completion of the program.
Croydex
Croydex support the Rainy Day
Trust, a charity supporting the home
improvement workforce and their
families in times of need. For the last
two years, Croydex has taken part in
the Mad March Million challenge, where
teams work together to raise funds and
complete one million steps in the month
of March. Along with other fundraising
initiatives, Croydex has donated over
£2,000 to the Trust over the past
two years.
House of Plumbing
House of Plumbing – Members of the Women in Plumbing program
are on a mission to help end period poverty whilst educating high
schoolers about trade qualifications and apprenticeships. The
team has donated over 3,000 sanitary pads across six schools.
The Women in Plumbing program aims to create opportunities
for women in a male-dominated field whilst encouraging existing
parties to accommodate women financially, systematically and in
the working environment.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 89
STRATEGIC REPORT
Introduction
This year we have made excellent progress in the
Group’s management of climate change. We have
further developed our environmental, social and
governance (ESG) strategy with the publication of
our Net Zero Transition Plan and the development
of a new Sustainable Products Framework. We
continue to enhance our environmental data
collection, collecting data on sustainable home
products and reporting with a higher level of
granularity through our ESG Forum. Last year,
we set net zero targets and this year we built out
our Net Zero Transition Plan (including a high
level decarbonisation profile for the Group),
which has been validated by the Science Based
Targets initiative (SBTi) and is in line with the Paris
Agreement for 1.5
o
C for our operational emissions.
Our targets reaffirm the Group’s ambition for net
zero across the value chain by 2040 and provide
ambitious near-term targets for the Group.
We recognise that climate change poses significant risks
and opportunities to our business and stakeholders. Our
TCFD Report demonstrates we incorporate climate-related
risks and opportunities into the Group’s risk management,
strategic planning and decision-making processes, aligned to
our net zero ambition. We continue to monitor our exposure
to natural hazards such as heat stress, fire weather stress,
flood risk, storms and drought with a detailed bottom-up site
analysis using a geospatial climate hazard mapping tool, and
monitor our transition risks from a top-down perspective.
In line with the requirements of the Companies (Strategic
Report) (Climate-related Financial Disclosure) Regulations
2022 and Listing Rule LR9.8.6R(8), the following pages
set our compliance with all of the Task Force on Climate-
related Financial Disclosures (TCFD) recommendations and
recommended disclosures, as detailed in “Recommendations
of the Task Force on Climate-related Financial Disclosures”
(2017) and the additional guidance as set out in the TCFD
2021 Annex “Implementing the Recommendations of the Task
Force on Climate-related Financial Disclosures” (TCFD Annex).
Additionally, the Group has complied with the requirements
of sections 414CA and 414CB of the Companies Act 2006 by
including certain non-financial information within the TCFD
Report. The Group has indicated in the following table which
of the climate-related disclosures are addressed by the TCFD-
recommended disclosures, alongside the pages where these
are located.
We consider our disclosure to be consistent and compliant
with all 11 of the TCFD recommendations.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202490
STRATEGIC REPORT
TCFD
TCFD recommendations reporting
Recommendation Recommended disclosures Reference
GOVERNANCE
Disclose the organisation’s
governance around climate-related
risks and opportunities.
a) Describe the Board’s oversight of climate-related risks
and opportunities.
Page 92
b) Describe management’s role in assessing and managing
climate-related risks and opportunities.
Page 93
CLIMATE-RELATED RISK
MANAGEMENT
Disclose how the organisation
identifies, assesses, and manages
climate-related risks.
a) Describe the organisation’s processes for identifying and
assessing climate-related risks.
Page 93
b) Describe the organisation’s processes for managing
climate-related risks.
Page 93
c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall
risk management.
Page 93
STRATEGY
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the organisation’s
businesses, strategy, and financial
planning where such information
is material.
a) Describe the climate-related risks and opportunities the
organisation has identified over the short, medium and long term.
Pages
96 to 105
b) Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy and financial planning.
Pages
96 to 105
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.
Page 95
METRICS AND TARGETS
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks and
opportunities where such information
is material.
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
and risk management process.
Pages
96 to 105
b) Disclose scope 1, scope 2, and, if appropriate, scope 3
greenhouse gas (GHG) emissions, and the related risks.
Page 77
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets.
Page 105
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 91
STRATEGIC REPORT
Board
The Board of Directors oversees and is ultimately accountable
for progress against our Net Zero Transition Plan and
our wider sustainability strategy, as well as reviewing and
managing the climate-related risks and opportunities of the
Group. The Board are kept informed of climate-related matters
through regular scheduled updates at Board meetings with
ESG (including climate change) on the agenda at least twice
a year. The Board monitors and oversees progress of the
Group’s sustainability performance, through the ESG Forum
updates and the Management Information (MI) Framework,
which includes monitoring the Group’s emissions (scopes 1, 2
and 3).
The Audit and Risk Committee supports the Board in ensuring
climate-related issues are integrated into the Group’s risk
management process. Climate-related risk assessments are
conducted twice a year and are fully incorporated into the
Group’s principal risk process. Materially significant risks,
including climate-related risks, that fall outside risk appetite
levels need to be reviewed and approved by the Board unless
treatment actions can bring them in line with the appropriate
risk appetite level, as outlined below.
Management
As climate-related issues are fundamental to the Group’s
business purpose, the Chief Executive Officer has overall
responsibility for their oversight, ensuring climate-related
issues are considered in the review of Norcros’ strategy,
budget and business. The Chief Executive Officer is also
responsible for reporting on progress to the Board, which is
done at two Board meetings a year. At a management level,
the Group created a sustainability committee (ESG Forum)
in 2022, comprised of representatives from each of the
brands within the Group. The Chief Executive Officer and the
Executive team are informed about climate-related issues on
a quarterly basis by the Corporate Development and Strategy
Director, who reports on the matters discussed at the ESG
Forum. The Group-level net zero targets have been cascaded
to each brand so there is accountability throughout the
organisation. The costs of climate-related initiatives for each
brand are included in their annual budgeting process, with net
zero targets considered during new product development and
associated capital expenditure. The Executive team will review
the carbon reduction plans to deliver the emissions targets in
each brand each year and monitor progress of key milestones
twice a year in the ESG Forum.
ESG Forum
The ESG Forum met monthly in 2023 during the data capture
and strategic development phase, but now convenes
quarterly with one in-person meeting per annum. Led by
the Corporate Development and Strategy Director, these
meetings serve as a platform to track progress on our Net
Zero Transition Plan and, crucially, to exchange ideas,
challenges and best practices across the Group. The ESG
Forum is responsible for assessing and managing climate-
related issues, and reviewing progress against the Group’s
ESG MI Framework, directing action in their respective
brands and feeding back data, achievements and barriers
to be resolved. They promote awareness of, and action on,
sustainability within the Group and promote a consistent
approach to sustainability communication and data and to
meet external disclosure requirements.
Representatives of the ESG Forum are informed by operational
and project teams within their brands. The brands have their
own structures in place to monitor and implement carbon
reduction programs.
With our Net Zero Transition Plan and wider ESG KPIs in
place, we will consider the need for further KPIs and targets
and aligning staff incentives.
GOVERNANCE
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202492
STRATEGIC REPORT
TCFD
CONTINUED
Sustainability metrics
and progress
BOARD
Twice yearly agenda items
EXECUTIVE
MANAGEMENT
(quarterly)
BRAND OPERATIONS
AND PROJECT TEAMS
ESG FORUMS
(UK and SA)
Goals and objectives
ESG risks, and particularly climate-related risks within this,
are classed as a principal risk by the Group. Climate-related
risks and opportunities were assessed and prioritised on the
existing Group five-point risk scoring criteria for both financial
impact and reputation impact (minimal, low, intermediate,
high, severe) and for likelihood (remote, unlikely, possible,
likely, certain).
Overall risk scores are calculated as the multiple of impact
and likelihood. Likelihood is based on the probability of the
risk crystallising and affecting the business at least once
during a three-year period and the longer time horizon
of some climate-related risks is thus reflected in a lower
likelihood score. By using the existing Group risk framework,
climate-related risks are fully integrated into the current
risk management framework and the relative significance
of climate-related risks in relation to other risks can be
determined.
Climate-related transition risks tend to impact the Group
in a top-down manner. These are identified and shortlisted
in collaboration with internal stakeholders and senior
management, in conjunction with the ESG Forum. This
analysis includes a horizon scanning exercise to incorporate
policy and legal risks, and is refreshed annually to include any
changes to the business, external regulatory developments or
operating conditions.
Climate-related physical risks were assessed using a bottom-
up site-level risk assessment using geospatial natural
hazard mapping software, the Munich Re Location Risk
Intelligence Tool.
A summary of key risks in the individual brands and corporate
risk registers is presented to the Audit and Risk Committee
at each meeting. In addition, a Group-level risk review, which
identifies and reviews Group-level strategic risks, is completed
at least annually.
The decision to control or accept risks is partially determined
by the nature of the risk and its scoring. Management
regularly review risk exposure against defined acceptable
risk appetite levels and develop remedial actions, with target
dates, to address risks scoring higher than the accepted
risk appetite level. Except for ‘strategic’, ‘operational’ and
‘commercial’ risks, which carry a medium risk appetite, all
other risk types carry a low-risk appetite. Risks scoring outside
of these risk appetite levels require treatment actions to
bring them in line with the appropriate risk appetite level, or
they need to be reviewed and approved by Board Directors.
Further detail is included in the Risk Management section on
pages 106 and 107.
CLIMATE-RELATED RISK MANAGEMENT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 93
STRATEGIC REPORT
We consider risks and opportunities in all physical and
transition categories outlined in the TCFD guidance risks,
under current and emerging regulatory requirements, and
whether they occur within our own operations, or upstream
and downstream of the Group. In the following tables, we
have identified and expanded on a number of key risks and
opportunities that could have a material financial impact on
the Group.
Climate-related scenario analysis has been used to improve
our understanding of the behaviour of certain risks to
different climate outcomes. The scenario analysis conducted
this year builds on that completed in 2023. The more
ambitious Net Zero Emissions by 2050 (NZE) scenario forms
an input into the 1.5°C pathway used by the SBTi, against
which we are aligned.
For the transition risks and opportunities, we have used the
following climate-related scenarios from the International
Energy Agency, which are far more descriptive and useful for
modelling more positive climate outcomes. Transition risks
are generally greater (more likely and with greater impacts)
in the lower carbon scenario compared to the higher
carbon scenario.
• Net Zero 2050 (NZE)
1
: an ambitious scenario that sets
out a narrow but achievable pathway for the global
energy sector to achieve net zero CO
2
emissions by 2050.
This meets the TCFD requirement of using a “below 2°C”
scenario and is included as it informs the decarbonisation
pathways used by the SBTi, which validates corporate net
zero targets and ambition.
• Stated Policies Scenario (STEPS)
1
: a scenario that
represents the roll forward of already-announced policy
measures. This scenario outlines a combination of
physical and transition risk impacts as temperatures rise
by around 2.5°C by 2100 from pre-industrial levels, with a
50% probability. This scenario is included as it represents
a base case pathway with a trajectory implied by today’s
policy settings.
Physical risks were analysed using three scenarios from
the Intergovernmental Panel on Climate Change (IPCC)
embedded in the Munich Re software platform used to
analyse physical risks of climate change:
• RCP 2.6
2
: a climate-positive pathway, likely to keep global
temperature rise below 2°C by 2100. CO
2
emissions start
declining by 2020 and get to zero by 2100.
• RCP 4.5
2
: an intermediate and probably baseline scenario
more likely than not to result in global temperature rise
between 2°C and 3°C by 2100 with a mean sea level rise
35% higher than that of RCP 2.6. Many plant and animal
species will be unable to adapt to the effects of RCP 4.5
and higher RCPs. Emissions peak around 2040, then
decline.
• RCP 8.5
2
: an extreme scenario where global temperatures
rise between 4.1–4.8°C by 2100. This scenario is included
for its extreme impacts on physical climate risks as the
global response to mitigating climate change is limited.
STRATEGY
Time horizons
The time horizons of where our climate-related risks and opportunities are expected to
first occur are:
Short term:
2024 to 2027
Medium term:
2028 to 2034
Long term:
2035 to 2050
Aligned with our current strategic
planning and incorporates our
planned capital expenditures.
Aligned to where we will most
likely see the impact of regulatory
frameworks such as carbon pricing,
the technology life cycle and our
interim emission reduction targets.
Aligned to the UK Government’s Net
Zero pledge, allowing incorporation
of the useful life of our property
assets, physical and transition risk
time horizons and the Group’s net
zero target.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202494
STRATEGIC REPORT
TCFD
CONTINUED
Climate-related scenario analysis
These scenarios have been supplemented with additional
sources that are specific to each risk to inform any
assumptions included in projections. Our scenario analysis
includes qualitative, and some quantified impacts where
the underlying data is available and where the current
understanding of the risks is robust. We continue to work on
quantifying our risks and opportunities by regularly reviewing
the assumptions and estimates required.
We have analysed the climate-related risks under all our
chosen scenarios and identified plans to mitigate against
the impacts of these risks, as well as take advantage
of opportunities. They have been incorporated into our
transition pathway to net zero and into brand, management
and the Board’s strategic framework within our current
expenditure envelope. We are confident that implementation
of these actions will result in a business resilient to the
discussed climate-related risks and well positioned to
maximise the opportunities identified.
Our view is that significant financial planning or budgetary
change as a result of climate change is not likely to be
required and our emission reduction plan will not incur
material capital expenditure or operational disruption.
1
IEA (2023), Global Energy and Climate Model, IEA, Paris https://iea.blob.
core.windows.net/assets/ff3a195d-762d-4284-8bb5-bd062d260cc5/
GlobalEnergyandClimateModelDocumentation2023.pdf
2
IPCC (2014), Climate Change 2014: AR 5 Synthesis Report. Contribution of Working
Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on
Climate Change
Transition risks and opportunities
Net Zero 2050
(NZE)
Stated Policies
Scenario
(STEPS)
Physical risks
RCP
2.6
RCP
4.5
RCP
8.5
<2°C 2.5°C <2°C 4.1–4.8°C2–3°C
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 95
STRATEGIC REPORT
Five transitional and two physical climate-related risks have been identified that could have a material
impact on our business. Three of them, (i) carbon pricing in our own operations (which, to some
extent, relies on decarbonisation of the UK and South African grids); (ii) carbon pricing in our value
chain (which relies on decarbonisation across supply chain); and (iii) reliance on third parties for new
technology for kilns, are the most material to our operations. Our Net Zero Transition Plan and emissions
reduction initiatives form the basis of our mitigation strategies.
RISKS
Transitional risks
TCFD category: Transition (current and emerging regulation)
Carbon pricing (“carbon tax”) in own operations
The Group operates in multiple jurisdictions, with a focus on
climate change. We view the implementation of operational
carbon pricing as a certainty, which is applied to our gas
and electricity used, particularly in tile manufacturing. We
expect significant but gradual price increases in the medium
term, with greater forecast price rises in the NZE scenario. In
addition, the South African Treasury is considering the use
of fines if companies exceed their approved carbon budgets.
Our exposure to carbon taxes is mitigated by our Net Zero
Transition Plan. We have calculated the costs to the Group
based on International Energy Agency carbon price forecasts
across our short, medium and long-term time frames, and in
the NZE and STEPS scenarios. We assume emissions decline in
line with our Net Zero Transition Plan (scope 1 and 2 emissions
reduce by 33.6% by 2028 (from a 2023 base) and by 90%
by 2040). Our analysis concludes that the impact of carbon
pricing increases over time and is significantly higher under the
NZE scenario.
Mitigation: Key near-term scope 1 actions consist of
improvements in the tile manufacturing processes, like
heat recovery systems and energy efficient burners.
Initiatives to reduce scope 2 include on-site and
purchased renewable electricity. In 2024, the UK tile
operation consolidated to use one kiln to fire tiles,
resulting in significantly less energy used in the production
process. The post-year end announcement of the sale of
Johnson Tiles UK will further reduce the Group’s scope 1
and 2 emissions by circa 15% in 2025.
Business area
Own operations
Time horizon
Medium term
Impact measure
Intermediate (5)
Location
UK and South Africa
manufacturing brands
Primary potential
financial impact
Higher costs associated
with energy
Likelihood
Certain (5)
Risk rating
25
Measurement
Scope 1 and 2 emissions
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202496
STRATEGIC REPORT
TCFD
CONTINUED
Keys
Time horizon (Short term) Time horizon (Medium term) Time horizon (Long term) Likelihood
Impact measure (Low) Impact measure (Intermediate) Impact measure (High) Risk rating
TCFD category: Transition (emerging regulation)
Carbon pricing in the value chain
Large parts of our supply chain include the processing of
primary metals and building materials. New, low-emission
production processes are still being developed for commercial
use, which could lead to increased costs in our supply chain.
Emissions-intensive basic materials industries are also exposed
to global regulatory and policy decisions in the drive to reduce
emissions, and these changing policies may also impact our
supply chain. We expect some of the resulting price increases
to be passed on to our customers but, at this stage, there
is little visibility on the extent of our ability to so. Using the
emissions reduction pathway in our Net Zero Transition Plan,
and carbon price estimates as above, we conclude the impact
is higher in the NZE scenario.
Mitigation: The diversity of supply sources reduce
this risk to the Group. Our new Supply Chain Policy
sets out our expectations to our value chain partners
on environmental issues, and our Sustainable Product
Framework aims to reduce the embodied carbon of our
products. We expect our key suppliers to be ISO 14001
certified, or working towards an equivalent certification
standard, as well as implementing energy reduction
initiatives. In addition, suppliers must attain minimum
standards for water, waste and biodiversity conservation.
We engage with our suppliers regularly to consider lower
embodied carbon inputs (where the raw materials used
have acceptable technical qualities with lower carbon
emissions). These are amongst the initiatives in our Net
Zero Transition Plan that reduces the net impact of
carbon pricing in our value chain.
Business area
Upstream
Time horizon
Medium term
Impact measure
Intermediate (5)
Location
Global, all brands
Primary potential
financial impact
Increased cost of purchased
goods and inbound
transportation
Likelihood
Certain (5)
Risk rating
25
Measurement
Scope 3 emissions
(Category 1)
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 97
STRATEGIC REPORT
RISKS
Transitional risks
TCFD category: Transition (market and reputation)
Reliance on third parties or technologies to decarbonise
Achievement of our net zero target in 2040 relies on certain
factors beyond our control, for instance, the decarbonisation
of electricity grids, suppliers and retail partners meeting
decarbonisation timelines and the development of zero
emissions transportation. In particular, we are reliant on new
technology to develop alternative fuels to run kilns (e.g. biogas
or hydrogen) and require the purchase of electricity generated
from renewable sources in South Africa, which is less readily
available than in the UK. If competitors are quicker to innovate,
this may have a negative impact on the Group. We expect this
risk to be lower in the NZE scenario, where we expect higher
capital expenditure and research and development spending
on new technologies to reduce global emissions.
Mitigation: We work collaboratively with retailers and
engage with governmental and industry bodies to
shape supply chain decarbonisation policy. We continue
to invest in research and development and monitor
the development of low carbon raw materials and
technologies, in particular, heat and hot air recovery for
energy-intensive kilns.
Business area
Own operations and upstream
Time horizon
Medium term
Impact measure
Low (3)
Location
Global, all brands
Primary potential
financial impact
Higher costs, lower revenue
Likelihood
Certain (5)
Risk rating
15
Measurement
Scope 3 emissions
TCFD category: Transition
Cost of capital linked to sustainability criteria
Providers of capital (investors and banks) are increasingly
incorporating sustainability into their assessments, which
represents a risk to the availability and cost of capital.
The Group’s existing £130m multicurrency revolving credit
facility (which runs to October 2027) means the risk is
minimal in the short term. However, over the medium term,
investors and banks are expected to be more stringent
and withdraw funding or apply punitive charges if ongoing
targets on emission reduction are not aligned to their own
net zero targets.
Mitigation: We continue to engage in dialogue with
lenders, rating agencies and investors to ensure our climate
change disclosures are in line with the latest regulatory
requirements. Our progress towards our own emission
reduction target of net zero by 2040, as well as disclosure
of ESG-related metrics and targets, should ensure the net
impact is minimal.
Business area
Own operations
Time horizon
Medium term
Impact measure
Low (3)
Location
Global, all brands
Primary potential
financial impact
Higher cost of capital
Likelihood
Likely (4)
Risk rating
12
Measurement
Scope 1, 2 and 3 emissions,
UK interest rates
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 202498
STRATEGIC REPORT
TCFD
CONTINUED
Keys
Time horizon (Short term) Time horizon (Medium term) Time horizon (Long term) Likelihood
Impact measure (Low) Impact measure (Intermediate) Impact measure (High) Risk rating
TCFD category: Transition
Customer and consumer pressure
Driven by industry standards and government regulation,
large retailers and homebuilders require suppliers to be at
the forefront of embodied carbon reduction and in the
reduction of energy and water in use by their products.
Several of our customers now require their suppliers to
have set SBTi-aligned net zero targets. There is a medium-
term risk that some product lines are no longer of interest
to customers aligning their product portfolios to zero
carbon homes and net zero targets. We expect this risk to
be higher, as customers and consumers apply stringent
sustainability criteria to their purchasing decisions.
Mitigation: We engage with customers and brands to
ensure new products are designed to meet changing
customer requirements, ensuring our targets are aligned
with theirs and meet internal and external environmental
requirements. Our new Sustainable Product Framework
classifies our products against their sustainability criteria
and enables us the track total revenue derived from low
carbon products. Specific initiatives include, for example,
Triton providing consumers a water and energy savings
calculator and incorporating recycling and minimisation of
waste into packaging design, and Abode ensuring all new
products are flow limited and compliant with the Mandatory
Water Efficiency Labelling Scheme, anticipating customer
requirements. These actions limit the net impact of this risk.
Business area
Downstream
Time horizon
Medium term
Impact measure
Low (4)
Location
Global, all brands
Primary potential
financial impact
Lost revenue
Likelihood
Likely (4)
Risk rating
16
Measurement
Scope 3 emissions
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 99
STRATEGIC REPORT
TCFD category: Physical (chronic)
Flood risk
The Munich Re Location Risk Intelligence Tool was
used to assess physical climate risk, and identified six
sites, especially in the RCP 8.5 scenario, of having a
high or very high likelihood of flooding. These were
located in South Africa, the UK and China. Of the six
sites identified, one (the Grant Westfield headquarters
in Edinburgh) is a manufacturing facility, and hence
could have the highest impact due to its significant
revenue contribution to the Group. The rest are
sales or administrative in nature and could be more
easily relocated in case of potential flooding or other
significantly disruptive climate event.
Mitigation: All our brands have business continuity and
recovery plans that monitor risks to staff and premises from
meteorological events. Additionally, most sites have flood
damage insurance cover with limits that reflect the magnitude
of risk, and the diversified locations means it is unlikely that
more than one of the identified sites would flood at any
given time.
Business area
Own operations
Time horizon
Long term
Impact measure
Low (4)
Location
South Africa, UK, China
Primary potential
financial impact
Higher costs/disruption
of production
Likelihood
Unlikely (2)
Risk rating
8
Measurement
Meteorological forecasting
TCFD category: Physical (chronic)
Water scarcity
Despite issues regarding water scarcity persisting in
Cape Town, South Africa, none of our sites are at
very high risk of water scarcity. Only in the RCP 8.5
scenario is one of our 22 sites assessed considered to
be at ‘very high’ risk of future water stress. This site was
located within Cape Town, South Africa, and produces
adhesives for the manufacture of tiles, and is not
particularly water intensive.
Mitigation: Management closely monitor the supply of water
as Cape Town has had serious water scarcity issues in recent
years. To date, this has not impacted production at the facility
and, therefore, the operation has presented resilience to the risk. If
insufficient water was available, management would source from
other locations in South Africa that are also used to manufacture
adhesives. Additionally, a large water tank was installed at
the Olifantsfontein site, which is fed from the municipal mains,
providing storage to smooth out supply challenges.
Business area
Own operations
Time horizon
Long term
Impact measure
Low (3)
Location
South Africa
Primary potential
financial impact
Higher costs/disruption
of production
Likelihood
Unlikely (2)
Risk rating
6
Measurement
Annual freshwater
resource levels
Physical risks
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024100
STRATEGIC REPORT
RISKS
TCFD
CONTINUED
Keys
Time horizon (Short term) Time horizon (Medium term) Time horizon (Long term) Likelihood
Impact measure (Low) Impact measure (Intermediate) Impact measure (High) Risk rating
TCFD category: Product and services
Product design – resource efficient manufacturing
We are developing a Sustainable Products Framework
to enable us to classify our products according to their
sustainability attributes. Products manufactured through
an energy efficient processes with recycled raw materials
are classified as “sustainable” and are part of our Net
Zero Transition Plan. Our customers increasingly require
us to provide data on embodied carbon in our products
and this framework helps us focus our portfolio towards
products with lower embodied carbon. We also work with
suppliers to “design out” carbon, continually searching for
alternative, lower carbon raw materials. We believe these
actions will, over time, enable us to become preferred
suppliers to our key customers and grow market share,
and we expect this opportunity to be larger in the NZE
scenario, where demand for “sustainable” manufacturing
processes is higher.
Impact: Our brands have various initiatives underway to
improve resource efficiency, which will enable us to remain
market leaders with our environmental sustainability attributes
a significant competitive advantage.
For example, Grant Westfield, who already have 100%
recyclable panels, have recently obtained an Environmental
Product Declaration for their new Naturepanel collection. All
Naturepanels are FSC certified with a 30-year lifespan. The
process required Grant Westfield to complete a full life cycle
analysis, including raw materials, energy, transportation, use
and disposal. Johnson Tiles UK’s tile manufacturing process
is carefully calibrated to ensure that every tile manufactured
contains a minimum of 20% recycled ceramic material as part
of its pioneering ceramic waste recycling system.
Business area
Own operations and
downstream
Time horizon
Medium term
Impact measure
Intermediate (6)
Location
Global, all brands
Primary potential
financial impact
Increased sales/
decreased costs
Likelihood
Likely (4)
Risk rating
24
Measurement
Scope 3 emissions,
revenue from energy efficient
products
(green revenue)
OPPORTUNITIES
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 101
STRATEGIC REPORT
TCFD category: Products
Product design – resource efficient products
Products that are energy or water efficient will reduce
customer and consumer energy use and help reduce
scope 3 emissions. As part of our Sustainable Products
Framework, we focus resources on the development of
products that reduce energy and water in use for our
consumers. Innovative product design is key to continued
revenue growth and also helps to maintain competitive
positioning. We expect the size of the opportunity to be
higher in the NZE scenario as demand for sustainable
products increases and consumers are focused on their
own carbon footprints.
Impact: To maximise this opportunity, we target research,
development and marketing spend and collaborate with key
clients to develop and sell best-in-class, resource-efficient
products. Triton’s eco models save water and energy compared
to more conventional showers. Triton’s new ENVi
®
shower is
designed to help customers make water and energy savings.
ENVi
®
is externally certified with an eco button, which reduces
shower time by one minute, saving water, money and reducing
the customer’s carbon footprint.
Abode’s Naturale Aquifier tab was shortlisted for ‘Water
Saving Domestic Product of the Year’ at the Energy Saving
Awards 2023. It includes a water flow limitation and an energy
saving cold start valve, helping to save water and energy use,
as well as replacing single use plastic water with in house
filtered water.
Business area
Own operations and
downstream
Time horizon
Medium term
Impact measure
High (8)
Location
Triton, Abode
Primary potential
financial impact
Increased sales
Likelihood
Likely (4)
Risk rating
32
Measurement
Scope 3 emissions,
revenue from energy efficient
products
(green revenue)
OPPORTUNITIES
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024102
STRATEGIC REPORT
TCFD
CONTINUED
Keys
Time horizon (Short term) Time horizon (Medium term) Time horizon (Long term) Likelihood
Impact measure (Low) Impact measure (Intermediate) Impact measure (High) Risk rating
TCFD category: Resource Efficiency
Water, energy, waste savings
Energy
Our near-term decarbonisation profile includes
opportunities for energy efficiency and electricity savings.
The most significant saving this year has been the “right
sizing” of manufacturing at Johnsons Tiles UK, moving
production to just one kiln. The announcement post-year
end of the sale of Johnson Tiles UK will further reduce the
Group’s energy use next year.
Impact: This will significantly reduce Johnson Tiles’
energy usage along with measures like re-using the heat
from the kiln in prior production stages like spray drying
and technologies like retrofitting more efficient burners.
In the UK, 96% of electricity is currently sourced from
renewable contracts.
Water
Various opportunities and initiatives exist to reduce water
usage across the Group.
Impact: Johnson Tiles UK consumes large quantities of
water in the tile manufacturing process. Various initiatives
are underway aimed at re-using up to 30% of the total
factory usage and removing water from parts of the
production process. The sale of Johnson Tiles UK in 2025
will reduce the Group’s overall water usage going forward.
Water storage tanks for harvesting rainwater have been
installed in South Africa, as well as water filtration systems
to provide safe drinking water to stores, all reducing
water usage.
Waste savings
Norcros aims to reduce and recycle waste products and
packaging wherever possible.
Impact: Triton is part of the Distributor Takeback Scheme,
which facilitates return of product from direct purchasers
rather than ending up in the household waste stream.
There has been a significant drive to reduce waste to landfill at
Johnson Tiles, where fluorescent tubes are now recycled rather
than going to landfill, in line with the latest environmental
legislation. Additionally, local businesses now utilise their
waste tiles as land rehabilitation. The waste tiles were exposed
to extensive testing to ensure they are legally permitted to be
used for this purpose.
Packaging accounts for circa 5% of waste generated by
the Group. We aim to reduce the environmental impact of
our packaging through reducing packaging in absolute
terms, using more recycled content and eliminating single
use plastics. Merlyn has converted two ranges of its shower
enclosures to use recyclable packaging, eliminating single use
plastics and converting to paper/card based solutions.
Business area
Own operations
Time horizon
Medium term
Impact measure
High (8)
Location
Global, all brands
Primary potential
financial impact
Decreased costs
Likelihood
Likely (4)
Risk rating
32
Measurement
Water and waste costs
per annum, scope 1 and 2
emissions
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 103
STRATEGIC REPORT
OPPORTUNITIES
TCFD category: Energy source
Green generation
We aim to reduce our reliance on third-party electricity.
This offers an opportunity to become less dependent
on the national grid which, particularly in South Africa,
has a low proportion of renewable energy. We expect
this opportunity to be more significant under the NZE
scenario, with increased investment in alternative energy
technologies forecast, which should reduce unit costs.
Impact: We are targeting generation of our own renewable
energy through an on-site solar PPV at Olifantsfontein, South
Africa. We estimate that, cumulatively over a 20-year period,
this could save circa 12,400 tonnes of CO
2
. Tile Africa will be
installing solar panels into four stores this year and all new
lease agreements will require landlords to commit to solar
installations. We are also investigating purchased renewable
electricity in our remaining brands in both the UK and South
Africa, which could reduce our market-based emissions to
zero. In South Africa, contracting guaranteed renewable
electricity supply via long-term power purchase agreements is
one of the largest opportunities for us.
Business area
Own operations
Time horizon
Medium term
Impact measure
Intermediate (5)
Location
Global, all brands
Primary potential
financial impact
Decreased operating costs
Likelihood
Likely (4)
Risk rating
20
Measurement
Energy used from
renewable sources
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024104
STRATEGIC REPORT
TCFD
CONTINUED
Keys
Time horizon (Short term) Time horizon (Medium term) Time horizon (Long term) Likelihood
Impact measure (Low) Impact measure (Intermediate) Impact measure (High) Risk rating
TCFD category: Resource efficiency
Transportation
Decarbonisation of our distribution and depot fleets
would help to reduce scope 1 emissions and is a key
component of our Net Zero Transition Plan. This may
require transitional investment and further technological
development is required, especially for zero emissions
heavy goods vehicles. We expect this opportunity to be
more significant under the NZE scenario, with increased
investment in alternative energy technologies forecast
which should reduce unit costs.
Impact: Various brands have already made plans to
make their fleets more sustainable. Several brands have
already increased the number of electric vehicles in their
fleet as well as installing electric vehicle chargers. Croydex
has upgraded all but one of company cars to electric
vehicles and implemented a cycle to work scheme to
incentivise employees to cycle to work, as well as reducing
commuting emissions. Last year 53% of VADO’s fleet was
diesel and 18% was electric and, by the end of 2024, this
has improved to only 13% of the fleet being diesel, with
50% electric and the rest petrol hybrid.
We also expect our third-party logistic suppliers to move
away from internal combustion engines to electric vehicles,
thus reducing our scope 3 upstream and downstream
transportation and distribution emissions, although we expect
the bulk of this reduction in the medium term. We are reliant on
global trends in this area and our Net Zero Transition Plan to
2040 includes a reduction in the carbon intensity of inbound
and outbound freight.
Business area
Own operations, upstream
and downstream
Time horizon
Near/medium term
Impact measure
Low (4)
Location
Global, all brands
Primary potential
financial impact
Decreased costs
Likelihood
Likely (4)
Risk rating
16
Measurement
Scope 1 and 3 (upstream
and downstream
transportation and
distribution)
METRICS AND TARGETS
Our full carbon footprint is reported in alignment with the
Greenhouse Gas Protocol on page 77. In addition, we report
on our emissions intensity, total consumption of electricity,
renewable electricity, gas and water, and treatment of waste on
pages 77 and 86. We continue to monitor our climate exposures
and action plans through our risk management framework and
governance structure. Our main climate-related objectives are
monitored through our ESG MI Framework through the year
and reported to and reviewed by the Board.
This year, we have set science-based targets across scopes 1,2
and 3, which were validated by the SBTi in January 2024 and
affirm our long-term commitment to net zero across the value
chain by 2040. In addition, we have introduced ambitious
interim targets for 2028, with specific targets for each brand
that provide a clear path to emission reduction through to
2028 and beyond. For further details on our climate targets
and Net Zero Transition Plan, see pages 80 to 83.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 105
STRATEGIC REPORT
Risk management
Supporting sustainable business
objectives through embedded and
proactive risk management.
The proactive management of risk remains a priority for
the Group to help sustain the success of the business
in the future. There is a range of potential risks and
uncertainties that could have a material impact on the
Group’s performance. The objective of our risk management
framework is to support the business in meeting its strategic
and operational objectives through the identification,
monitoring and appropriate treatment of risks within clearly
defined risk appetite levels for each risk category.
Our principal risks are shown below:
Low
High
Minor Severe
Impact
Likelihood
1
5
6
7
8
11
10
9
12
3
2
4
Mitigated risk scores
Risk management framework
How we manage risk
Our risk management activities form part of a flexible
and robust governance framework, which is owned by
the Board, overseen by the Audit and Risk Committee
and embedded at an operational level. It consists of the
following key elements:
Defined risk responsibilities:
BOARD:
Overall responsibility for the risk management
framework. Defines the Group’s Risk Management
Policy, sets risk appetite levels for each risk category
and provides leadership on the Group’s risk culture
AUDIT AND RISK COMMITTEE
Provides oversight, challenge and independent
assurance on the risk management framework
MANAGEMENT
Day to day operational management of risk following
Group policies and embedded reporting procedures
Defined risk policies and reporting
procedures:
• Formal Board-approved Group Risk
Management Policy
• Defined risk appetite levels and metrics for each
category of risk
• Standardised, regular risk reviews and embedded
risk reporting
• Divisional support from Head of Group Internal
Audit and Risk Assurance
1
Acquisitions
7
Reliance on
production facilities
2
Stakeholder
requirements and
reporting requirements
8
Loss of key
supplier
3
Staff retention
and recruitment
9
Exchange
rate risk
4
Market
conditions
10
Funding and
liquidity risk
5
Loss of
key customers
11
Pension
scheme risk
6
Competition
12
Cyber
security
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024106
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
What we monitor
Risk landscape
CURRENT RISKS:
Risks that could affect our business, employees,
customers, supply chain and other stakeholders,
including the environment, and impact the achievement
of our strategic and operational goals
EMERGING RISKS:
“New” risks with relatively unclear potential future
impact or likelihood, identified through the embedded
internal risk assessment process
Risk categories
• Strategic
• Environmental, social and governance
(includes climate change)
• People
• Commercial
• Operational
• Financial
• Information technology and cyber security
• Regulatory and legal
• Fraud
• Health and safety
What we assess
Risk appetite: Acceptable level of risk, defined by the
Board, for each category of risk
Risk ownership: Each risk has a named owner
Risk scoring: Each risk is assessed in terms of its
financial and reputational impact, and its likelihood,
using a standard scoring scale
Inherent (gross) risk score: Assessment before
mitigating controls or actions are applied or taken
Residual (net) risk score: Assessment after mitigating
controls or actions are applied or taken
Actions: Required actions taken, or planned, to address
any risks that exceed acceptable risk appetite, including
defined timelines and clear ownership
Risk management process
Integrated top-down and bottom-up risk
management process
Risk management framework independent
oversight and challenge
Review management of material risks
Group Audit and Risk Committee
Provide independent, objective assurance
Facilitate business risk reviews
Reporting on principal risks and uncertainties
Group Internal Audit and Risk Assurance
Risk monitoring and reporting
Regular review and updating of risk registers
Group and brands
Strategic risk management
Identification, review and management of
Group risks
Group
Operational risk management
Update and maintain risk registers, reflecting key
risks identified and the treatment of each risk
including any mitigating actions taken
Brands
Informing Reporting
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 107
STRATEGIC REPORT
Our risk management framework enables identification of the principal risks
and uncertainties that we consider may threaten the Group’s business model,
future performance, solvency or liquidity.
These are explained in further detail in the following table,
including how they are being managed. The Board has
carried out a robust assessment of the principal and emerging
risks and taken them into consideration when assessing the
long-term viability of the Group and Company on page 117.
The list does not comprise all the risks that the Group may
face, and they are not listed in any order of priority.
In recent years, several of our principal risks were impacted
by the COVID-19 global pandemic. The perceived risk from
such pandemics has now diminished to such an extent that
it is no longer deemed to be a principal risk. We do, however,
continue to assess the potential impact and likelihood of
another pandemic in our risk registers.
This report is presented in an environment characterised by
significant known and unknown geopolitical and economic
uncertainty and risk. We will not address this as a specific risk,
instead covering the potential impact within our individual
principal risks.
Strategic Risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
1
Acquisitions
Part of the Group’s strategy is to grow through selective
acquisitions.
The impact of significant global events may affect the
cost, timing or availability of potential acquisitions, and the
availability of equity or bank funding. However, such events
may also provide additional opportunities that would not
otherwise have existed.
The Group might fail to successfully integrate acquisitions into
its existing business model.
The operational performance
of acquired businesses may not
reach expectations, impacting
Group profitability and cash flow,
as well as affecting the Group’s
reputation.
The Group has detailed target appraisal procedures in place, including appropriate due
diligence, and has senior management experienced in M&A work. The Group also has
robust Board approval procedures in place to ensure independent review of proposals.
When evaluating acquisitions, the Board considers the current size, strength and diversity
of the existing business, and seeks not to place undue reliance on any one of its brands.
Integration plans are finalised prior to acquisitions completing to ensure newly acquired
businesses are integrated efficiently and swiftly after acquisition. Group Internal Audit and
Risk Assurance conducts post-integration audits to ensure operations are fully integrated.
Past acquisitions provide demonstrable evidence of the Group’s ability to successfully
integrate new businesses.
Stable
Environmental, social and governance (ESG) risks
2
Stakeholder
requirements
and reporting
requirements
The need to develop more sustainable ways of doing business
is vital. Investors, customers and a wide range of other
stakeholders are increasingly wanting to form relationships with
companies that have a clear plan and framework to improve
their Environmental, Social and Governance (ESG) credentials.
A significant part of ESG risk is related to climate change and
the potential effects of both physical and transition climate-
related risks. See the TCFD section on pages 90 to 105.
There is a risk from failing to meet increasing regulatory and
reporting requirements.
Failure to adequately mitigate
ESG risks or to satisfactorily
meet reporting requirements
could lead to the Group losing
customers, investors or support
from other stakeholders, which
would negatively impact our
reputation, future profits or
funding opportunities that could
further limit future growth.
The Group continues to focus on providing sustainable value creation whilst being
committed to operating in an ethical and responsible manner with the highest standards
of corporate governance.
The Group has an established ESG governance structure and we continue to embed this
through the development and implementation of Group policies, strengthening carbon
data reporting and developing our wider ESG reporting capabilities (see the ESG section
on pages 48 to 89 for further details of how this risk is being managed).
Stable
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024108
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
Strategic Risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
1
Acquisitions
Part of the Group’s strategy is to grow through selective
acquisitions.
The impact of significant global events may affect the
cost, timing or availability of potential acquisitions, and the
availability of equity or bank funding. However, such events
may also provide additional opportunities that would not
otherwise have existed.
The Group might fail to successfully integrate acquisitions into
its existing business model.
The operational performance
of acquired businesses may not
reach expectations, impacting
Group profitability and cash flow,
as well as affecting the Group’s
reputation.
The Group has detailed target appraisal procedures in place, including appropriate due
diligence, and has senior management experienced in M&A work. The Group also has
robust Board approval procedures in place to ensure independent review of proposals.
When evaluating acquisitions, the Board considers the current size, strength and diversity
of the existing business, and seeks not to place undue reliance on any one of its brands.
Integration plans are finalised prior to acquisitions completing to ensure newly acquired
businesses are integrated efficiently and swiftly after acquisition. Group Internal Audit and
Risk Assurance conducts post-integration audits to ensure operations are fully integrated.
Past acquisitions provide demonstrable evidence of the Group’s ability to successfully
integrate new businesses.
Stable
Environmental, social and governance (ESG) risks
2
Stakeholder
requirements
and reporting
requirements
The need to develop more sustainable ways of doing business
is vital. Investors, customers and a wide range of other
stakeholders are increasingly wanting to form relationships with
companies that have a clear plan and framework to improve
their Environmental, Social and Governance (ESG) credentials.
A significant part of ESG risk is related to climate change and
the potential effects of both physical and transition climate-
related risks. See the TCFD section on pages 90 to 105.
There is a risk from failing to meet increasing regulatory and
reporting requirements.
Failure to adequately mitigate
ESG risks or to satisfactorily
meet reporting requirements
could lead to the Group losing
customers, investors or support
from other stakeholders, which
would negatively impact our
reputation, future profits or
funding opportunities that could
further limit future growth.
The Group continues to focus on providing sustainable value creation whilst being
committed to operating in an ethical and responsible manner with the highest standards
of corporate governance.
The Group has an established ESG governance structure and we continue to embed this
through the development and implementation of Group policies, strengthening carbon
data reporting and developing our wider ESG reporting capabilities (see the ESG section
on pages 48 to 89 for further details of how this risk is being managed).
Stable
Link to strategy
M&A
Organic
growth
Operational
excellence
ESG
STRATEGIC REPORT
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 109NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 109
People risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
3
Staff
retention and
recruitment
The Board’s paramount concern as regards our people is to
keep them safe. Our approach to the management of health
and safety is set out on pages 57 and 58. However, our
principal risk relating to people is retention and recruitment. At
year end, the Group employed 2,257 people worldwide. The
Group’s ability to grow and increase its market share depends
significantly on its continuing ability to recruit and retain highly
skilled employees in each area of its activities and to be an
employer of choice in the communities in which it operates.
The current employment landscape, including high levels of
employment, rising inflation, increasing national minimum and
living wage rates and flexible working demands, continues
to present uncertainty in the recruitment and retention of
appropriately skilled employees.
Future growth plans may
be restricted or delayed
by difficulties experienced
in recruiting and retaining
appropriate employees.
Group policy is to remunerate employees with competitive salaries, appropriate bonus and
incentive schemes, Sharesave and share option schemes and a range of other benefits.
Executive and key management are incentivised through an Approved Performance Share
Plan (APSP). A grant of options under the APSP has taken place annually since 2011.
The Group is focused on developing and adding to its existing talent pool. We offer employees
appropriate training and development opportunities, including across our devolved
organisation structure, and we have a demonstrable track record of internal promotion.
A Chief People Officer role was created last year. For further details on how we are
continuously improving pay and benefits for our teams, see the Chief People Officer’s
report on pages 44 to 47.
Stable
Commercial risks
4
Market
conditions
Demand in our markets is dependent on new building activity and
repair, maintenance and improvement (RMI) activity in both the
public and private sectors. This is, in turn, influenced by a range
of geo-political and macroeconomic factors affecting consumer
confidence and government spending policy in our key markets.
The outcomes of national elections in both South Africa and the
UK could affect housing and other policies in those markets.
The global economy remains slow to recover from the impact of
the pandemic. Other negative factors include high inflation, cost
of living increases, interest rate uncertainty and the conflicts in
Ukraine and the Middle East, which have affected energy and
food prices, and had an impact on sea freight routes.
Demand for our brands, which
are mid-premium positioned and
therefore less cyclical, remains
robust despite these geo-political
and macroeconomic pressures.
However, demand could still
weaken in the short to medium
term if consumers’ discretionary
spending patterns were to
change, impacting profitability
and cash generation.
Whilst we can’t directly affect the likelihood of the global risks noted materialising, there
are several mitigating factors in place that could limit the impact of potential changes in
consumer spending patterns on the Group. These include the breadth of products offered,
the geographical spread of our businesses, a flexible cost base and supply chain, investment
in new product development and the replacement cycle of several of our key products.
The effects of wider geo-political risks, such as increases in cyber security and climate
change uncertainty, are addressed more specifically elsewhere, where relevant.
Stable
5
Loss of key
customers
While the Group has a diverse range of customers, there are
certain key customers that account for higher levels of revenue.
The current market conditions noted elsewhere may have
similar effects on key customers who could go out of business
or change their business models, e.g. they may move to an
online, or other alternative, model and we may miss this
opportunity if we fail to adapt to such changes.
Many of the contractual
arrangements with customers are
short term in nature (as is common
in our markets) and there exists a
risk that the current performance
of a business may not be
maintained if such contracts were
not renewed or extended or were
maintained at lower volumes due
to a decline in economic activity
or our failure to provide goods or
services in the way a customer
requires us to do so.
The importance of relationships with key customers is recognised and managed by senior
management within the Group, who have direct and regular access to their counterparts at
the highest levels of management.
Our ESG strategy and credentials have been developed to meet our key customers’
expectations of their suppliers.
Rebate schemes and incentive programs help maintain key relationships in a competitive
market situation.
The Group stresses its key selling points, beyond product price and quality, such as
continuity of supply, the financial strength of the Group and the level of customer service,
to help maintain relationships. As well as an excellent product offering, the Group is also
able to assist with customers’ sourcing, storage and logistics requirements.
Each of our businesses continues to develop and evolve its digital and online offering in
response to the changing trading environment.
Stable
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024110
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
People risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
3
Staff
retention and
recruitment
The Board’s paramount concern as regards our people is to
keep them safe. Our approach to the management of health
and safety is set out on pages 57 and 58. However, our
principal risk relating to people is retention and recruitment. At
year end, the Group employed 2,257 people worldwide. The
Group’s ability to grow and increase its market share depends
significantly on its continuing ability to recruit and retain highly
skilled employees in each area of its activities and to be an
employer of choice in the communities in which it operates.
The current employment landscape, including high levels of
employment, rising inflation, increasing national minimum and
living wage rates and flexible working demands, continues
to present uncertainty in the recruitment and retention of
appropriately skilled employees.
Future growth plans may
be restricted or delayed
by difficulties experienced
in recruiting and retaining
appropriate employees.
Group policy is to remunerate employees with competitive salaries, appropriate bonus and
incentive schemes, Sharesave and share option schemes and a range of other benefits.
Executive and key management are incentivised through an Approved Performance Share
Plan (APSP). A grant of options under the APSP has taken place annually since 2011.
The Group is focused on developing and adding to its existing talent pool. We offer employees
appropriate training and development opportunities, including across our devolved
organisation structure, and we have a demonstrable track record of internal promotion.
A Chief People Officer role was created last year. For further details on how we are
continuously improving pay and benefits for our teams, see the Chief People Officer’s
report on pages 44 to 47.
Stable
Commercial risks
4
Market
conditions
Demand in our markets is dependent on new building activity and
repair, maintenance and improvement (RMI) activity in both the
public and private sectors. This is, in turn, influenced by a range
of geo-political and macroeconomic factors affecting consumer
confidence and government spending policy in our key markets.
The outcomes of national elections in both South Africa and the
UK could affect housing and other policies in those markets.
The global economy remains slow to recover from the impact of
the pandemic. Other negative factors include high inflation, cost
of living increases, interest rate uncertainty and the conflicts in
Ukraine and the Middle East, which have affected energy and
food prices, and had an impact on sea freight routes.
Demand for our brands, which
are mid-premium positioned and
therefore less cyclical, remains
robust despite these geo-political
and macroeconomic pressures.
However, demand could still
weaken in the short to medium
term if consumers’ discretionary
spending patterns were to
change, impacting profitability
and cash generation.
Whilst we can’t directly affect the likelihood of the global risks noted materialising, there
are several mitigating factors in place that could limit the impact of potential changes in
consumer spending patterns on the Group. These include the breadth of products offered,
the geographical spread of our businesses, a flexible cost base and supply chain, investment
in new product development and the replacement cycle of several of our key products.
The effects of wider geo-political risks, such as increases in cyber security and climate
change uncertainty, are addressed more specifically elsewhere, where relevant.
Stable
5
Loss of key
customers
While the Group has a diverse range of customers, there are
certain key customers that account for higher levels of revenue.
The current market conditions noted elsewhere may have
similar effects on key customers who could go out of business
or change their business models, e.g. they may move to an
online, or other alternative, model and we may miss this
opportunity if we fail to adapt to such changes.
Many of the contractual
arrangements with customers are
short term in nature (as is common
in our markets) and there exists a
risk that the current performance
of a business may not be
maintained if such contracts were
not renewed or extended or were
maintained at lower volumes due
to a decline in economic activity
or our failure to provide goods or
services in the way a customer
requires us to do so.
The importance of relationships with key customers is recognised and managed by senior
management within the Group, who have direct and regular access to their counterparts at
the highest levels of management.
Our ESG strategy and credentials have been developed to meet our key customers’
expectations of their suppliers.
Rebate schemes and incentive programs help maintain key relationships in a competitive
market situation.
The Group stresses its key selling points, beyond product price and quality, such as
continuity of supply, the financial strength of the Group and the level of customer service,
to help maintain relationships. As well as an excellent product offering, the Group is also
able to assist with customers’ sourcing, storage and logistics requirements.
Each of our businesses continues to develop and evolve its digital and online offering in
response to the changing trading environment.
Stable
Link to strategy
M&A
Organic
growth
Operational
excellence
ESG
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 111
STRATEGIC REPORT
Commercial risks continued
Risk Risk Description Impact Mitigation Risk movement Link to strategy
6
Competition
The Group operates within a highly competitive environment
in all its markets; this creates several risks, as well as a range of
opportunities if risks are managed well.
The actions of our competitors, including their marketing
strategies and new product development, could lead to them
gaining competitive advantage in key products and markets.
The Group recognises that there
is a risk to its results and financial
condition caused by the actions
of its competitors, as well as by its
own actions or inaction.
To help identify and manage such risks and opportunities, the competitive environment, the
specific business marketplace and the actions of competitors are reviewed and discussed
at both Group and operating division Board meetings.
In addition, each market is carefully monitored to identify any significant shift in policy by
any competitor, any change in the routes to market, any change in consumer tastes, or any
indication of new competitors and/or new product technology entering the market.
We proactively counter the threat from competitors through our own investment in innovative
new product development, by registering and protecting our intellectual property rights, and
by constantly striving to improve our product and customer service offerings.
We have in-house specialists who consider changes in regulations, such as the water heating
conditions of the Future Homes Standard, and work hard to meet the demands of consumers.
Increasing
Operational risks
7
Reliance on
production
facilities
The Group operates a number of facilities for the manufacture
of tiles and adhesives.
If any of these facilities (including
technology used to operate
them) were to fail, the effect on
the Group could be significant.
In May 2024, the Group sold its UK tile manufacturing operation, Johnson Tiles UK, to the
existing management team. This moves the Group towards an increasingly capital-light
operating model, like that in place at Merlyn and Grant Westfield.
This has significantly mitigated the risks associated with dependence on production
facilities across our brand portfolio.
In South Africa, where we continue to manufacture tiles and adhesives, there remain well-
established preventative maintenance programs in place, as well as a comprehensive and
flexible “annual shutdown” program throughout the manufacturing operations.
Finished goods inventory holdings across the operations continue to provide limited
“buffer” stocks in the event of operational failure.
Business continuity and disaster recovery plans have been developed, are in place and
are tested.
Additionally, a business interruption insurance policy is in place to mitigate losses caused
by a serious insurable event affecting manufacturing capability.
Decreasing
8
Loss of key
supplier
The Group’s extended supply chain, with its dependency on
interconnected third parties for manufacturing, has several
potential points of failure. Raw materials, components and
energy represent a significant proportion of the Group’s input
costs. The potential lack of availability of, or poor quality
standards in, these key elements represents a significant risk.
Reliance on a single supplier within the supply chain, or on
several key suppliers in close geographical proximity, could
lead to a failure to acquire the required quantity or quality of
essential resources or products.
There are increasing risks associated with the geo-political
landscape in respect of the West’s relationship with
China, regarding its stance on Taiwan. This could lead to a
deterioration in relations with China, including possible trade or
other economic sanctions.
The lack of supply of raw
materials or components such
as electronics, clay, sand,
glass, brassware or gas and
electricity, could have significant
impacts on the Group’s ability to
manufacture or procure product.
The risk of energy supply
interruption is elevated in South
Africa as its utility infrastructure
is less well developed than in
the UK.
The Group manages supply chain risks through long-term relationships with key suppliers,
audits of key suppliers, dual supply of critical materials or components, where considered
appropriate, and holding appropriate levels of finished goods stock.
Our businesses actively manage their supply chains and monitor input costs whilst liaising
with their customers. They mitigate risks through proactive sourcing and pricing strategies.
The Group maintains strict product quality standards and has dedicated procurement and
quality control resource in China to ensure these standards are adhered to. The Group
aims to mitigate risks on energy supply where these arise. The Group regularly reviews
the geographical concentration of its supplier base and mitigates risks arising where it is
commercially and economically practical to do so.
Increasing
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024112
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
Commercial risks continued
Risk Risk Description Impact Mitigation Risk movement Link to strategy
6
Competition
The Group operates within a highly competitive environment
in all its markets; this creates several risks, as well as a range of
opportunities if risks are managed well.
The actions of our competitors, including their marketing
strategies and new product development, could lead to them
gaining competitive advantage in key products and markets.
The Group recognises that there
is a risk to its results and financial
condition caused by the actions
of its competitors, as well as by its
own actions or inaction.
To help identify and manage such risks and opportunities, the competitive environment, the
specific business marketplace and the actions of competitors are reviewed and discussed
at both Group and operating division Board meetings.
In addition, each market is carefully monitored to identify any significant shift in policy by
any competitor, any change in the routes to market, any change in consumer tastes, or any
indication of new competitors and/or new product technology entering the market.
We proactively counter the threat from competitors through our own investment in innovative
new product development, by registering and protecting our intellectual property rights, and
by constantly striving to improve our product and customer service offerings.
We have in-house specialists who consider changes in regulations, such as the water heating
conditions of the Future Homes Standard, and work hard to meet the demands of consumers.
Increasing
Operational risks
7
Reliance on
production
facilities
The Group operates a number of facilities for the manufacture
of tiles and adhesives.
If any of these facilities (including
technology used to operate
them) were to fail, the effect on
the Group could be significant.
In May 2024, the Group sold its UK tile manufacturing operation, Johnson Tiles UK, to the
existing management team. This moves the Group towards an increasingly capital-light
operating model, like that in place at Merlyn and Grant Westfield.
This has significantly mitigated the risks associated with dependence on production
facilities across our brand portfolio.
In South Africa, where we continue to manufacture tiles and adhesives, there remain well-
established preventative maintenance programs in place, as well as a comprehensive and
flexible “annual shutdown” program throughout the manufacturing operations.
Finished goods inventory holdings across the operations continue to provide limited
“buffer” stocks in the event of operational failure.
Business continuity and disaster recovery plans have been developed, are in place and
are tested.
Additionally, a business interruption insurance policy is in place to mitigate losses caused
by a serious insurable event affecting manufacturing capability.
Decreasing
8
Loss of key
supplier
The Group’s extended supply chain, with its dependency on
interconnected third parties for manufacturing, has several
potential points of failure. Raw materials, components and
energy represent a significant proportion of the Group’s input
costs. The potential lack of availability of, or poor quality
standards in, these key elements represents a significant risk.
Reliance on a single supplier within the supply chain, or on
several key suppliers in close geographical proximity, could
lead to a failure to acquire the required quantity or quality of
essential resources or products.
There are increasing risks associated with the geo-political
landscape in respect of the West’s relationship with
China, regarding its stance on Taiwan. This could lead to a
deterioration in relations with China, including possible trade or
other economic sanctions.
The lack of supply of raw
materials or components such
as electronics, clay, sand,
glass, brassware or gas and
electricity, could have significant
impacts on the Group’s ability to
manufacture or procure product.
The risk of energy supply
interruption is elevated in South
Africa as its utility infrastructure
is less well developed than in
the UK.
The Group manages supply chain risks through long-term relationships with key suppliers,
audits of key suppliers, dual supply of critical materials or components, where considered
appropriate, and holding appropriate levels of finished goods stock.
Our businesses actively manage their supply chains and monitor input costs whilst liaising
with their customers. They mitigate risks through proactive sourcing and pricing strategies.
The Group maintains strict product quality standards and has dedicated procurement and
quality control resource in China to ensure these standards are adhered to. The Group
aims to mitigate risks on energy supply where these arise. The Group regularly reviews
the geographical concentration of its supplier base and mitigates risks arising where it is
commercially and economically practical to do so.
Increasing
Link to strategy
M&A
Organic
growth
Operational
excellence
ESG
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 113
STRATEGIC REPORT
Financial risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
9
Exchange
rate risk
The Group’s financial performance is subject to the effects
of fluctuations in foreign exchange rates. In particular, the
Group sources a significant proportion of its components
and goods for resale from the Far East and Europe, which are
denominated in foreign currencies (primarily the US Dollar, Euro
and Renminbi).
Should Sterling or the South
African Rand weaken against
these currencies, this could
result in an increase in future
input costs.
The Group typically seeks to hedge its foreign exchange transactional flows for up to 12
months forward, which largely removes the effects of day to day exchange rate volatility
on our businesses.
Regular monitoring of exchange rates and market conditions, together with frequent
dialogue with suppliers, allows our businesses time to negotiate revised commercial terms
with customers to mitigate the impact of longer-term changes in exchange rates.
The Group may, where it is considered appropriate, denominate some of its borrowings in
other currencies to hedge translational asset risk.
Stable
10
Funding and
liquidity risk
The Group’s ability to grow and adapt its business is
dependent, in part, on its ability to source funding through
bank financing facilities. Whilst the Group extended its rolling
credit facility and now has committed funding until October
2027, it is possible that the Group may find it difficult to obtain
financing on commercially acceptable terms in the longer term.
The inability to source adequate
longer-term funding could impact
our longer-term growth strategy,
whilst a breach of one or more
of the banking covenants
could result in the Group’s debt
becoming immediately repayable.
The Group completed a refinancing of its banking facilities in 2022. We re-forecast our
liquidity and funding requirements and covenant performance monthly. Senior Executives
and brand management teams review, monitor and track short-term liquidity weekly and
covenant performance monthly.
We maintain appropriate headroom against our borrowing facilities and covenants,
maintain strong working capital and capital expenditure controls and have disciplined
planning, budgeting and forecasting processes.
Stable
11
Pension
scheme risk
The Group’s pension position is subject to a number of risks
including changes in interest rates, asset values, inflation and
mortality (see note 24 for more detail).
These risks could increase the
assessed pension scheme liability
adversely or affect the funding
of the defined benefits under the
scheme and, consequently, the
Group’s funding obligations.
The scheme was closed to new members and future accrual with effect from 1 April 2013
and replaced by an auto-enrolment compliant defined contribution scheme. Risks from rising
costs of providing a final salary pension scheme have, therefore, been materially reduced.
All asset investments are managed by professional fund managers and a diverse asset
portfolio is maintained to spread risk and return.
Executive Management regularly monitors the funding position of the scheme and is
represented on the Trustee board to monitor and assess investment performance and
other risks to the Group.
The Group considers each valuation (IAS 19R and technical provisions basis) and
reassesses its position regarding its pension commitments in conjunction with external
actuarial advice.
The Group’s financial results show a net surplus in this scheme, as at 31 March 2024, of
£13.0m (2023: surplus of £14.9m) assessed in accordance with the accounting standard IAS
19R. The present value of scheme liabilities decreased by £10.0m due to benefit payments
made in the year, offset by a decrease in the discount rate to 4.85% (31 March 2023: 4.9%).
The assets’ value reduced by £11.9m due to benefit payments made in the period.
In 2022, the Group reached agreement with the Trustee on the 2021 triennial actuarial
valuation for the UK defined benefit scheme and on a revised deficit recovery plan. The
actuarial deficit at 31 March 2021 was £35.8m (2018: £49.3m). Deficit repair contributions
were agreed at £3.8m per annum from 1 April 2022 to March 2027 (increasing with CPI,
capped at 5%, each year). The deficit repair contributions in the current year were £4.0m.
The next triennial actuarial valuation is expected to take place during the year ending
31 March 2025.
Decreasing
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024114
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
Financial risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
9
Exchange
rate risk
The Group’s financial performance is subject to the effects
of fluctuations in foreign exchange rates. In particular, the
Group sources a significant proportion of its components
and goods for resale from the Far East and Europe, which are
denominated in foreign currencies (primarily the US Dollar, Euro
and Renminbi).
Should Sterling or the South
African Rand weaken against
these currencies, this could
result in an increase in future
input costs.
The Group typically seeks to hedge its foreign exchange transactional flows for up to 12
months forward, which largely removes the effects of day to day exchange rate volatility
on our businesses.
Regular monitoring of exchange rates and market conditions, together with frequent
dialogue with suppliers, allows our businesses time to negotiate revised commercial terms
with customers to mitigate the impact of longer-term changes in exchange rates.
The Group may, where it is considered appropriate, denominate some of its borrowings in
other currencies to hedge translational asset risk.
Stable
10
Funding and
liquidity risk
The Group’s ability to grow and adapt its business is
dependent, in part, on its ability to source funding through
bank financing facilities. Whilst the Group extended its rolling
credit facility and now has committed funding until October
2027, it is possible that the Group may find it difficult to obtain
financing on commercially acceptable terms in the longer term.
The inability to source adequate
longer-term funding could impact
our longer-term growth strategy,
whilst a breach of one or more
of the banking covenants
could result in the Group’s debt
becoming immediately repayable.
The Group completed a refinancing of its banking facilities in 2022. We re-forecast our
liquidity and funding requirements and covenant performance monthly. Senior Executives
and brand management teams review, monitor and track short-term liquidity weekly and
covenant performance monthly.
We maintain appropriate headroom against our borrowing facilities and covenants,
maintain strong working capital and capital expenditure controls and have disciplined
planning, budgeting and forecasting processes.
Stable
11
Pension
scheme risk
The Group’s pension position is subject to a number of risks
including changes in interest rates, asset values, inflation and
mortality (see note 24 for more detail).
These risks could increase the
assessed pension scheme liability
adversely or affect the funding
of the defined benefits under the
scheme and, consequently, the
Group’s funding obligations.
The scheme was closed to new members and future accrual with effect from 1 April 2013
and replaced by an auto-enrolment compliant defined contribution scheme. Risks from rising
costs of providing a final salary pension scheme have, therefore, been materially reduced.
All asset investments are managed by professional fund managers and a diverse asset
portfolio is maintained to spread risk and return.
Executive Management regularly monitors the funding position of the scheme and is
represented on the Trustee board to monitor and assess investment performance and
other risks to the Group.
The Group considers each valuation (IAS 19R and technical provisions basis) and
reassesses its position regarding its pension commitments in conjunction with external
actuarial advice.
The Group’s financial results show a net surplus in this scheme, as at 31 March 2024, of
£13.0m (2023: surplus of £14.9m) assessed in accordance with the accounting standard IAS
19R. The present value of scheme liabilities decreased by £10.0m due to benefit payments
made in the year, offset by a decrease in the discount rate to 4.85% (31 March 2023: 4.9%).
The assets’ value reduced by £11.9m due to benefit payments made in the period.
In 2022, the Group reached agreement with the Trustee on the 2021 triennial actuarial
valuation for the UK defined benefit scheme and on a revised deficit recovery plan. The
actuarial deficit at 31 March 2021 was £35.8m (2018: £49.3m). Deficit repair contributions
were agreed at £3.8m per annum from 1 April 2022 to March 2027 (increasing with CPI,
capped at 5%, each year). The deficit repair contributions in the current year were £4.0m.
The next triennial actuarial valuation is expected to take place during the year ending
31 March 2025.
Decreasing
Link to strategy
M&A
Organic
growth
Operational
excellence
ESG
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 115
STRATEGIC REPORT
Information technology and cyber security risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
12
Cyber
security
The Group relies on certain automated processes and systems
to manage data and conduct its business. The increasing
sophistication of cyber crime and data-loss incidents, along
with data protection legislation requirements, present risks
to all organisations. The risk from state-backed cyber attacks
continues with ongoing world conflicts.
Remote and home working continues to present risks
due to system access from potentially less secure working
environments and unfamiliar working practices.
A major failure of systems or a
successful cyber attack could
result in a temporary inability to
conduct operations or a loss of
commercial or personal data.
Such an incident may result in
regulatory breaches, financial
loss, operating disruption or
damage to the reputation of
the Group.
Last year, a cyber security specialist company carried out an independent evaluation of our
cyber security maturity. That led to improvement roadmaps being established for each brand,
and for the Group as a whole, which we have continued to work on throughout the year to
further improve our cyber security posture. We have enhanced our approach to vigilance
and resilience, to complement our existing risk prevention measures, which include security
tools and methods such as virtual private networks and multi-factor authentication.
During the year, we invested in a third-party Managed Detection and Response service to
monitor our networks for unusual activity and act swiftly in the event any is detected.
Each brand remotely backs up its data and undertakes annual manual penetration testing
conducted by a certified third party. We conduct regular vulnerability scanning of internal
and external IP addresses and our websites.
Group data protection policies and procedures are in place meeting UK and South Africa
data protection legislative requirements. Data protection representatives have been
nominated at each business to help co-ordinate the Group’s approach to data protection
and provide local advice.
The Group operates an annual online awareness training program for all system users
covering cyber security, information security and data protection. This has been enhanced
by the addition of an externally-managed security awareness training program, providing
year-round cyber security awareness training for all information system users.
A third-party specialist incident response provider is retained to assist the Group with an
appropriate and quick response to any cyber or data breach incidents that may occur.
During the year, a comprehensive IT disaster recovery scenario exercise was undertaken
with third-party experts facilitating Board members, senior leadership team members and
IT and cyber teams through an exercise to assess readiness for a cyber attack.
Stable
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024116
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
Information technology and cyber security risks
Risk Risk Description Impact Mitigation Risk movement Link to strategy
12
Cyber
security
The Group relies on certain automated processes and systems
to manage data and conduct its business. The increasing
sophistication of cyber crime and data-loss incidents, along
with data protection legislation requirements, present risks
to all organisations. The risk from state-backed cyber attacks
continues with ongoing world conflicts.
Remote and home working continues to present risks
due to system access from potentially less secure working
environments and unfamiliar working practices.
A major failure of systems or a
successful cyber attack could
result in a temporary inability to
conduct operations or a loss of
commercial or personal data.
Such an incident may result in
regulatory breaches, financial
loss, operating disruption or
damage to the reputation of
the Group.
Last year, a cyber security specialist company carried out an independent evaluation of our
cyber security maturity. That led to improvement roadmaps being established for each brand,
and for the Group as a whole, which we have continued to work on throughout the year to
further improve our cyber security posture. We have enhanced our approach to vigilance
and resilience, to complement our existing risk prevention measures, which include security
tools and methods such as virtual private networks and multi-factor authentication.
During the year, we invested in a third-party Managed Detection and Response service to
monitor our networks for unusual activity and act swiftly in the event any is detected.
Each brand remotely backs up its data and undertakes annual manual penetration testing
conducted by a certified third party. We conduct regular vulnerability scanning of internal
and external IP addresses and our websites.
Group data protection policies and procedures are in place meeting UK and South Africa
data protection legislative requirements. Data protection representatives have been
nominated at each business to help co-ordinate the Group’s approach to data protection
and provide local advice.
The Group operates an annual online awareness training program for all system users
covering cyber security, information security and data protection. This has been enhanced
by the addition of an externally-managed security awareness training program, providing
year-round cyber security awareness training for all information system users.
A third-party specialist incident response provider is retained to assist the Group with an
appropriate and quick response to any cyber or data breach incidents that may occur.
During the year, a comprehensive IT disaster recovery scenario exercise was undertaken
with third-party experts facilitating Board members, senior leadership team members and
IT and cyber teams through an exercise to assess readiness for a cyber attack.
Stable
Viability statement
In accordance with provision 31 of the 2018 revision of
the UK Corporate Governance Code, the Directors have
assessed the viability of the Group over a longer period
than the 12 months required by the “going concern”
provision. Taking into account the Group’s current position
and the nature of the principal risks and uncertainties it
faces, the Board has decided to assess the viability of the
Group over a three-year period to 31 March 2027. The Board
considers this period appropriate as it believes it is not
possible to credibly forecast beyond this time horizon and it
is also the period over which long-term incentives are set for
Executive Directors and senior management.
A viability statement financial model was developed on
a bottom-up basis by taking the output of the annual
budgeting process built up by individual brands, subjected
to review and challenge by the Board, and then applying
conservative general and business-specific assumptions to
build years two and three. The Board considers the outputs
from this financial model, including the Group’s cash flows,
headroom under existing financial facilities, dividend
cover and other key financial ratios over the three-year
period. The financial model has then been stress tested by
modelling the most extreme but plausible scenario, that
being a global pandemic similar in nature to COVID-19,
which, at its peak, saw a revenue reduction of 25% on
the prior year over a six-month period. The Directors have
considered the impact of this scenario on the Group’s
financial performance (specifically headroom on our
financial facilities and covenants) after taking account
of mitigating actions that could be made, with the result
being that the Group maintains the necessary liquidity
levels and complies with the facility covenants despite the
impact of significant declines in revenue, earnings, cash
outflows and increasing leverage.
Reverse stress testing has also been applied to the model,
which represents a further decline in sales compared
with the reasonable worst case. Such a scenario, and the
sequence of events that could lead to it, is considered to
be implausible and remote.
Therefore, the Directors have a reasonable expectation
that the Group and Company will be able to continue in
operation and meet their liabilities as they fall due over the
period to March 2027.
Link to strategy
M&A
Organic
growth
Operational
excellence
ESG
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 117
STRATEGIC REPORT
Engaging with our stakeholders
Statement by the Directors in relation to their statutory duty in accordance with Section 172(1) of the
Companies Act 2006.
Section 172 statement
The Board of Directors of Norcros plc consider that they, both
individually and collectively, have acted in a way that would
be most likely to promote the success of the Company for
the benefit of its members as a whole (having regard to the
stakeholders and matters set out in Section 172(1) (a–f) of
the Companies Act 2006) in the decisions they have taken
during the year ended 31 March 2024.
In making this statement, the Directors have had regard
to the longer-term consideration of stakeholders and the
environment and have taken into account the following:
a. The likely consequences of any decisions in the long term
b. The interests of the Company’s employees
c. The need to foster the Company’s business relationships
with suppliers, customers and others
d. The impact of the Company’s operations on the
community and the environment
e. The desirability of the Company maintaining a reputation
for high standards of business conduct
f. The need to act fairly as between members of the Company
The Board’s understanding of the interests of the Company’s
stakeholders is informed by the program of stakeholder
engagement detailed below. Section 172 considerations are
embedded in decision making at Board level and throughout
the Group. The Directors fulfil their duties by ensuring that
there is a strong governance structure and process running
through all aspects of the Group’s operations. The strategy
for the Group has been carefully considered by the Board in
conjunction with the Group’s Executive Management teams.
The Board dedicates time for it to consider all stakeholder
interests, primarily those of its shareholders as a whole, but
also employees, suppliers, customers and the members of the
Group’s pension schemes. All these stakeholders, amongst
others, have been impacted in different ways by the global
economic and other challenges facing the Group, and the
Board has had regard to this and has formulated a number of
measures to address stakeholder interests in a balanced way.
Board information
The information used by the Board in its decision making is
extensive and includes:
• publicly available information on market trends, competitor
activity and analyst reports;
• professional experience and qualifications;
• training and induction;
• monthly provision of Board papers including financial and
non-financial information; and
• advice and presentations by internal and external subject
matter experts.
Strategic considerations
Section 172 considerations are taken into account in the
Board’s strategic discussions.
• The Board ensures that it has the information it needs
to support its decision making. Further information is
collected if required.
• Board discussions take place based on this information
and in consideration of the long-term impacts on the
Group and all its stakeholders.
• If circumstances change, the Board will revisit its initial
consideration and make changes accordingly.
Board decision making
Once a decision has been made, an action plan is created
that includes the consideration of stakeholders:
• The decisions are implemented following the action plan
with regular progress meetings.
• Feedback from relevant stakeholders is shared with
the Board.
• The impact of the decision is reviewed and learning points
are communicated.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024118
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
Our commitment to excellent customer service
remains critical to our success.
Why it is important to engage with this
stakeholder group:
• We engage to develop customer-focused solutions,
ensuring the Group understands and responds to
evolving customer needs. This helps us retain our
customers and attract new ones.
• We also engage with customers to understand the
environmental challenges they face.
• We engage to reinforce our customer-focused
culture, delivering excellent customer service.
How Norcros engaged in the year:
• We engaged through our experienced customer
service teams, engaging with customers on a
daily basis and regular monitoring of performance
against service level agreements and quality
standards.
• We attended the KBB exhibition with
complementary stands to show customers how our
products can work together.
• We welcomed customer visits to our showrooms to
demonstrate our products in action and to receive
feedback.
How Norcros responded:
• Investment in systems in areas such as sourcing
and customer service to enhance the customer
experience.
• We proactively invested in inventory to protect our
service and stock availability in light of continued
supply chain challenges.
• New product launches in response to customer
needs, for example the launch of Triton’s
ENVi
®
shower and VADO’s Cameo bathroom
furniture range.
• Obtaining accreditations such as WRAS approval
so that our hot water taps can be used in new
build markets.
READ MORE ABOUT OUR CUSTOMERS ON
PAGES 10 AND 11
Shareholder support for our strategy is essential for
the Group’s long-term success.
Why it is important to engage with this
stakeholder group:
• We aim to provide a transparent, clear and
consistent message on both our performance and
our plans to create value, across our communication
channels.
• We engage to ensure the Group responds to the
changing needs and interests of shareholders and
to ensure our strategy remains relevant.
How Norcros engaged in the year:
• We engaged through investor roadshows and
gave our shareholders the opportunity for contact
with our Board on a regular basis.
• Changes to the Directors’ remuneration policy
were discussed with shareholders before being
finalised.
• In May 2024, we held a Capital Markets Event. For
more information, see the Capital Markets Event
case study on page 122.
How Norcros responded:
• The formulation of our Directors’ remuneration
policy and subsequent amendments reflected the
shareholder discussions.
• Engagement with our shareholders influenced our
acquisition, capital investment and progressive,
albeit prudent, dividend policies.
• The latest strategy and targets were presented to
shareholders and the updates were understood
and well received.
• The acquisition of the Grant Westfield business
in 2022 was partly funded through equity,
the demand for which was extremely strong,
demonstrating continued support for the Group’s
M&A strategy.
READ MORE WHY INVEST IN NORCROS ON
PAGES 14 AND 15
CustomersShareholders
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 119
STRATEGIC REPORT
At Norcros, sustainability underpins our entire
business strategy. We aim to manage our societal and
environmental impact by conducting business to the
highest standards as well as using resources more
efficiently.
Why it is important to engage with this
stakeholder group:
• We engage to better understand environmental
challenges and how we can contribute to meeting
them and minimise the impact of the Group on
the environment.
• This also enables us to adhere to relevant
environmental legislation and regulations and
to ensure that high environmental standards are
respected at each of the Group’s sites.
How Norcros engaged in the year:
• We worked with our customers and suppliers to
improve the efficiency of our operations.
• We engaged with customers, suppliers and other
stakeholders to understand the environmental
challenges they face and look for ways to improve
the efficiency of our businesses.
• We ensured that our near term and net zero
emission targets were validated and approved by
the Science Based Targets initiative (SBTi).
How Norcros responded:
• We launched design-led sustainable products such
as the ENVi
®
shower, our first Climate Partner
Certified product.
• We are developing a Sustainable Products
Framework so we can consistently measure and
report on the sustainability of our products.
• We recognised that our shareholders are also
placing increasing importance on environmental
issues and wanted to understand the actions
of the Group. We further developed our ESG
plan to provide an overarching framework to the
work we do.
• We established a strong governance structure,
including a Group-wide ESG Forum, to coordinate
our sustainability strategy.
READ MORE IN THE PLANET SECTION OF
SUSTAINABILITY ON PAGES 74 TO 89
The Board continues to regard our employees as
our most valuable asset. The Group’s strategy and
business model are underpinned by the commitment
and efforts of all our employees.
Why it is important to engage with this
stakeholder group:
• We engage to ensure that all employees are valued
and are given the opportunity to provide feedback
and participate in shaping the development of
the Group.
• This helps us underpin our culture of safety and
ensures that employees at all levels in the business
play a role in promoting and upholding a strong
focus on health and safety, for the benefit of the
Group and the wider community.
How Norcros engaged in the year:
• We engaged with staff throughout the Group
through our brand structure. Engagement is led
by Alison Littley as the designated Non-executive
Director for workforce engagement (see page 134).
• The Chief Executive Officer held two presentations
for all staff to discuss the financial results of
the Group.
• At a brand level, regular employee briefings took
place to ensure that important information is shared.
• Employee surveys were undertaken within our
brands on a regular basis, but this year we will
launch our first Group-wide engagement survey
to help us understand our employees’ views and
needs on a more consistent basis.
How Norcros responded:
• The Group’s culture has been a particular focus of
the Board and is embodied in how we endeavour
to go about our business. All members of the
Board undertake regular site visits and receive
reports and other information to enhance their
understanding.
• Employees are encouraged to be involved in the
Company’s performance through employee share
schemes, and other means of incentivisation
and reward.
READ MORE IN THE PEOPLE SECTION OF
SUSTAINABILITY ON PAGES 56 TO 66
Employees Environment
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024120
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
CONTINUED
Our commitment to the society in which we operate
is deep. Every Group brand has programs of social
engagement, including many charitable activities.
Why it is important to engage with this
stakeholder group:
• We engage to have a positive impact on the local
communities in which our businesses operate.
• We engage to encourage equal opportunities and
a more diverse workforce.
How Norcros engaged in the year:
• We participated in charitable activities and
initiatives across the Group such as Merlyn’s
partnership with the Pink Ribbon Charity and
Triton’s work with the Canal & River Trust.
• We empowered and encouraged our brands to
support local charities, initiatives and community
projects, and provided local employment.
• The Executive Management of the Group
supported this commitment to our society
and reviewed each brand’s activities on a
monthly basis.
How Norcros responded:
• Our brands in South Africa continue their
participation in the Youth Employment Services
Program which offers meaningful work experience
to young people.
• Triton, as one of the area’s largest employers, has
continued to invest in its apprenticeship scheme
giving school leavers the opportunity to earn as
they learn.
READ MORE IN SUSTAINABILITY ON
PAGES 87 TO 89
Society
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 121
STRATEGIC REPORT
Capital Markets Event
In May 2024, we engaged our shareholders and the wider investor community in a Capital Markets Event in London.
We used this presentation and networking event to update investors on the Norcros story and outline our new strategy.
We find this approach very useful to align some of our key stakeholders around our vision and priorities.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024122
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
CONTINUED
Developing our ESG strategy
ESG has always been important to Norcros, particularly around our responsibilities as a plc. However, over the last few
years, we have put more emphasis on a structured approach to reflect the expectations and requirements of a rapidly
developing ecosystem of stakeholders in the ESG space. Some examples of how we have engaged and responded to
different stakeholder groups are listed below.
Regulators
In addition to meeting our regulatory and legal
responsibilities, we are disclosing in line with
recommended frameworks such as TCFD.
Ratings agencies
We engage regularly with ratings agencies, such as
MSCI and FTSE Russell, to understand their requirements
and ratings reports. These are becoming increasingly
important for our shareholders.
Shareholders
We engage with shareholders and ESG teams in
institutional investors to understand their perspectives on
ESG and our performance. We regularly provide updates
to shareholders through the ESG section in our Annual
Report and our twice-yearly investor presentations.
Standards bodies
We engage with standards bodies to establish our ESG
framework and validate our ESG systems. We used
resources from SASB as an industry standard input
for our materiality assessment. We have validated our
carbon emissions targets with SBTi. We have submitted
a disclosure to CDP (B rating). We have aligned our Net
Zero Transition Plan to the TPT standards. We validate our
sustainability processes against international standards,
including ISO 9001, ISO 14001 and ISO 45001.
Customers
We continually engage with customers on developing
our ESG framework so we understand and reflect their
requirements. This year we have been working with
several key customers on the provision of ESG data. This
has included providing data on the embodied carbon of
specific products. We are finding that being able to readily
provide ESG data is becoming a competitive advantage
for our business.
Employees
We have developed our ESG strategy with our employees.
This has included establishing an ESG Forum with over 20
representatives from across the organisation. They have
been integral in developing our strategy, ESG policies and
engaging on implementation.
Communities
Social and Community Engagement is one of our ESG
priority themes. We are committed to supporting and
enhancing the communities in which we work. This is
often through community support projects.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 123
STRATEGIC REPORT
The following table summarises our approach to internal and external
stakeholder engagement to comply with the requirements of the Companies
Act 2006 regarding non-financial reporting (Sections 414CA and 414CB)
Reporting requirements
Our position Relevant policies Further information
Environmental
matters
• Impact of our business
on the environment
• Climate-related
financial disclosures
Sustainability is at the heart
of our business and underpins
our business strategy. We are
committed to minimising our
impact on the environment
through our operations,
products and services.
• Supply Chain Policy Sustainability report
pages 48 to 89
TCFD report
pages 90 to 105
Employees
We believe in the importance
of doing the right thing for our
people. We are committed to
investing in our workforce and
recognise the importance of
their opinions to our success.
We are continuously working
towards a sustainable,
safe and diverse working
environment.
• Code of Ethics and Standards
of Business Conduct
• Whistleblowing Policy
• Health and Safety Policy
• Data Protection Policy
• Information Security
Minimum Standards
• Cyber and Data Breach Policy
Sustainability report
pages 48 to 89
Chief People
Officer’s Review
pages 44 to 47
Stakeholder
engagement
pages 118 to 123
Gender pay gap
reporting –
www.norcros.com
Social matters and
human rights
We are deeply committed
to the society in which
we operate, and focus on
supporting and engaging with
our local communities. We
are committed to upholding
human rights across our
business and with all our
stakeholders.
• Code of Ethics and Standards
of Business Conduct
• Anti-Tax Evasion Policy
• Modern Slavery Act Statement
Sustainability report
pages 48 to 89
Stakeholder
engagement
pages 118 to 123
Audit and Risk
Committee report
pages 140 to 145
Modern Slavery Act
Statement –
www.norcros.com
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024124
STRATEGIC REPORT
NON-FINANCIAL AND SUSTAINABILITY
INFORMATION STATEMENT
Strategic Report
To the members of Norcros plc
The Strategic Report provides a review of the business for
the financial year and describes how we manage risks.
The report outlines the developments and performance
of the Group during the financial year and the position
at the end of the year and discusses the main trends and
factors that could affect the business in the future.
Key performance indicators are published to show the
performance and position of the Group. Also provided is
an outline of the Group’s vision, strategy and objectives,
along with the business model.
Approval
The Group Strategic Report on pages 18 to 125 of
Norcros plc was approved by the Board and signed on its
behalf by:
THOMAS WILLCOCKS
Chief Executive Officer
12 June 2024
Our position Relevant policies Further information
Anti-corruption
and
anti-bribery
We prohibit all forms of
bribery and corruption within
our businesses and comply
with the requirements of all
applicable anti-bribery and
corruption laws.
• Anti-Bribery and
Corruption Policy
• Anti-Money Laundering Policy
• Whistleblowing Policy
Audit and Risk
Committee Report
pages 140 to 145
Other information
• Business model
• Principal risks affecting
the Group and
mitigating actions
undertaken
• Non-financial key
performance indicators
Additional non-financial
information required under the
Companies Act.
• Risk Management Policy
and Procedures
Our Business Model
pages 20 and 21
Risk management
pages 106 to 117
ESG KPIs
pages 52 to 55
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 125
STRATEGIC REPORT
Board of Directors
128
Governance at a Glance
130
Chair’s Introduction
132
Governance Key Highlights
134
Corporate Governance Report
136
Audit and Risk Committee Report
140
Nomination Committee Report
146
Remuneration Committee Report
150
Directors’ Remuneration Policy Report
153
Annual Report on Remuneration
162
Directors’ Report
172
Statement of Directors’ Responsibilities
175
CORPORATE
GOVERNANCE
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024126
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 127
STEVE GOOD
Board Chair and
Non-executive Director
THOMAS WILLCOCKS
Chief Executive Officer
JAMES EYRE
Chief Financial Officer
ALISON LITTLEY
Non-executive Director
STEFAN ALLANSON
Non-executive Director
RICHARD COLLINS
Company Secretary
N
R A
N
R A
N
R
Appointment to the Board
Appointed Board Chair 1 July 2023
Length of tenure
One year
Previous experience
Steve has previously served as chair
of Zoteforms plc and Devro plc and as
a non-executive director of Elementis
plc, Dialight plc, Cape plc and Anglian
Water. In his executive career, Steve
was chief executive of Low & Bonar
plc between 2009 and 2014, where
he had previously held various senior
roles since 2004.
External appointments
Steve will become a non-executive
director and board chair-elect of
Essentra plc on 1 July 2024.
Appointment to the Board
Appointed Chief Executive Officer
1 April 2023
Length of tenure
Two years
Previous experience
Prior to his appointment as Chief
Executive Officer, Thomas operated
as Group Business Director – UK,
with operational responsibility for
the Group’s UK and Ireland business
segment. He joined Norcros South
Africa in 2006 as Tile Africa’s
Store Development Manager and
was promoted in 2007 to General
Manager of Tile Africa, before
being appointed as Managing
Director of Norcros South Africa in
2009. In this role, he oversaw the
sustained and profitable growth
of our South African business until
taking up the Group role in 2021.
Thomas previously worked for the
Spar Group in South Africa and
the UK. He grew up in ESWATINI
(formerly known as Swaziland)
and was educated in South Africa
where he graduated with a Bachelor
of Commerce degree from the
University of Natal.
External appointments
n/a.
Appointment to the Board
Appointed Chief Financial Officer
1 August 2021
Length of tenure
Three years
Previous experience
James joined Norcros as Director
of Corporate Development and
Strategy in 2014 before being
promoted to Chief Financial Officer
in August 2021. He began his
career at Arthur Andersen and
subsequently has held a number of
senior financial positions with Bank
of Scotland, Rothschild & Co, Bank
of Ireland and, immediately prior to
joining Norcros, with AstraZeneca.
James became a trustee of the
David Lewis Centre in 2012 and
stepped down from this role in 2016.
He is a member of the Institute of
Chartered Accountants in England
and Wales. James has extensive
experience in international M&A,
business development and strategy.
External appointments
n/a.
Appointment to the Board
Appointed to the Board 1 May 2019,
Senior Independent Director from
1 July 2023
Length of tenure
Five years
Previous experience
Alison has substantial experience
in multinational manufacturing
and supply chain operations, and
a strong international leadership
background gained through a
variety of senior management
positions in Diageo plc and
Mars Inc and an agency to HM
Treasury where she was chief
executive officer. Alison was
formerly a non-executive director
of MusicMagpie plc, James Hardie
Industries plc, Headlam Group
plc, Geoffrey Osborne Group and
Weightmans LLP.
External appointments
Alison is currently a non-executive
director at Xaar plc (until 30 June
2024) and Eurocell plc, where she is
also chair of the ESG and Employee
Engagement Committee.
Appointment to the Board
Appointed to the Board
1 January 2023
Length of tenure
Two years
Previous experience
Stefan has held senior finance roles
at Keepmoat Ltd, Tianhe Chemicals
Ltd, The Vita Group Limited, The
SkillsMarket Ltd and Honda Motor
Company.
External appointments
Stefan is chief financial officer of MJ
Gleeson plc, the Main Market listed
low-cost housebuilder and land
promoter, where he has held the role
since 2015.
Appointment to Board
Joined the Company in June 2013
as Company Secretary and
Group Counsel
Length of tenure
11 years
Previous experience
Richard is a highly experienced
lawyer and company secretary,
and is a member of the Group’s
Senior Executive Committee. He
qualified as a solicitor in 1988 and
was previously company secretary
and director of risk and compliance
at Vertex Financial Services. Prior
to that, Richard was company
secretary and head of legal with
Tribal Group plc, Blick plc and
Aggregate Industries plc.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024128
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
STEVE GOOD
Board Chair and
Non-executive Director
THOMAS WILLCOCKS
Chief Executive Officer
JAMES EYRE
Chief Financial Officer
ALISON LITTLEY
Non-executive Director
STEFAN ALLANSON
Non-executive Director
RICHARD COLLINS
Company Secretary
N
R A
N
R A
N
R
Appointment to the Board
Appointed Board Chair 1 July 2023
Length of tenure
One year
Previous experience
Steve has previously served as chair
of Zoteforms plc and Devro plc and as
a non-executive director of Elementis
plc, Dialight plc, Cape plc and Anglian
Water. In his executive career, Steve
was chief executive of Low & Bonar
plc between 2009 and 2014, where
he had previously held various senior
roles since 2004.
External appointments
Steve will become a non-executive
director and board chair-elect of
Essentra plc on 1 July 2024.
Appointment to the Board
Appointed Chief Executive Officer
1 April 2023
Length of tenure
Two years
Previous experience
Prior to his appointment as Chief
Executive Officer, Thomas operated
as Group Business Director – UK,
with operational responsibility for
the Group’s UK and Ireland business
segment. He joined Norcros South
Africa in 2006 as Tile Africa’s
Store Development Manager and
was promoted in 2007 to General
Manager of Tile Africa, before
being appointed as Managing
Director of Norcros South Africa in
2009. In this role, he oversaw the
sustained and profitable growth
of our South African business until
taking up the Group role in 2021.
Thomas previously worked for the
Spar Group in South Africa and
the UK. He grew up in ESWATINI
(formerly known as Swaziland)
and was educated in South Africa
where he graduated with a Bachelor
of Commerce degree from the
University of Natal.
External appointments
n/a.
Appointment to the Board
Appointed Chief Financial Officer
1 August 2021
Length of tenure
Three years
Previous experience
James joined Norcros as Director
of Corporate Development and
Strategy in 2014 before being
promoted to Chief Financial Officer
in August 2021. He began his
career at Arthur Andersen and
subsequently has held a number of
senior financial positions with Bank
of Scotland, Rothschild & Co, Bank
of Ireland and, immediately prior to
joining Norcros, with AstraZeneca.
James became a trustee of the
David Lewis Centre in 2012 and
stepped down from this role in 2016.
He is a member of the Institute of
Chartered Accountants in England
and Wales. James has extensive
experience in international M&A,
business development and strategy.
External appointments
n/a.
Appointment to the Board
Appointed to the Board 1 May 2019,
Senior Independent Director from
1 July 2023
Length of tenure
Five years
Previous experience
Alison has substantial experience
in multinational manufacturing
and supply chain operations, and
a strong international leadership
background gained through a
variety of senior management
positions in Diageo plc and
Mars Inc and an agency to HM
Treasury where she was chief
executive officer. Alison was
formerly a non-executive director
of MusicMagpie plc, James Hardie
Industries plc, Headlam Group
plc, Geoffrey Osborne Group and
Weightmans LLP.
External appointments
Alison is currently a non-executive
director at Xaar plc (until 30 June
2024) and Eurocell plc, where she is
also chair of the ESG and Employee
Engagement Committee.
Appointment to the Board
Appointed to the Board
1 January 2023
Length of tenure
Two years
Previous experience
Stefan has held senior finance roles
at Keepmoat Ltd, Tianhe Chemicals
Ltd, The Vita Group Limited, The
SkillsMarket Ltd and Honda Motor
Company.
External appointments
Stefan is chief financial officer of MJ
Gleeson plc, the Main Market listed
low-cost housebuilder and land
promoter, where he has held the role
since 2015.
Appointment to Board
Joined the Company in June 2013
as Company Secretary and
Group Counsel
Length of tenure
11 years
Previous experience
Richard is a highly experienced
lawyer and company secretary,
and is a member of the Group’s
Senior Executive Committee. He
qualified as a solicitor in 1988 and
was previously company secretary
and director of risk and compliance
at Vertex Financial Services. Prior
to that, Richard was company
secretary and head of legal with
Tribal Group plc, Blick plc and
Aggregate Industries plc.
KEY
A
Audit and Risk Committee
N
Nomination Committee
R
Remuneration Committee
A
Chair of Committee
As announced by the Company on
24 May 2024, Rebecca DeNiro will be
appointed as a Director on 1 July 2024
and will, therefore, be seeking election
at the 2024 AGM. Rebecca brings a
wealth of relevant experience in well-
known consumer brands such as Dyson
and Regatta.
Board appointment
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 129
CORPORATE GOVERNANCE
Length of tenure
Our Board
The Board comprises five Directors with a diverse and complementary range of
industry experience, technical knowledge, perspectives and personal strengths.
● <1 year ● 1–3 years ● 4–9 years ● Independent Chair
● Independent Non-executive Directors
● Executive Directors
Skills matrix
Category Skill/area of expertise/experience Number of Directors with skill/experience
SUPPORTING
THE GROUP
STRATEGY
M&A 4
Business development and strategy 5
Investor relations 5
Operational experience 4
Sustainability 5
Supply chain operations 4
OTHER
AREAS OF
GOVERNANCE
Banking and finance 3
Risk management 5
Executive leadership 5
Governance 5
Health and safety 5
Workforce engagement 5
1 3 1
1 2 2
Independence
*All of these are for Directors as of 31 March 2024.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024130
CORPORATE GOVERNANCE
GOVERNANCE AT A GLANCE
Board gender diversity Board nationality
● Male
● Female
From 1 July 2024, there will be 2 female
and 4 male Board members.
● British
● South African/British
● Male
● Female
Attendance by individual Directors at meetings of the Board and its Committees
The attendance of Directors at the Board and principal Board Committee meetings during the year is detailed in the
table below:
Main Board
7 meetings
Audit and Risk
Committee
3 meetings
Remuneration
Committee
4 meetings
Nomination
Committee
4 meetings
STEVE GOOD, CHAIR
1
5/7 2/3 3/4 3/4
DAVID MCKEITH
2
3/7 2/3 2/4 1/4
ALISON LITTLEY
7/7 3/3 4/4 4/4
STEFAN ALLANSON
7/7 3/3 4/4 4/4
THOMAS WILLCOCKS
7/7 — — —
JAMES EYRE
7/7 — — —
1
Steve Good was appointed on 1 July 2023. He attended all Board and Committee meetings held after this date.
2
David McKeith acted as Board Chair from 24 January 2023 before retiring from the Board on 26 July 2023.
Executive management
gender diversity
4
1
4
1
3
2
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 131
CORPORATE GOVERNANCE
I am pleased to present the
Governance Report for the year
ended 31 March 2024.
This financial year has been set against the backdrop of
wider economic, political, social and industry pressures, which
have brought their own unique set of challenges. I would like
to take this opportunity to thank all of our colleagues for their
hard work in helping the Group achieve a resilient result.
I would also like to take this opportunity to thank my
predecessor, David McKeith, who was Acting Chair for
the Group until my appointment. David’s experience and
contribution have been invaluable to the Group and I thank
him for the diligent service over his tenure and the support he
has given me as I took on the role of Board Chair.
With the challenging market conditions, it is important that
the culture and values that run through the business should
be maintained. The Board is committed to supporting the
Executive Directors to manage and operate the business in a
way that supports the Group’s long-term sustainable success.
The Board is also immensely proud of the Group’s
commitment to environmental, social and governance
matters, and its dedication to sustainability is prevalent
in all of its operations. We are proud to announce that
our emissions targets for near-term and long-term net
zero emissions have been validated and approved by the
Science Based Targets initiative, which demonstrates our
clear intention to deliver direct climate action through the
decarbonisation of our operations, supply chain and our
products in use. How we put sustainability into practice is
described on pages 48 to 89.
Board changes
I was appointed as a Non-executive Director on 1 July 2023
and I had the honour of taking the role of Board Chair from
26 July 2023. I am delighted to have joined the Board and be
part of the future growth of the Group.
Thomas Willcocks was appointed to the Board as Chief
Executive Officer following Nick Kelsall’s retirement, effective
1 April 2023.
As previously announced, we have further strengthened
the Board with the addition of Rebecca DeNiro as a
Non-executive Director, effective 1 July 2024. Brief biographies
of the Board members can be found on pages 128 and 129.
We believe that our organisational
structure and governance
framework enables us to operate
effectively and positions us well
to continue to deliver sustainable
growth for the benefit of all of
our members.”
STEVE GOOD
Chair
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024132
CORPORATE GOVERNANCE
CHAIR’S INTRODUCTION
Culture and people
The Board places great importance on employee
engagement. We do this in a direct manner, with the Board
members attending meetings at our operational centres,
and specifically by Alison Littley, our Non-executive Director
with responsibility for employee engagement, meeting
regularly with representatives from each of our brands. At
these forums, the Board, through Alison, gets feedback and
interaction with our colleagues across the Group. The Board
also receives and reviews the results of employee surveys and
other measures of the attitudes and culture of our people.
The Board understands its obligation to ensure that Norcros
has a clear purpose and values, and it works to ensure these
are communicated throughout the Group and that our
policies and procedures are aligned to them.
Diversity
The Board values diversity, and the position of Senior
Independent Director is held by Alison Littley, satisfying one
of the three diversity targets set by the Financial Conduct
Authority. The remaining targets, to have at least 40%
female representation and one Board member from an ethnic
minority background, will form part of the Board’s recruitment
and succession planning for future years. The appointment
of Rebecca DeNiro, effective 1 July 2024, increases the
percentage of females on the Board from 20% to 33%.
The Board is also committed to ensuring that the Group
provides a diverse and inclusive working environment. As at
31 March 2024, the proportion of women in employment
across the Group was 33%. One of our strategic priorities,
driven by our Chief People Officer, is to improve diversity
across the Group at all levels. More information can be found
in the Chief People Officer’s Review on pages 44 to 47.
Our commitment to engaging
with stakeholders
The Board’s understanding of the interests of the Group’s
stakeholders underpins decision making at a Board level and
throughout the Group. Information on how we engage with
our stakeholders is set out on pages 118 to 123.
Strategy
The Board held its annual strategic planning event over two
days in July 2023 to discuss the revised strategy for the Group
over the short, medium and long term. This was an excellent
opportunity for all the management teams across the Group
to discuss the strategic priorities of each of our brands and,
for the first time, all teams were present for each discussion.
The days consisted of open and engaging discussions on
many areas, including the market challenges and growth
opportunities. Since that strategy event, the Board has
worked with the Group’s Executive Management to update
the Group’s strategy, which is set out on pages 26 to 29.
Conclusion
I hope that you will find the information in this report helpful
in understanding our approach to governance and how we
have applied the Principles of the UK Corporate Governance
Code. We believe that our organisational structure and
governance framework enables us to operate effectively and
positions us well to continue to deliver sustainable growth for
the benefit of all of our members.
STEVE GOOD
Chair
12 June 2024
The Board is committed to ensuring that high standards
of corporate governance are maintained by Norcros plc.
For the year under review, the Company has complied
with the 2018 UK Corporate Governance Code save for
the matters referred to on page 136.
Division of Responsibilities
READ MORE IN THE CORPORATE GOVERNANCE
REPORT ON PAGES 136 TO 139
Board Leadership and Company
READ MORE IN THE CORPORATE GOVERNANCE
REPORT ON PAGES 136 TO 139
Composition, Succession and Evaluation
READ MORE IN THE NOMINATION COMMITTEE
REPORT ON PAGES 146 TO 148
Audit, Risk and Internal Control
READ MORE IN THE AUDIT AND RISK COMMITTEE
REPORT ON PAGES 140 TO 145
Remuneration
READ MORE IN THE REMUNERATION COMMITTEE
REPORT ON PAGES 150 TO 170
Code Compliance
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 133
CORPORATE GOVERNANCE
This year has seen significant events for the Company and
its Board.
STRATEGIC DEVELOPMENT
• Formulation and finalisation of our updated strategy
• Executive Management transition
• Progressing ESG agenda
BOARD COMPOSITION
• Appointment and induction of new Board Chair
• Appointment of new Senior Independent Director
• Recruitment of additional Non-executive Director
What was on the Board’s agenda this year
Governance in Action – Employee Engagement at Croydex
The Board values regular engagement with employees
throughout the Group. Alison Littley, Senior Independent
Director, has specific responsibility for employee engagement,
and meets with representatives from Norcros brands regularly
throughout the year.
One such visit was to Croydex, our bathroom accessories
brand. Alison visited Croydex in Andover, Hampshire, in
March 2024 and met with 12 employee representatives
from across the business.
The session included people from a range of teams, including:
• Warehouse • Design
• Customer Services • Inventory Manager
• Marketing • Commercial
• IT
The group also covered a wide range of experience with
Croydex, ranging from two weeks to almost 23 years.
In each employee engagement session, Alison asks a
standard set of questions to ensure that she is getting
similar information from each brand across the business,
as well as opening the floor to general discussion so she
can get a sense of key issues.
Topics discussed included culture and feeling valued,
communication, development opportunities, the customer
journey, systems and processes, and more.
Feedback from the session was collated and shared with
Croydex management and with the Norcros Board. A
follow up session will be held later in the year.
Case Study
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024134
CORPORATE GOVERNANCE
GOVERNANCE KEY HIGHLIGHTS
Committee highlights
Audit and Risk Committee
Areas of focus this year:
• Monitoring of key risks and risk
management policies and procedures
• Assessing the effectiveness of the
Group’s internal controls
• Close monitoring of the Group’s
systems and controls for complying
with regulation and detecting and
preventing wrongdoings
• Assessing the proposed revisions to
the 2018 Corporate Governance Code,
dealing with audit and governance
reforms
Nomination
Committee
Areas of focus this year:
• Induction of new
Board Chair
• Identification and
recruitment of an additional
Non-executive Director
• Development of
diversity policy
Remuneration
Committee
Areas of focus this year:
• Embedding and
implementing of new
remuneration policy
• Extending scope of data
available on workforce
remuneration
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 135
CORPORATE GOVERNANCE
Board of Directors
The Board is committed to ensuring that high standards of
corporate governance are maintained by Norcros plc and
is accountable to the Company’s shareholders for good
corporate governance. Its policy is to manage the affairs of
the Company in accordance with the principles of the UK
Corporate Governance Code referred to in the Listing Rules
of the UK Listing Authority. For the year under review, the
Company has complied with the UK Corporate Governance
Code 2018 (the Code) in all respects save for the following
matters concerning David McKeith arising from the illness and
tragic death of Gary Kennedy. These were instances of non-
compliance with provision 24 and 19 respectively.
• David held the role of Chair of the Audit and Risk
Committee whilst also acting as Board Chair. He ceased to
chair and be a member of the Audit and Risk Committee
when Stefan Allanson became Chair of that Committee at
the conclusion of the 2023 AGM; and
• David was appointed as a Director in July 2013. His
directorship therefore exceeded nine years. It was intended
that he would step down from the Board after the 2022
AGM as soon as a new Chair of the Audit and Risk
Committee had been appointed, but David stayed on
as a Director for the reasons given above. David did not
seek re-election at the 2023 AGM, when Steve Good was
appointed as Chair.
A copy of the Code is publicly available from www.frc.org.uk.
The following sections of this statement describe the Board’s
approach to corporate governance and how the principles of
the Code are applied. These sections refer to the year ended
31 March 2024, unless otherwise stated.
Board balance and independence
The Board comprises the Non-executive Chair, two Non-
executive Directors and two Executive Directors. All Directors
are equally responsible for the proper stewardship and
leadership of the Company. The Directors holding office at
the date of this Report and their biographical details are
given on pages 128 and 129. It should be noted that David
McKeith acted as Board Chair until 26 July 2023, which was a
transitional arrangement until Steve Good was appointed as
Chair on 1 July 2023. Stefan Allanson was appointed Chair of
the Audit and Risk Committee on 1 July 2023.
Since the year end, Rebecca DeNiro was appointed as an
additional Non-executive Director, effective from 1 July 2024.
This additional appointment will result in the Board having
three Non-executive Directors.
Taking into account the provisions of the Code, the Chair and
all the Non-executive Directors are considered by the Board to
be independent of the Company’s Executive Management and
free from any business or other relationship that could materially
interfere with the exercise of their independent judgement. The
terms and conditions of appointment of the Board Chair and
the Non-executive Directors are available for inspection at the
registered office of the Company. The letters of appointment
set out the expected time commitment. Other significant
commitments of the Chair and Non-executive Directors are
disclosed to the Board on a regular basis throughout the
year. The Board was satisfied that the Chair’s other significant
commitments did not prevent him from devoting sufficient time
to the Company throughout the year under review.
Governance structure
Alison Littley assumed the role of Senior Independent
Non-executive Director from 1 July 2023. She is available
to shareholders if they have any issues or concerns which
contact through the normal channels of Board Chair, Chief
Executive Officer or Chief Financial Officer has failed to
address or resolve, or for which such contact is inappropriate.
The Board notes that David McKeith was appointed to the
Board in July 2013 and that, in accordance with the Code,
he ceased to be regarded as independent on the ninth
anniversary of his appointment. Notwithstanding this, the
Board regarded Mr McKeith as independent in his approach
and in the performance of his responsibilities. David McKeith
did not seek re-election at the 2023 AGM and in keeping with
the Board’s succession plan, he stepped down from the Board
at the Company’s 2023 AGM following the appointment of
Steve Good from 1 July 2023.
All Directors are supplied, in a timely manner, with all relevant
documentation and financial information to assist them in
the discharge of their duties by the making of well-informed
decisions that are in the best interests of the Company as
a whole. The Board regularly reviews the management and
financial performance of the Company, as well as long-term
strategic planning and risk assessment. Regular reports are
given to the Board on matters such as pensions, health and
safety, and litigation.
Any concerns that a Director may have about how the Group
is being run or about a course of action being proposed by
the Board will, if they cannot be resolved once those concerns
have been brought to the attention of the other Directors
and the Board Chair, be recorded in the Board minutes. In
the event of the resignation of a Non-executive Director, that
Director is encouraged to send a written statement setting
out the reasons for the resignation to the Chair, who will
then circulate it to the other members of the Board and the
Company Secretary.
Board Chair and
Chief Executive Officer
The positions of Chair and Chief Executive Officer are held
by separate individuals and the Board has clearly defined
their responsibilities. The Chair is primarily responsible for the
effective working of the Board, ensuring that each Director,
particularly the Non-executive Directors, is able to make
an effective contribution. The Chief Executive Officer has
responsibility for running the Group’s businesses and for the
implementation of the Board’s strategy, policies and decisions.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024136
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE REPORT
Board, Committee and
Director evaluation
The performance of the Board is appraised by the Chair.
The Executive and Non-executive Directors are evaluated
individually by the Chair. The Board, led by the Senior
Independent Non-executive Director, appraises the Chair, and
the Board evaluates the performance of its three Committees.
Evaluation processes are conducted periodically and they
are organised to fit in with Board priorities and succession
planning activity.
A formal evaluation took place in respect of the year under
review in accordance with the requirements of the Code. This
evaluation was conducted by means of detailed questionnaires,
the results of which were then considered as appropriate,
combined with meetings and discussions. The Chair is
responsible for the review of each Director’s development and
ongoing training requirements to ensure that the performance
of each Director continues to be effective. The overall results of
the evaluation process were satisfactory, and the outcomes of
it indicated the following areas of focus for the Board and its
Committees going forward:
• Succession planning
• Continuing development of remuneration policy
• Alignment of policies to values and strategic objectives
Advice for Directors
Procedures have been adopted for the Directors to obtain
access through the Company Secretary to independent
professional advice at the Company’s expense, where that
Director judges it necessary in order to discharge their
responsibilities as a Director of the Company.
All Directors have access to the advice and services of the
Company Secretary, who is responsible to the Board for
ensuring that Board policies and procedures are complied
with. Both the appointment and removal of the Company
Secretary are matters reserved for decision by the Board.
Board procedures
The Board has a formal schedule of matters specifically
reserved to it for decision, which it reviews periodically. This
ensures the Board makes all major strategy, policy and
investment decisions affecting the Company. In addition, it
is responsible for business planning and risk management
policies and the development of policies for areas such as
safety, health and environmental policies, Directors’ and
senior managers’ remuneration and ethical issues. The Board
provides direction to the management of the Company, and it
is ultimately accountable for the performance of the Group.
The Board operates in such a way as to ensure that all
decisions are made by the most appropriate people in a
timely manner that will not unnecessarily delay progress.
The Board has formally delegated specific responsibilities to
Board Committees, namely the Audit and Risk Committee,
Nomination Committee and Remuneration Committee. The
Terms of Reference of those Committees are published on the
Company’s website at www.norcros.com.
The report of the Audit and Risk Committee is on pages 140
to 145, the report of the Nomination Committee is on pages
146 to 148, and the report of the Remuneration Committee is
on pages 150 to 170.
The Board will also appoint Committees to approve specific
processes as deemed necessary, such as aspects of corporate
transactions, or to authorise share option administrative actions.
The directors and management teams of each Group brand
are responsible for those business entities. They are tasked
with the delivery of targets approved by the Board on
budgets, strategy and policy.
THE BOARD
AUDIT AND RISK COMMITTEE
DAVID McKEITH
(Acting Board Chair until 26 July 2023)
STEVE GOOD
(Chair from 26 July 2023)
STEFAN ALLANSON
(Chair from 1 July 2023)
DAVID McKEITH
(Chair until 30 June 2023)
ALISON LITTLEY
REMUNERATION COMMITTEE
ALISON LITTLEY (C)
STEVE GOOD
(From 1 July 2023)
DAVID McKEITH
(Until 30 June 2023)
STEFAN ALLANSON
NOMINATION COMMITTEE
STEVE GOOD
(Chair from 1 July 2023)
DAVID McKEITH
(Acting chair until 30 June 2023)
ALISON LITTLEY
STEFAN ALLANSON
Governance structure
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 137
CORPORATE GOVERNANCE
Directors’ roles
The Executive Directors work solely for the Group. However,
in appropriate circumstances, Executive Directors are
encouraged to take on one non-executive directorship in
another non-competing company or organisation. The Chief
Executive Officer and the Chief Financial Officer currently
hold no non-executive directorships.
The terms and conditions of appointment of the Non-
executive Directors are available upon written request from
the Company. All the Non-executive Directors confirm that
they have sufficient time to meet the requirements of their
role. They also confirm to disclose to the Company their other
commitments and to give an indication of the time involved in
each such commitment.
The annual evaluation process includes an assessment of
whether the Non-executive Director is spending enough time
to fulfil their duties. If a Non-executive Director is offered an
appointment elsewhere, the Board Chair is informed before
any such offer is accepted and the Chair will subsequently
inform the Board.
The Board has suitable procedures in place for ensuring that its
powers to authorise conflict situations are operated effectively.
Such powers are operated in accordance with the Company’s
Articles of Association by means of each Director having a
responsibility to notify the Board of any conflict situation and
for the Board to deal with that situation as appropriate.
The Board ensures that all new Directors (including Non-
executive Directors) will receive a full, formal and tailored
induction on joining the Company. As part of that induction
procedure, the Chair will ensure that major shareholders have
the opportunity to meet a new Non-executive Director. The
Chair also periodically assesses the training and development
needs of all Directors and ensures that any suitable training
and updates are provided to Directors. Further information
about the induction process can be found in the Nomination
Committee Report on pages 146 to 148.
Retirement by rotation
Each of the Directors is subject to election by shareholders
at the first Annual General Meeting after their appointment.
Thereafter, in accordance with the Company’s Articles of
Association, all of the Directors are subject to retirement by
rotation such that one third of the Directors retire from the
Board each year and each Director must seek re-election at
intervals of no more than three years. However, the Board has
decided that every Director should, where appropriate, offer
themselves for re-election at each Annual General Meeting.
Accordingly, each continuing Director will seek re-election at
the next Annual General Meeting. Biographical details of all
of the Directors are set out on pages 128 and 129 and on the
Company’s website at www.norcros.com.
Financial reporting
When releasing the annual and interim financial statements the
Directors aim to present a fair, balanced and understandable
assessment of the Group’s results and prospects. The Directors
have a collective responsibility for the preparation of the
Annual Report and Accounts, which is more fully explained in
the Statement of Directors’ Responsibilities on page 175.
Relations with shareholders
The Company recognises the importance of maintaining
good communications with shareholders. The Company
actively engages with shareholders on specific matters and
takes a number of other steps to ensure that the Board
and, in particular, the Non-executive Directors, develop an
understanding of the views of major shareholders about
the Company. Directors have regular meetings with the
Company’s major shareholders and receive regular feedback
on the views of those shareholders through the Company’s
brokers. Reports of these meetings, and any shareholder
communications during the year, are given to the Board.
In addition, the Company publishes any significant events
affecting the Group and updates on current trading. The
Board Chair and the Non-executive Directors are also offered
the opportunity to attend meetings with major shareholders
and the Non-executive Directors, and, in particular, the
Senior Independent Director, would attend such meetings if
requested to do so by any major shareholder. Such meetings
took place when Steve Good became Board Chair.
The Board regularly receives copies of analysts’ and brokers’
briefings. The Annual and Interim Reports, together with all
announcements issued to the London Stock Exchange, are
published on the Company’s website at www.norcros.com.
The Notice of the Annual General Meeting is sent to
shareholders at least 20 working days before the meeting. It
is the Company’s practice to propose separate resolutions on
each substantially separate issue.
For each resolution, proxy appointment forms should provide
shareholders with the option to direct their proxy to vote
either for or against the resolution or to withhold their vote.
The Company ensures that all valid proxy appointments
received for general meetings are properly recorded and
counted. For each resolution, the Company ensures that
the following information is given at the meeting and made
available as soon as reasonably practicable on a website that
is maintained by, or on behalf of, the Company:
• The date of the meeting
• The text of the resolution
• The number of votes validly cast
• The proportion of the Company’s issued share capital
represented by those votes
• The number of votes cast in favour of the resolution
• The number of votes against the resolution
• The number of shares in respect of which the vote
was withheld
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024138
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE REPORT
CONTINUED
The Board Chair seeks to arrange for the Chairs of the Audit
and Risk, Nomination and Remuneration Committees (or a
deputy if any of them is unavoidably absent) to be available
at the Annual General Meeting to answer any questions
relating to the work of these Committees.
Accountability and audit
The respective responsibilities of the Directors and auditor
in connection with the financial statements are explained
in the Statement of Directors’ Responsibilities on page 175
and the Auditor’s Report on pages 178 to 186. The Directors
ensure the independence of the auditor by requesting annual
confirmation of independence, which includes the disclosure
of all non-audit fees.
Risk management and internal control
The Board is responsible for the Group’s system of internal
control and for reviewing its effectiveness (covering all
material controls, including financial and operational risk
management and compliance). This is undertaken via an
annual program to review the internal control environment at
each brand. Each review is carried out by the Group Head of
Internal Audit and Risk Assurance, who is independent of that
brand. The results of these reviews are communicated to the
Audit and Risk Committee.
The Board has carried out a robust assessment in order to
identify and evaluate what it considers to be the principal
risks faced by the Group and has also assessed the adequacy
of the actions taken to manage these risks. This process has
been in place for the period under review and up to the date
of the approval of the Annual Report and Accounts. The
principal risks are disclosed on pages 106 to 117.
The Group’s insurance continues to be managed and co-
ordinated centrally with the assistance of insurance brokers.
This gives the Group full visibility of both claims history and
the insurance industry’s perception of the Group’s overall
risk via the respective insurance premiums. The Company
examines the size and trend of these premiums and the
extent to which it can mitigate the risk and reduce the overall
risk burden in the business by considering the appropriate
level of insurance deductible and the potential benefit of self-
insurance in some areas.
Viability
In accordance with the Code, the Board has assessed the
prospects of the Company, using a three-year assessment
timescale, and concluded that there is a reasonable
expectation that the Company will be able to meet its
liabilities and continue in operation. The full Viability
Statement is contained on page 117.
Operational structure, review
and compliance
In addition to the Chief Financial Officer, the Group has
Senior Financial Managers at its Head Office. The current
Group Head of Internal Audit and Risk Assurance was
appointed in March 2020 and he is responsible for the
Internal Audit and Risk Assurance function for the Group.
Further information on the work of this function is in the Audit
and Risk Committee Report on pages 140 to 145.
The key elements of the controls framework within which the
Group operates are:
• an organisational structure with clearly defined lines
of responsibility, delegation of authority and reporting
requirements;
• an embedded culture of openness of communication
between operational management and the Company’s
Executive Management on matters relating to risk
and control;
• defined expenditure authorisation levels; and
• a comprehensive system of financial reporting. An annual
budget for each brand is prepared in detail and approved
by the Group Executive Management. The Board approves
the overall Group’s budget and plans. Monthly actual
results are reported against budget and the prior year and
the forecast for the year is revised where necessary. Any
significant changes and adverse variances are reviewed by
the Board and remedial action is taken where appropriate.
There is weekly cash and treasury reporting to the Chief
Financial Officer and periodic reporting to the Board on
the Group’s tax and treasury position.
The system of internal control is designed to manage,
rather than eliminate, the risk of failing to achieve business
objectives and can only provide reasonable, not absolute,
assurance against material misstatement or loss. It is tested
and developed as appropriate by the Group Head of Internal
Audit and Risk Assurance working in conjunction with the
Audit and Risk Committee.
The control framework as outlined above gives reasonable
assurance that the structure of controls in operation is
appropriate to the Group’s situation and that risk is kept to
acceptable levels throughout the Group.
Takeover directive
Share capital structures are included in the Directors’ Report
on pages 172 to 174.
Approved by the Board of Directors on 12 June 2024 and
signed on its behalf by:
STEVE GOOD
Board Chair
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 139
CORPORATE GOVERNANCE
Members
During the year to 31 March 2024, the Committee has consisted of
Stefan Allanson, Alison Littley and David McKeith. Biographies of all
members of the Committee appear on pages 128 and 129.
The Chair of the Committee, Stefan Allanson, is considered to
have recent and relevant financial experience as he is a qualified
accountant with extensive financial leadership experience and he is
currently the chief financial officer of MJ Gleeson plc.
The Board is satisfied that the Committee has the appropriate level of
expertise to fulfil its Terms of Reference. The Committee reviewed its own
Terms of Reference, performance and constitution during the year.
Responsibilities
The Committee’s Terms of Reference are in compliance with the UK
Corporate Governance Code 2018 and provide full details of its role
and responsibilities. A copy can be obtained from the Company’s
website, www.norcros.com.
The Committee is a sub-committee of the Board whose main
responsibilities include:
• monitoring the integrity of the financial statements of the Company
and any formal announcements relating to the Company’s
financial performance, and reviewing significant financial reporting
judgements contained in them;
• providing advice (where requested by the Board) on whether the
Annual Report and Accounts, taken as a whole, is fair, balanced
and understandable, and provides the information necessary for
shareholders to assess the Company’s position and performance,
business model and strategy;
• reviewing the Company’s internal financial controls and internal
control and risk management systems;
• monitoring and reviewing the effectiveness of the Company’s
Internal Audit and Risk Assurance function;
• at the appropriate time, conducting the tender process and
making recommendations to the Board about the appointment,
re-appointment and removal of the external auditor, and approving
the remuneration and terms of engagement of the external auditor;
• reviewing and monitoring the external auditor’s independence and
objectivity;
• reviewing the effectiveness of the external audit process, taking into
consideration relevant UK professional and regulatory requirements;
• developing and implementing policy on the engagement of the
external auditor to supply non-audit services, ensuring there is prior
approval of non-audit services, considering the impact this may
have on independence, taking into account the relevant regulations
and ethical guidance in this regard, and reporting to the Board on
any improvement or action required; and
• reporting to the Board on how it has discharged its responsibilities.
STEFAN ALLANSON
Chair of the Audit and Risk
Committee
Other members during the year:
• Alison Littley
• David McKeith
(Chair until 30 June 2023)
Meetings held:
The Committee met three times during
the year.
Key activities for 2024:
• Monitoring of key risks and risk
management policies and procedures
• Assessing the effectiveness of the
Group’s internal controls
• Close monitoring of the Group’s
systems and controls for complying
with regulation and detecting and
preventing wrongdoings
• Assessing the proposed revisions
to the 2018 Corporate Governance
Code, dealing with audit and
governance reforms
Areas of focus for 2025:
A continued focus on developing the
risk management framework, ensuring
internal controls remain effective
and further assessment of the 2024
Corporate Governance Code.
Monitoring the Company’s reporting and risk management
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024140
CORPORATE GOVERNANCE
AUDIT AND RISK COMMITTEE REPORT
Significant financial reporting matters
in the 2024 Annual Report
The significant financial reporting matters that the Committee
considered in the year are detailed below:
Going Concern and Viability Statement
The Group has prepared a Going Concern and Viability
Statement reflecting the potential impact of principal risks
and uncertainties, including a situation similar in nature to the
COVID-19 pandemic, on liquidity and solvency. This has been
performed by modelling a reasonable worst-case scenario
and then applying a reverse stress test on the Group’s current
forecasts. Further details are included on page 117 and on
page 191.
The Committee, alongside the Board, has reviewed and
considered the detailed forecast scenarios and agrees with
management’s conclusions.
Defined benefit pension scheme
The Group’s UK defined benefit pension scheme is significant
both in terms of its context in the overall Balance Sheet and
the results of the Group. The Group’s UK defined benefit
pension scheme (as calculated under IAS 19R) shows a
surplus of £16.5m at 31 March 2024 from a surplus position of
£14.9m at 31 March 2023.
The valuation of the present value of scheme liabilities
involves significant judgement and expertise, particularly
in respect of the assumptions used. In order to value the
liabilities, management has engaged an independent firm
of qualified actuaries, Isio. The Committee reviewed the
outputs from this work and benchmarked the assumptions,
particularly the net discount rate, with those applied by
other companies with defined benefit pension schemes with
similar characteristics and having the same measurement
date. The Committee concurred with the assumptions put
forward by management to value the liabilities.
The Committee considered the approach and judgement
taken by management in determining the value of the surplus
and concurred with management’s view.
Sale of Johnson Tiles UK
As part of its consideration of how the Group has accounted
for the post-year end sale of Johnson Tiles UK, the Committee
reviewed management’s assessment of the impact at
31 March 2024. The Committee has experience of reviewing
the carrying value of assets from the impairment reviews
performed in previous years and of the considerations of
IFRS 5 from the closure of Norcros Adhesives. The Committee
reviewed a paper by management and challenged the
conclusions regarding held for sale and discontinued
operations. As the Group was not committed to the sale
of the business at the year end, in accordance with IFRS 5,
the Johnson Tiles UK business was not classified as held for
sale or discontinued, and no adjustments were made to the
carrying value of its current assets in 2024.
In conducting these reviews, the Committee considered
the work and recommendations of the Company’s finance
function and received reports from the Company’s external
auditors on its findings.
Fair, balanced and understandable
The Committee formally reviews the Company’s annual and
interim financial statements and associated announcements,
and considers significant accounting principles, policies
and practices and their appropriateness, financial reporting
issues and significant judgements made, including those
summarised above.
The Committee also advises the Board on whether it
considers that the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable, and provides
the necessary information for shareholders to assess the
Company’s financial position and performance, strategy and
business model.
The Committee concluded that these disclosures, and the
processes and controls underlying their production, meet the
latest legal and regulatory requirements for a listed company
and that the 31 March 2024 Annual Report and Accounts are
fair, balanced and understandable.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 141
CORPORATE GOVERNANCE
Meetings of the Committee
The Committee met formally three times during the year
ended 31 March 2024. By invitation, the Board Chair, Chief
Executive Officer, Chief Financial Officer, Company Secretary,
Group Head of Internal Audit and Risk Assurance and Group
Financial Controller also attended each of these meetings
together with the engagement partner and other members of
the audit team from the external auditor.
The Committee may invite other individuals either from
within the Company or external technical advisors to attend
meetings to provide information or advice as it sees fit.
At each meeting, the Committee had the opportunity to
discuss matters with the external and internal auditor without
management being present. The Chair of the Committee
also has regular discussions with the external audit partner
outside of the formal Committee process. The Head of
Internal Audit and Risk Assurance has independent access to
the Chair of the Audit and Risk Committee as required.
At each of its meetings, the Committee reviews any financial
communications issued to the market.
Principal activities of the Audit and Risk Committee during the year
A wide variety of issues were addressed in the year; they are summarised in the table below:
Area Activities
Financial
reporting
• Review of the Company’s trading updates and other financial communications
• Review of the Company’s interim results for the six months ended 30 September 2023
• Review of the Company’s Annual Report and Accounts for the year ended 31 March 2024,
including consideration of:
– significant financial reporting matters;
– whether the Annual Report and Accounts are fair, balanced and understandable; and
– the requirements of the going concern assessment and Viability Statement
• Review of changes to corporate reporting requirements
• Review of the post-year end sale of Johnson Tiles UK
External audit
• Review of the external auditor’s proposed audit work plan for the year ended 31 March 2024,
including its assessment of the principal financial reporting risks
• Review of the external auditor’s terms of engagement and proposed fees
• Assessment of the external auditor’s independence, objectivity, qualifications and expertise,
including a review of its internal quality control checks
• Review of the findings from the external audit for the year ended 31 March 2024
Internal audit
• Review of the internal audit work program for 2024
• Approval of the annual internal audit program for 2025
• Review of current internal audit resource levels
• Assessment of the work carried out to test and review internal controls and cyber security, together
with the status of recommendations made and actions agreed
• Review of findings and agreed actions arising from internal audit assignments
Compliance
• Review of the whistleblowing log
• Review of the fraud and attempted fraud log
• Review of the data protection log including data incidents, data subject access requests, etc.
Risk
management
• Review of the Group’s reported principal risks and uncertainties including consideration of any new
or emerging risks and uncertainties identified and amendment of current principal risks as required
• Review of the actions taken by the Group to manage its principal risks with continued focus on
cyber security risks, including new Group Information Security Standards and the procurement of a
Managed Detection and Response service, and ESG risks, such as climate change targets
Governance
• Conducted an appraisal of the performance of the Committee
• Review of the Group’s policy in respect of the employment of former employees of the external auditor
• Review of the Group’s policy in respect of the engagement of the external auditor for non-audit
services and non-audit services provided by the external auditor during the year
• Review of the Committee’s Terms of Reference and constitution in line with current best practice
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024142
CORPORATE GOVERNANCE
AUDIT AND RISK COMMITTEE REPORT
CONTINUED
Internal audit framework
The Group has a dedicated Group-wide Internal Audit
and Risk Assurance function that is led by an experienced
Group Head of Internal Audit and Risk Assurance. This role
is supported by a small dedicated internal audit team based
in South Africa focused on the particular risks faced by the
Group’s retail and manufacturing operations in South Africa.
Internal audit resources are kept under constant review to
ensure an appropriate level of independent assurance is
obtained by the Committee.
The Group operates a rolling 12-month audit plan prepared
by the Group Head of Internal Audit and Risk Assurance.
The plan is risk based using assessments carried out by the
Group, includes senior management input and is reviewed
and approved by the Committee. At each meeting, the
Committee considers the results of the audits undertaken
during the preceding period and the adequacy of
management’s response to matters raised. Additionally, the
related mitigations against issues and actions raised from
these audits are systematically followed up in subsequent
Committee meetings until they are adequately resolved.
The Group control and risk self-assessment questionnaires,
which are completed annually by each business unit and
cover financial and information security controls, are reviewed
by the Group Head of Internal Audit and Risk Assurance
and the Group Financial Controller. The self-assessment
process includes a management representation requiring
senior managers at each division, as well as at the Group’s
central office, to confirm that they have applied and followed
all required policies and procedures in the year. Key control
issues that arise from these reviews are raised with the
Committee, with the results of the assessments informing the
audit plan and individual audit engagements.
Group Internal Audit and Risk
Assurance activities during the year
The Group Internal Audit and Risk Assurance team provided
assurance across a wide range of risks during the year, in
line with the standards set out in the approved audit charter.
The annual audit plan, which is approved by the Committee,
included business reviews of operational units, assessing the
effectiveness of key internal controls in place over selected
systems and processes, which, this year, included rebates
and discounts, intellectual property rights and an assessment
of the Group’s compliance with the revised UK Corporate
Governance Code 2024. In South Africa (SA), the primary
focus was on the controls in place at retail outlets with
completion of a cycle of operational reviews across all stores.
The plan also included SA Head Office financial and other
risk-based reviews in line with the Group audits noted above.
Actions agreed during previous audit visits were reviewed to
confirm management’s progress.
Other key activities of the function during the year included
oversight of the Group’s online awareness training program,
which covers an expansive range of topics including anti-
bribery and corruption, information security, data protection,
cyber security and modern slavery. Training also covers
a range of health and safety and management soft skills
training courses including diversity, equity and inclusion.
During the year, our online cyber security training was
enhanced by the inclusion of perpetual training provided
by a world-class cyber security services provider. The team
also liaises closely with our insurers on a range of risk
management projects including cyber security, incident
response, business continuity and disaster recovery planning,
along with company vehicle driver licence checking and
driver behavioural training.
Internal audit also facilitates the annual control and risk
self-assessment process covering financial and information
security controls and, through audit reviews, it provides
independent assurance that the controls declared by
management are in place and operating effectively.
Summaries of all findings and actions, and updates on all
audit work and other key activities, are provided at each
Audit and Risk Committee meeting.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 143
CORPORATE GOVERNANCE
Risk management framework
Our risk management framework is highlighted on pages
106 and 107 of our Strategic Report. The Audit and Risk
Committee’s role in the risk management framework can be
summarised as:
1. Review of current and emerging risks through the
discussion of identified risks and mitigating actions with
divisional management in annual strategic reviews
2. Annual review of the risk management reporting process
and associated outputs, including principal risks, to ensure
they are robust and effective and include all risks that
could threaten the business model and future strategy
3. Review of the Annual Report to ensure that it provides a
fair reflection of risk assessments undertaken
Internal control and
risk management review
The Board has overall responsibility for the Group’s system
of internal control and risk management and for reviewing
its effectiveness. The internal control systems are designed
to meet the needs of the Group and to manage, rather than
eliminate, the risk of failure to achieve business objectives.
Such systems can only provide reasonable, not absolute,
assurance against material misstatement or loss.
The Committee undertakes a review, at least annually,
of the effectiveness of the Company’s system of internal
controls and risk management and the Board will take
into account the Committee’s Report, conclusions and
recommendations in this regard. The Board confirms that it
has reviewed the effectiveness of the internal control system,
including financial, operational and compliance controls
and risk management in accordance with the UK Corporate
Governance Code 2018, for the period from 1 April 2023 to
the date of approval of the Annual Report and Accounts for
the year ended 31 March 2024.
Fraud and whistleblowing
The Group maintains a whistleblowing policy and engages
two independent confidential whistleblowing service
providers — one covering South Africa specifically and the
other covering all other locations. Reports on the use of these
services, any significant concerns that have been raised,
details of investigations carried out and any actions arising as
a result are reported to the Committee at each meeting.
The Committee also receives papers on incidents of fraud,
or attempted fraud, and reviews them at each meeting.
At least annually, the Committee conducts an assessment
of the adequacy of the Group’s procedures in respect of
compliance, whistleblowing and fraud.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024144
CORPORATE GOVERNANCE
AUDIT AND RISK COMMITTEE REPORT
CONTINUED
External auditor
The Committee has primary responsibility for making
recommendations to the Board on the appointment,
re-appointment and removal of the external auditor. The
Committee keeps under review the scope and results of the
audit and its effectiveness, as well as the independence and
objectivity of the auditor.
The Committee is aware of the need to safeguard the
auditor’s objectivity and independence and the issue is
discussed by the Committee and periodically with the
audit engagement partner from BDO LLP. In accordance
with Auditing Practices Board requirements, external
auditor independence is maintained by the rotation of the
engagement partner every five years. The current audit
engagement partner, Gary Harding, was appointed following
the change of auditor in 2020.
Policies on the award of non-audit work to the external
auditor and the employment of ex-employees of the external
auditor are in place and reviewed annually. Additionally, the
approval of the Chair of the Committee is required prior to
awarding high-value non-audit work to the external auditor,
and the non-audit work planned and performed is monitored
by the Committee at each meeting. There was no non-audit
work awarded to the external auditor during the year.
The external audit starts with the design of a work plan that
addresses the key risks of the audit, which were confirmed at
the March 2024 meeting of the Committee. The Committee
also agreed the terms of engagement and the fees payable
for the engagement. At each meeting, the Committee had
the opportunity to discuss matters with the external auditor
without management being present. The Chair of the
Committee also has regular discussions with the external
audit partner outside the formal Committee process.
For the year ended 31 March 2024, the Committee was
satisfied with the independence, objectivity and effectiveness
of the relationship with BDO LLP as external auditor.
External audit tender and
appointment of auditor
The external auditor, BDO LLP, was appointed at the 2020
AGM in July 2020 following a competitive tender process.
On behalf of the Audit and Risk Committee.
STEFAN ALLANSON
Chair of the Audit and Risk Committee
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 145
CORPORATE GOVERNANCE
Role of the Nomination Committee
The main responsibilities of the Nomination Committee are:
• evaluating the balance of skills, knowledge, independence, diversity and
experience of the Board;
• succession planning for the Board and at senior management level;
• determining the scope of the role of a new Director and the skills and
time commitment required and making recommendations to the Board
about filling Board vacancies; and
• appointing additional Directors.
The Terms of Reference of the Committee are available for inspection upon
written request to the Company and on its website at www.norcros.com.
The Nomination Committee and the Board seek to maintain an appropriate
balance between the Executive and Non-executive Directors. The
Nomination Committee is chaired by the Chair of the Board and consists
of all the Non-executive Directors. The Board Chair will not chair the
Committee when it deals with the appointment of a successor to that role.
During the year under review, the Nomination Committee dealt with the
appointment of a new Chair, Steve Good, and ensured that he received
an appropriate induction to the Group. The Nomination Committee also
ensured that Stefan Allanson, who joined the Board in January 2023,
received support from David McKeith before Stefan took the position of
Audit and Risk Committee Chair.
Board appointments
Board Chair: The Committee, led by David McKeith as Acting Chair of the
Nomination Committee, undertook an in-depth and wide-ranging search
process to appoint a new Board Chair to replace Gary Kennedy, who sadly
passed away on 13 February 2023.
On 30 May 2023, the Committee was pleased to recommend to the Board
that Steve Good be appointed as a Non-executive Director and Chair
Designate, effective from 1 July 2023. At the conclusion of the 2023 Annual
General Meeting, Steve Good became Board Chair.
The Committee surveyed the market with an executive search agent
(Independent Search Partnership LLP) and agreed that Steve was the
most suitable candidate for the role. Steve Good brings proven business
leadership credentials and a broad range of experience to the business.
This skillset was particularly important as the change in Board Chair
occurred at a time when the new Chief Executive Officer, Thomas
Willcocks, had recently started in his role.
Since the year end, the Committee has dealt with the appointment of an
additional Non-executive Director and, as announced on 24 May 2024,
Rebecca DeNiro will take office from 1 July 2024.
Committee changes
As previously communicated, David McKeith did not seek re-election at the
2023 Annual General Meeting. Stefan Allanson took over as Chair of the
Audit and Risk Committee from 1 July 2023. Alison Littley took the role of
Senior Independent Director from 1 July 2023.
STEVE GOOD
Chair of the Nomination
Committee
Other members:
• Alison Littley
• Stefan Allanson
Meetings held:
The Committee met four times during
the year.
Key activities for 2024:
• Appointment of Steve Good as
Chair effective from 1 July 2023
• Appointment of Stefan Allanson
as Chair of the Audit and
Risk Committee
• Appointment of Thomas Willcocks
as Chief Executive Officer effective
from 1 April 2023
Areas of focus for 2025:
• Lead the induction process for
Rebecca DeNiro, our new Non-
executive Director
• Continue with succession
planning throughout the senior
management of the Group
• Progress diversity initiatives for
both gender and ethnicity
Evaluating the Board and succession planning
for a sustainable future.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024146
CORPORATE GOVERNANCE
NOMINATION COMMITTEE REPORT
Board composition
The Nomination Committee also evaluates the balance of
skills, knowledge, diversity and experience of the Board. If a
new appointment to the Board is required, the Committee
will use the appropriate selection process and will determine
the scope of the role of a new Director and the skills and
time commitment required and make recommendations to
the Board about filling Board vacancies and appointing
additional Directors.
Board performance evaluation
Process – a formal evaluation took place in the year
in accordance with the requirements of the Code. This
evaluation was conducted through detailed questionnaires.
The outcomes of it indicated the following areas of focus for
the Nomination Committee:
• Succession planning
• Promotion of diversity
Diversity and inclusion
In selecting candidates, due regard will be given to the
balance of the Board, to the benefits of different backgrounds
and experience, and to diversity on the Board, including
gender. The Board does not currently set targets for Board
diversity; however, appointments will be made in accordance
with the Group’s diversity and inclusion policy, on the basis
of merit and the most appropriate experience against
objective criteria in the best interests of shareholders. The
Board endeavours to ensure that these principles are applied
throughout the Group.
The Committee is pleased to note the progress with the
improved diversity of the Executive Management of the
Group, of which 40% are female (2023: 0%).
Compliance with Listing Rules on diversity
In 2022, the UK Financial Conduct Authority introduced Listing Rules relating to diversity (LR 9.8.6R(9) and (10), and
LR 14.3.33R(1)). The Company’s position against these items is set out within this report below.
Listing Rule target
Company’s position
as at 31 March 2024 Comment
At least 40% of the Board
are women.
20% Our aspiration is to achieve 40% gender diversity, recognising
that it requires a careful and measured approach to
accommodate Board attrition, whilst maintaining the existing
profile of desired skills and experience. The appointment of
Rebecca DeNiro, with effect from 1 July 2024, will improve our
gender diversity to 33%.
At least one of the senior Board
positions (Chair, Chief Executive
Officer, Senior Independent Director
or Chief Financial Officer) is a woman.
One position meets
this target.
With effect from 1 July 2023, Alison Littley took on the role of
Senior Independent Director, which meant that this target was
met from that point. Going forward, the intention is to take this
target into consideration as part of succession planning.
At least one member of the Board is
from a minority ethnic background
(which is defined by reference to
categories recommended by the UK
Office for National Statistics).
No Board members
meet this target.
The Board continues to take ethnic diversity into account when
considering appointments, as per its Diversity Policy, whilst
noting it will continue to consider diversity of the Board and the
Group as a whole based on our global footprint and operations,
in a way which is best aligned with our growth agenda. Being
an international company, we naturally reflect many different
nationalities in the Board and senior management. This is a
valuable input to ensure different cultures are represented within
decision makers, warding against groupthink.
TABLE 1: REPORTING TABLE ON SEX/GENDER REPRESENTATION
Number of
Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
Management
Percentage of
Executive
Management
Men 4 80% 3 3 60%
Women 1 20% 1 2 40%
Not specified/prefer not to say n/a — — — —
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 147
CORPORATE GOVERNANCE
TABLE 2: REPORTING TABLE ON ETHNICITY REPRESENTATION
Number of
Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
Management
Percentage of
Executive
Management
White British or other
White (including minority
White groups)
5 100% 4 5 100%
Mixed/multiple ethnic groups — — — — —
Asian/Asian British — — — — —
Black/African/Caribbean/
Black British
— — — — —
Other ethnic groups,
including Arab
— — — — —
Not specified/prefer not to say — — — — —
Notes to the tables:
1
Data collection of the Board undertaken as part of our regular year end data collection.
2
The Board were provided with the categories above and asked to advise how they identify.
3
The personal data has been collected once and it will be up to the individual to advise of any change.
Succession planning
In the year under review, the Committee has, in addition to
its routine responsibilities, continued to focus on succession
planning issues, and it is satisfied that there are appropriate
plans in place for succession planning for Board members and
senior management across the Group.
Induction process summary
Following successful appointment to the Board, new Directors
receive a comprehensive and tailored induction program.
The induction program facilitates their understanding of
the Group, its strategy and the key drivers of business
performance. It also gives an opportunity for the Directors to
meet key members of the senior management team in the UK
and South Africa and undertake site visits. The induction also
includes dedicated time with each Board member.
Induction process example – Steve Good
In August 2023, following his appointment as Board Chair,
Steve Good completed an eight-day induction with the
Group. This included a visit to each of the seven UK brands
and a trip to our brands in South Africa, including store
visits to our Tile Africa stores. The induction also included an
introduction to senior leadership, strategy and the Group’s
values and culture.
STEVE GOOD
Chair of the Nomination Committee
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024148
CORPORATE GOVERNANCE
NOMINATION COMMITTEE REPORT
CONTINUED
Q & A
with Steve Good, our new Chair
Q
As the new Chair, what were your
initial observations about Norcros?
A
I was drawn to the business for three key reasons:
1. It is a really attractive business, with excellent
market position, great brands and outstanding
design and customer service;
2. The ability of the business to drive value and
scale through a balanced growth agenda; and
3. The people. The people in Norcros have ambition,
motivation, enthusiasm and enormous talent to
pursue the opportunities and deliver them.
Since joining Norcros, every interaction I have had
has reinforced these observations.
Q
Where do you see the
biggest opportunities?
A
Norcros has a clear growth strategy, which can build
on the resilience and performance of our existing
business. The Executive management team and
all the people throughout the Group are clearly
passionate about their work and driven towards
continuous improvement.
Q
The Board appointed Rebecca
DeNiro as an additional Non-
executive Director starting 1 July
2024 – why was the decision made
to bring in an additional Director?
A
The Board is committed to ensuring that
high standards of corporate governance are
maintained and values a breadth of experience
and perspectives. Rebecca DeNiro has a wealth
of relevant experience in consumer brands such
as Dyson and Regatta and will further strengthen
our Board and help support Norcros’ ambitious
growth plans.
The Board seeks to maintain an
appropriate balance of skills,
knowledge, diversity and experience
in order to effectively govern and to
further the Group’s strategic objectives.”
STEVE GOOD
Chair
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 149
CORPORATE GOVERNANCE
ALISON LITTLEY
Chair of the Remuneration
Committee
Other members:
• Steve Good
• Stefan Allanson
Meetings held:
The Committee met four times
during the year.
Key activities for 2024:
• Secured strong support at the
2023 Annual General Meeting
for the Directors’ remuneration
policy (96.7% in favour)
• Ensured that the
implementation of pay policies
meets the Group’s objectives
Areas of focus for 2025:
• Setting targets for
Executive remuneration
that align to the Group’s
business strategy
• Reviewing wider workforce
remuneration and related
policies
Attracting and retaining top talent with remuneration that is
consistent and fair
Role of the Remuneration Committee
The main responsibilities of the Remuneration Committee (the Committee) are:
• determining the remuneration policy and keeping it under review, including
consulting with, and obtaining approval from, shareholders as appropriate;
• implementing the approved remuneration policy as regards to Executive
Director remuneration, benefits and incentives, including the setting of
targets and determination of payouts of all incentive arrangements;
• ensuring alignment of the remuneration structure for senior executives
to the Executive Directors’ remuneration policy, including approval of
changes to packages;
• reviewing the Executive Directors’ remuneration policy and the approach to
implementation, in the context of pay policies and practices across the wider
workforce, and the Group’s culture; and
• preparing the Annual Report on Remuneration, to be approved by the
members of the Company at the Annual General Meeting.
Dear shareholders,
On behalf of the Board, I am pleased to present the Directors’ Remuneration
Report for the year ended 31 March 2024.
The Committee continues to review the Group’s approach to remuneration, to
ensure it is:
• fit for purpose;
• competitive without being excessive;
• able to incentivise and fairly reward delivery of our short- and longer-term
ambitions; and
• cascaded appropriately throughout the Group.
Following last year’s triennial review of the Executive Directors’ remuneration
policy and the leadership transition at the start of the year, the Committee’s
focus over the past 12 months has been on ensuring that the implementation
of our pay policies across the Group continue to meet the objectives outlined
above. I hope this Report clearly explains how we have carried out these
activities for the year in review, in addition to the current financial year.
Directors’ remuneration policy
The Committee welcomed shareholders’ strong support at the 2023 Annual
General Meeting for the resolution to approve the Directors’ remuneration policy.
96.7% of votes were cast in favour of our proposed policy, which came into effect
from the date of the 2023 Annual General Meeting, and included two changes:
• Raising the Approved Performance Share Plan (APSP) award limit from
100% to 150% of salary for the Chief Executive Officer, and to 125% of salary
for the Chief Financial Officer.
• Permitting non-financial measures to be introduced to the APSP scorecard.
Such flexibility, if used, is capped at 25% of the APSP award opportunity.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024150
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT
The changes were proposed in order to retain an appropriate
degree of flexibility for the Committee to evolve its approach
over time, thus ensuring it could continue to appropriately
incentivise the delivery of the Group’s short and longer-term
strategy. Accordingly, no changes to the policy are being
proposed at this year’s Annual General Meeting.
The performance context for
remuneration in the year
As reported earlier in this Annual Report, performance
outcomes for the year in review include:
• strong execution of strategy;
• full year revenue of £392.1m (2023: £441.0m), 11.1% lower
than prior year on a reported basis and 6.0% lower on
a constant currency like for like basis after adjusting for
Grant Westfield and Norcros Adhesives;
• underlying operating profit of £43.2m, 8.7% lower than
prior year (2023: £47.3m);
• the strategic review of the Johnson Tiles UK business; and
• demonstrated resilience of the Group’s business model.
Despite the challenging market conditions faced during the
year ended 31 March 2024, the Group’s underlying business
performance remains robust. This is testament not only to the
commitment and contribution of all of our people, but also
the leadership style and quality of our Chief Executive Officer
and Chief Financial Officer, which underpins continued
progress in the delivery of our strategy.
Remuneration for the year in review
Whilst revisions to the policy were approved at last year’s
Annual General Meeting, we made no changes to our
approach when implementing the policy in the year ended
31 March 2024 compared to previous practice.
Annual bonus
Notwithstanding the continued robust performance
summarised above, the challenging operating profit threshold
set for the annual bonus was not achieved, resulting in no
bonus being payable to the Executive Directors in respect of
the year ended 31 March 2024. In keeping with our normal
practice, the Committee reviewed the outcome in the context
of the Group’s broader underlying performance and the
experience of other stakeholder groups. Following the review,
the Committee concluded not to exercise any discretion to
revise the outcome.
2021 APSP
2021 APSP awards were made in July 2021 and subject to a
three-year aggregate earnings per share (EPS) performance
target (as detailed on page 164). The EPS performance
condition for the 2021 APSP awards was achieved at 49.3%
of maximum. The Committee reviewed the result in the
context of all relevant factors, before approving the formulaic
vesting outcome. Whilst 2021 APSP awards do not vest
until July 2024, the Committee is presently satisfied that no
windfall gains have arisen on these awards, noting in its
assessment that the Company’s share price, which continues
to be impacted by external market conditions, remains below
the grant date share price. The Committee’s assessment of
windfall gains will be reviewed again at the time of vesting.
2023 APSP
Awards for the year in review were made in July 2023 and
challenging EPS targets set (see page 165 for further details).
Remuneration for the year to
31 March 2025
The workforce context
The Committee’s decision making in relation to Executive
Director remuneration continues to be informed by the
Group’s workforce remuneration practices and the decisions
taken by management in this regard. This year, the Committee
has been particularly mindful of the impact on the workforce
of the inflationary environment and associated cost of living
pressures. In this context, the Committee supported the
decision by management to budget for a material cost of
living increase, of circa 4.5% on average across the Group,
and to taper this through the organisation with the highest
percentage increases being awarded to our lowest paid
colleagues. This approach is considered to remain fair and
appropriately reflect the current economic conditions and
their asymmetric impact on different organisational levels of
the Group.
The Executive Directors
The Committee keeps its approach to implementation of
the policy under review, in the context of wider business
performance and the stakeholder experience. The approach
we have resolved to adopt for the year ending 31 March 2025
is as follows:
Base salary
Thomas Willcocks was appointed Chief Executive Officer
effective 1 April 2023. His salary on appointment was set at
£420,000, an 11.8% discount to his predecessor, to balance his
significant previous experience of Norcros with the promotion
to his first FTSE Board role. The Committee disclosed in last
year’s Remuneration Report its intention to keep under review
the salary level in the context of Thomas’ development and
performance in the role, and increase it over time, by more
than the workforce average, if necessary, to an appropriately
competitive level commensurate with his performance
and contribution.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 151
CORPORATE GOVERNANCE
Despite a challenging demand environment, Group
performance in the year ended 31 March 2024 has been
robust across a number of key financial and operational
measures. It is the Committee’s assessment that Thomas
has shown significant development in his role as Chief
Executive Officer over the past 12 months; he has also been
instrumental in delivering outcomes in line with expectations
through ongoing portfolio management and executing
against our strategic priorities. In this context, the Committee
would ordinarily be proposing to increase the Chief Executive
Officer’s salary in line with the intention set out in last year’s
report. However, with input from Thomas, the Committee
concluded not to proceed with a salary increase above
the wider workforce average at the current time in light of
the impact on the results of our South African business of
the particularly challenging conditions in that market, and
acknowledging the cost of living pressures which many
colleagues continue to face. Accordingly, Thomas has been
awarded a 4% salary increase (to £436,800) effective
1 April 2024, below the average awarded across the wider
workforce. However, it remains the Committee’s intention to
award higher salary increases to Thomas in future years to
position his salary at an appropriately competitive level over
time, subject to his and the Group’s sustained performance.
As disclosed last year, the Committee implemented the
second stage of an adjustment to the base salary for James
Eyre, our Chief Financial Officer. With effect from 1 April
2023, this was increased to £320,000. Following this planned
adjustment, the Committee resolved to increase his base
salary by 4% to £332,800 with effect from 1 April 2024. The
adjustment, which is below the average increase awarded
across the wider workforce, recognises James’ continued
strong performance and contribution to the Group.
Pension and benefits
Both Executive Directors receive a pension contribution, or
allowance in lieu, of 8% of salary, in line with the employer
contribution available for the wider UK workforce. Other
benefits consist of a car allowance of £15,000 and private
medical insurance.
Annual bonus
No changes are being proposed to the annual bonus
opportunity, which will remain 100% of salary for the current
financial year. However, in keeping with its approach to keep
under regular review the design of the incentive scorecards,
the Committee has resolved to introduce working capital to
the bonus scorecard. This measure will be weighted 20%, to
balance the existing focus on profit performance (through
continued use of underlying operating profit, to be weighted
80%) with a focus on operational efficiency. To the extent
that they are not considered commercially sensitive at the
time, targets will be disclosed retrospectively in next year’s
Remuneration Report. No other changes are proposed to the
operation of the annual bonus for the current financial year.
APSP
For the year ending 31 March 2025, the Committee proposes
to use a proportion of the APSP headroom introduced to
the policy last year. The Chief Executive Officer’s award
opportunity is being increased to 115% of salary, within the
policy limit of 150% of salary, and the Chief Financial Officer’s
award opportunity to 110% of salary, within the policy limit for
this role, of 125% of salary. The increases in APSP opportunity
are intended to recognise the Executive Directors’ continued
development and valued contribution in the year in review,
through that part of the package which is contingent on
delivery of the Group’s longer-term strategy and aligned most
closely with shareholders’ interests over the next five years, as
covered by the APSP’s performance and mandatory post-
vesting holding periods.
The APSP awards to be granted in 2024 will be based 100%
on three-year EPS growth, with final vesting also subject to
an assessment of the quality of earnings by reference to the
Group’s return on capital employed performance. The targets
attaching to the 2024 APSP cycle will continue to be set to
be stretching, taking into account the award opportunity
when doing so to help ensure that pay outcomes are
commensurate with performance outturns. The rationale for
this approach was explained in last year’s report, and will be
kept under review for future APSP cycles. It is the Committee’s
intention to continue to evolve our APSP scorecard design, to
ensure that this continues to reinforce appropriately the key
drivers and measures of success for the Group and our stated
medium-term goals for these.
Shareholding guidelines
A commensurate increase will be made to the shareholding
guideline applicable to each Executive Director (to 115% of
salary for the Chief Executive Officer, and to 110% of salary
for the Chief Financial Officer).
The Board Chair
The Committee is also responsible for setting the
remuneration of the Board Chair. In doing so, it adopts
a consistent set of principles to those for executive and
workforce remuneration. From 1 April 2024, the Committee
has resolved to increase the Board Chair’s fee by 4%, to
£155,324 per annum.
Concluding remarks
On behalf of the Committee, we hope that we can count
on your support for the resolution to approve this Directors’
Remuneration Report at the 2024 Annual General Meeting,
where I will be available to answer any questions in relation to
this Report.
ALISON LITTLEY
Chair of the Remuneration Committee
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024152
CORPORATE GOVERNANCE
REMUNERATION COMMITTEE REPORT
CONTINUED
Remuneration disclosure
This Directors’ Remuneration Report has been prepared in accordance with the provisions of the Companies Act 2006 and
Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The
report meets the requirements of the UK Listing Authority’s Listing Rules and the Disclosure Guidance and Transparency Rules.
In this report, we describe how the principles of good governance relating to Directors’ remuneration, as set out in the 2018 UK
Corporate Governance Code (the Code), are applied in practice. The Remuneration Committee confirms that throughout the
financial year the Group has complied with these governance rules and best practice provisions set out in the Code.
Directors’ remuneration policy
This section of the Report sets out the remuneration policy for Executive Directors and Non-executive Directors, as approved by
shareholder vote at the 2023 Annual General Meeting. The policy came into effect on that date and will remain effective for up
to a three-year period ending on the date of the 2026 Annual General Meeting.
Executive Director remuneration policy table
This policy has been designed to support the principal objective of enabling the Group to attract, motivate and retain the people
it needs to maximise the value of the business.
Assessment of policy against the 2018 UK Corporate Governance Code
The Committee believes that the policy complies with the six pillars set out in paragraph 40 of the Code.
CLARITY:
The Committee believes that the disclosure of the remuneration arrangements is transparent
with clear rationale provided on its maintenance and any changes to policy. The Committee
remains committed to consulting with shareholders on the policy and its implementation.
SIMPLICITY:
The policy and the Committee’s approach to implementation are simple and well understood.
The performance measures used in the incentive plans are well aligned to the Group’s strategy.
RISK:
The Committee has ensured that remuneration arrangements do not encourage and reward
excessive risk taking by setting targets to be stretching and achievable, with discretion to adjust
formulaic bonus and APSP outcomes retained by the Committee to ensure pay outcomes
remain aligned with performance outturns.
PREDICTABILITY AND
PROPORTIONALITY:
The link of the performance measures to strategy and the setting of targets balances
predictability and proportionality by ensuring outcomes do not reward poor performance.
CULTURE:
The policy is consistent with the Group’s culture as well as strategy, therefore driving behaviours
that promote the long-term success of the Company for the benefit of all stakeholders.
Component and
objective Operation Opportunity Performance measures
BASE SALARY
To enable the Group
to attract, motivate
and retain the people
it needs to maximise
the value of the
business
Generally reviewed each year, with increases
effective 1 April with reference to salary levels at
other FTSE companies of broadly similar size or
sector to Norcros.
The Committee also considers the salary
increases applied across the rest of the UK
business when determining increases for
Executive Directors.
Base salary increases are applied in line with
the outcome of the annual review.
Salaries in respect of the year
under review (and for the
following year) are disclosed
in the Annual Report on
Remuneration.
Salary increases for Executive
Directors will normally not
exceed those of the wider
workforce over the period this
policy will apply. Where increases
are awarded in excess of the
wider employee population, for
example if there is a material
change in the responsibility,
size or complexity of the role,
the Committee will provide the
rationale in the relevant year’s
Annual Report on Remuneration.
n/a
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 153
CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION
POLICY REPORT
Component and
objective Operation Opportunity Performance measures
PENSION
To provide a level of
retirement benefit
that is competitive in
the relevant market
Executive Directors receive pension
contributions (either as a direct payment or a
cash allowance).
Base salary is the only element of remuneration
that is pensionable.
Executive Directors receive a
Company contribution in line
with the employer contribution
available for the wider workforce
in the relevant market.
n/a
BENEFITS
Provision of
benefits in line with
the market
Executive Directors are provided with a
company car (or a cash allowance in lieu
thereof) and private medical insurance. Other
benefits may be introduced from time to time
to ensure the benefits package is appropriately
competitive and reflects the needs and
circumstances of the Group and individual
Executive Director.
Benefits may vary by role, and
the level is determined each
year to be appropriate for the
role and circumstances of each
individual Executive Director.
It is not anticipated that the
cost of benefits (as set out
in the Annual Report on
Remuneration) would increase
materially over the period for
which this policy will apply.
The Committee retains the
discretion to approve a
higher cost in exceptional
circumstances (e.g. relocation
expenses or an expatriation
allowance on recruitment,
etc.) or in circumstances where
factors outside the Company’s
control have changed
materially (e.g. market increases
in insurance costs).
n/a
ANNUAL BONUS
AND DEFERRED
BONUS PLAN
(DBP)
To focus Executive
Directors on
achieving demanding
annual targets
relating to Group
performance and
encourage retention
Performance targets are set at the start of
the year and aligned with the annual budget
agreed by the Board. At the end of the year,
the Committee determines the extent to which
these targets have been achieved.
50% of the total bonus payment is paid in cash,
and 50% is converted into nil-cost options over
Norcros shares under the DBP. These options
are exercisable after three years, subject to
continued employment and malus (in whole
or in part) during the deferral period in the
event of a material misstatement in accounting
records, gross misconduct, calculation error or
corporate failure.
Cash bonuses may be subject to clawback over
the deferral period in similar circumstances as
identified above.
A payment equivalent to the dividends that
would have accrued on deferred bonus awards
that vest will be made to participants on vesting.
Maximum opportunity: 100% of
base salary.
Target opportunity: 50% of
base salary.
For threshold performance, the
bonus payout is up to 25% of
maximum.
The bonus will be
based primarily on the
achievement of financial
performance targets but
may, from time to time,
include non-financial
performance measures
(the weighting of which, if
any, will be capped at 25%
of the total opportunity).
Details of the measures on
which the bonus will be
based shall be disclosed in
the relevant Annual Report
on Remuneration.
The Committee has
discretion to adjust the
formulaic bonus outcomes
(including down to zero)
within the limits of the
scheme to ensure alignment
of pay with performance.
Further details, including
targets attached to the
bonus for the year under
review, are provided in
the Annual Report on
Remuneration.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024154
CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION
POLICY REPORT
CONTINUED
Component and
objective Operation Opportunity Performance measures
APPROVED
PERFORMANCE
SHARE PLAN
(APSP)
To incentivise
Executive Directors
to deliver long-term
performance that
is aligned with
shareholders’ interests
APSP awards comprise annual conditional
awards of nil-cost options following the
announcement of the Group’s final results.
Awards normally vest after three years, subject
to the achievement of a performance condition
and continued employment with the Group
until the vesting date.
To the extent an award vests, Executive
Directors will be required to hold net vested
shares for an additional holding period of
two years.
A payment equivalent to the dividends that
would have accrued on APSP awards that vest
will be made to participants on vesting.
APSP awards are also subject to malus over the
vesting period and clawback over the holding
period (in both cases in whole or in part) in the
event of a material misstatement in accounting
records, gross misconduct, calculation error or
corporate failure.
Maximum opportunities:
CEO – 150% of base salary.
CFO – 125% of base salary.
Threshold performance results
in 25% vesting.
Details of actual APSP awards
in respect of each year will be
disclosed in the Annual Report
on Remuneration.
Vesting of APSP awards
is dependent upon Group
performance over a
three-year period. Any
non-financial measures will
have a maximum aggregate
weighting of 25% of the
opportunity. Details of the
measures attaching to each
award cycle will be disclosed
in the relevant Annual
Report on Remuneration. At
the start of each cycle, the
Committee will determine
the targets that will apply to
an award.
If the performance targets
are not met at the end of
the performance period,
awards will lapse.
The Committee has
discretion to adjust the
formulaic APSP outcomes
within the limits of the
scheme if certain relevant
events take place (e.g.
a capital restructuring,
a material acquisition/
divestment, etc.) with any
such adjustment to result in
the revised targets being no
more or less challenging to
achieve.
The Committee will consult
major shareholders on
changes to the APSP,
although it retains discretion
to make changes to the
performance measures
attaching to future cycles
without reverting to a full
shareholder vote.
Further details, including
the targets attached to
the APSP in respect of
each year, are disclosed
in the Annual Report on
Remuneration.
SAVE AS YOU
EARN (SAYE)
To encourage the
ownership of Norcros
plc shares
An HMRC-approved scheme where employees
(including Executive Directors) may save up
to the individual monthly limit set by HMRC
from time to time over three years. Options are
granted at a discount of up to 20%.
Savings capped at the
individual monthly limit set by
HMRC (or other such lower
limit as the Committee may
determine) from time to time.
n/a
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 155
CORPORATE GOVERNANCE
Component and
objective Operation Opportunity Performance measures
SHAREHOLDING
REQUIREMENTS
To align Executive
Director and
shareholder interests
and reinforce
long-term decision
making, including for
a period following
cessation of
employment
Executive Directors are required to retain at
least 50% of any DBP or APSP awards that
vest (net of tax) until they have built up a
personal holding of Norcros plc shares worth
a defined multiple of their salaries (of at least
100% of salary).
Details of the in-post shareholding requirements
that apply to the Executive Directors are set out
in the Annual Report on Remuneration.
Executive Directors will normally be required
to maintain a holding in Norcros plc shares
for a period of two years after they cease to
be a Director of the Group. For the first year,
this shareholding guideline will be equal to the
lower of a Director’s actual shareholding at the
time of their departure and the shareholding
requirement in effect at the date of their
departure and, for the second year, 50% of
that figure.
The specific application of this shareholding
guideline will be at the Committee’s discretion.
Only shares that are held beneficially by an
Executive Director or their spouse or partner, or
nil-cost options granted under the DBP count
in the assessment of whether an Executive
Director has met the required ownership level.
n/a n/a
Notes to the policy table
PAYMENTS FROM PREVIOUS AWARDS
For the avoidance of doubt, the Group will honour any commitment entered into, and Executive Directors will be eligible to
receive payment from any award made, prior to the approval and implementation of the remuneration policy detailed in this
Report. Details of these awards are, and will be, disclosed in the Annual Report on Remuneration.
PERFORMANCE MEASURE SELECTION AND APPROACH TO TARGET SETTING
The measures used in the annual bonus will be selected by the Committee to directly reinforce our medium-term growth-
orientated strategy (see pages 26 to 29 for further details of the strategy; details of the measures selected for use in the bonus
for the year in review and for the coming year are set out in the Annual Report on Remuneration). For the APSP, the Committee
shall select measures that are transparent, objective and effective measures of performance that are in the long-term interests of
all of our shareholders (further details of the APSP measures are set out in the Annual Report on Remuneration).
Targets applying to the annual bonus and APSP are reviewed annually, based on a number of internal and external reference
points. Annual bonus targets are aligned with the annual budget agreed by the Board. Annual bonus targets are considered to
be commercially sensitive, but will be disclosed retrospectively in the following year’s Annual Report on Remuneration. APSP
targets reflect industry context, expectations of what will constitute appropriately challenging performance levels and factors
specific to the Group. The Committee will determine the APSP targets at the time awards are made and these targets (along
with other relevant details of the grant) will ordinarily be disclosed in the following year’s Annual Report on Remuneration.
DIFFERENCES FROM REMUNERATION POLICY FOR OTHER EMPLOYEES
The remuneration policy for other employees is based on broadly consistent principles as described above. Annual salary reviews
across the Group take into account Group performance, local pay and market conditions, and salary levels for similar roles in
comparable companies.
Executives and senior managers are eligible to participate in annual bonus schemes. Opportunities and performance measures
vary by organisational level, geographical region and an individual’s role. Other members of the Group senior leadership team
participate in the APSP on similar terms as the Executive Directors, although award sizes may vary by organisational level. All UK
and Republic of Ireland employees are eligible to participate in the Group’s SAYE scheme on identical terms.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024156
CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION
POLICY REPORT
CONTINUED
Performance scenario charts
Minimum
On target
Maximum
Maximum
+50%
SPG
Minimum
On target
Maximum
Maximum
+50%
SPG
Chief Executive Officer
100% £488k
£832k
£1,427k
£1,678k
59%
34%
29%
26% 15%
31%
26%
35%
45%
Chief Financial Officer
100% £375k
£633k
£1,074k
£1,257k
59%
35%
30%
26% 15%
31%
26%
34%
44%
Fixed pay Annual bonus APSP
The charts above provide estimates of the potential future reward opportunity for Executive Directors, and the potential
mix between the different elements of remuneration under four different performance scenarios: “Minimum”, “On target”,
“Maximum” and “Maximum + 50% share price growth (SPG)”. This information is for the current financial year, as
explained below.
The potential opportunities illustrated above are based on the current remuneration policy applied to base salaries at 1 April
2024. For the annual bonus, the amounts illustrated are those potentially receivable in respect of performance for the year to
31 March 2025. It should be noted that any bonus deferred into the DBP and APSP awards does not normally vest until the
third anniversary of the date of grant. This is intended to illustrate the relationship between executive pay and performance.
The values of the DBP and APSP assume no increase in the underlying value of the shares (except the APSP value under the
“Maximum + 50% SPG” scenario) and actual pay delivered will further be influenced by changes in factors such as the Group’s
share price and the value of dividends paid.
Valuation assumptions
The “Minimum” scenario reflects base salary, pension and benefits (i.e. fixed remuneration), being the only elements of the
Executive Directors’ remuneration package not linked to performance.
The “On target” scenario reflects fixed remuneration as above, plus target bonus payout (50% of salary) and APSP threshold
vesting at 25% of the maximum award level.
The “Maximum” scenario reflects fixed remuneration, plus full payout under all incentives (100% of salary under the annual
bonus and full vesting of the APSP opportunity to be awarded in the year ending 31 March 2025).
The “Maximum + 50% SPG” scenario reflects fixed remuneration, plus full payout under all incentives (as described above).
The value of the APSP additionally reflects 50% SPG.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 157
CORPORATE GOVERNANCE
Approach to Executive Director recruitment and remuneration
External appointment
In cases of hiring or appointing a new Executive Director from outside the Group, the Remuneration Committee may make use
of all existing components of remuneration, as follows:
Component Policy
BASE SALARY
The base salaries of new appointees will be determined by reference to relevant market data, experience
and skills of the individual, internal relativities and the current salary of the incumbent in the role.
Where a new appointee has an initial base salary set below market, the Committee may make phased
increases over a period of three years, subject to the individual’s development and performance in
the role.
BENEFITS
As set out in the policy table, benefits may include (but are not limited to) the provision of a company car
or car allowance, medical insurance, and any necessary expatriation allowances or expenses relating to
an Executive’s relocation.
PENSION
New appointees will receive pension contributions into a defined contribution pension arrangement or
an equivalent cash supplement, or a combination of both. Company contributions to pension will be in
line with that available for the wider workforce in the relevant market.
SAYE
New appointees will be eligible to participate on identical terms to all other employees.
ANNUAL
BONUS
The bonus structure described in the policy table will apply to new appointees. The maximum opportunity
will be 100% of salary, pro-rated in the year of joining to reflect the proportion of that year employed.
Performance measures may include strategic and operational objectives tailored to the individual in the
financial year of joining.
50% of any bonus earned will be deferred into the DBP on the same terms as other Executive Directors.
APSP
New appointees will be granted annual awards under the APSP on the same terms as other Executive
Directors (including in relation to award opportunities), as described in the policy table.
In determining the appropriate remuneration structure and level for the appointee, the Remuneration Committee will take into
consideration all relevant factors to ensure that arrangements are in the best interests of our shareholders. It is not the intention
of the Committee that a cash payment such as a “golden hello” would be offered. However, the Committee may make an award
in respect of a new appointment to “buy out” incentive arrangements forfeited on leaving a previous employer, over and above
the approach and award limits outlined in the table above. Any such award will be made under existing incentive structures,
where appropriate, and will be subject to the normal performance conditions of those incentives. The Committee may also
consider it appropriate to make “buy out” awards under a different structure, using the relevant Listing Rule where necessary,
to replicate the structure of forfeited awards. Any “buy out” award (however this is delivered) would have a fair value no higher
than that of the awards forfeited, taking into account relevant factors including performance conditions, the likelihood of those
conditions being met and the proportion of the vesting period remaining. Details of any such award will be disclosed in the first
Annual Report on Remuneration following its grant.
Internal promotion to the Board
In cases of appointing a new Executive Director by way of internal promotion, the policy will be consistent with that for external
appointees detailed in the table above (i.e. excluding the flexibility to make “buy out” awards). Where an individual has
contractual commitments made prior to their promotion to the Board, and it is agreed that a commitment is to continue, the
Group will continue to honour these arrangements even if there are instances where they would not otherwise be consistent with
the prevailing Executive Director remuneration policy at the time of promotion.
Service contracts and policy for payment for loss of office
Executive Directors have signed rolling contracts, terminable on 12 months’ notice by either the Group or the Director. The Group
entered into a contract with Thomas Willcocks on 1 April 2023, and with James Eyre on 1 August 2021. Copies of these contracts
are available to view at the Group’s registered office.
The Committee’s policy for Directors’ termination payments is to provide only what would normally be due to Directors had they
remained in employment in respect of the relevant notice period, and not to go beyond their normal contractual entitlements.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024158
CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION
POLICY REPORT
CONTINUED
Any incentive arrangements will be dealt with subject to the relevant rules, with any discretion exercised by the Committee on a
case-by-case basis taking into account the circumstances of the termination. Termination payments will also take into account
any statutory entitlement at the appropriate level, to be considered by the Committee on the same basis. The Committee will
monitor and, where appropriate, enforce the Directors’ duty to mitigate loss. When the Committee believes that it is essential to
protect the Group’s interests, additional arrangements may be entered into (for example post-termination protections above and
beyond those in the contract of employment) on appropriate terms.
Under the service contracts for each Executive Director, the Company has the discretion to terminate the employment lawfully,
without any notice, by paying to the Director a sum equal to, but no more than, the salary and other contractual benefits of
the Director. The payment would be in respect of that part of the period of notice which the Director has not worked, less any
appropriate tax and other statutory deductions. The Director would be entitled to any holiday pay that may otherwise have
accrued in what would have been the notice period. The Company may pay any sums due under these pay in lieu of notice
provisions as one lump sum or in instalments of what would have been the notice period. If the Company elects to pay in
instalments, the Director is under an express contractual duty to mitigate their losses and to disclose any third-party income they
have received or are due to receive. The Company reserves the right to reduce the amount of the instalments by the amount of
such income. The Committee would expect to include similar pay in lieu of notice provisions in any future Executive Directors’
service contract.
Also under their service contracts, if the Director’s employment is terminated for whatever reason, they agree that they are not
entitled to any damages or compensation to recompense them for the loss or diminution in value of any actual or prospective
rights, benefits or expectations under, or in relation to, the APSP, the DBP, the SAYE Plan or the annual discretionary bonus
scheme. This is without prejudice to any of the rights, benefits or entitlements which may have accrued to the Director under
such arrangements at the termination of employment.
The table below summarises how awards under the annual bonus, DBP and APSP are typically treated in specific circumstances,
with the final treatment remaining subject to the Committee’s discretion:
Reason for cessation Calculation of vesting/payment Timing of payment/vesting
ANNUAL BONUS
Voluntary resignation or
summary dismissal
No bonus paid.
n/a
All other circumstances Bonuses are paid only to the extent that the associated objectives,
as set at the beginning of the plan year, are met. Any such bonus
would normally be paid on a pro-rata basis, taking account of the
period actually worked.
At the normal payment
date, unless the Committee,
in its absolute discretion,
determines that awards
should be paid out on
cessation of employment.
DBP
Summary dismissal
Awards lapse.
n/a
Injury, illness, disability,
death, retirement with
the agreement of the
Group, redundancy or
employing company
leaving the Group
Unvested awards vest. At the normal vesting date,
unless the Committee,
in its absolute discretion,
determines that awards
should vest on cessation of
employment.
Voluntary resignation
or other reason not
stated above
Unvested awards lapse unless the Committee, in its absolute
discretion, determines that an award should vest.
If the Committee
determines that an award
should vest, then awards
will vest on their normal
vesting date, unless the
Committee, in its absolute
discretion, determines that
awards should vest on
cessation of employment.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 159
CORPORATE GOVERNANCE
Reason for cessation Calculation of vesting/payment Timing of payment/vesting
Change of control Unvested awards will be pro-rated for the portion of the vesting
period elapsed on change of control, unless the Committee, in its
absolute discretion, determines otherwise. Awards may alternatively
be exchanged for new equivalent awards in the acquirer, where
appropriate.
On change of control.
APSP
Summary dismissal
Awards lapse.
n/a
Voluntary resignation,
injury, retirement with
the agreement of the
Group, redundancy or
other reason that the
Committee determines
in its absolute discretion
Unapproved option awards lapse unless the Committee, in its absolute
discretion, determines otherwise. Awards that do not lapse will continue
to be eligible to vest on the normal vesting date, subject to being pro-
rated for time to the date of cessation of employment and performance
over the complete performance period. The Committee may, in its
absolute discretion, determine that awards shall vest on cessation in
exceptional circumstances, subject to being pro-rated for time and
performance to the date of cessation of employment.
Approved option awards lapse, except in the case of retirement with
the agreement of the employer, when awards will vest, subject to
pro-rating as stated above.
Any awards in a holding period will normally remain subject to the
holding requirement until the period ends.
At the normal vesting date,
unless the Committee,
in its absolute discretion,
determines otherwise.
Death Unapproved option awards vest in full but may be subject to the
application of the performance conditions attached to them.
Approved option awards are pro-rated for time and performance to
that date.
Immediately.
Change of control Unapproved option awards vest in full, but may be subject to
the application of the performance conditions attached to them.
Approved option awards are pro-rated for time and performance to
that date.
Any awards in a holding period will normally be released.
Awards vest, subject to being pro-rated for time and performance
to the date of cessation of employment, unless the Committee
determines otherwise. Awards may, alternatively, be exchanged for
new equivalent awards in the acquirer, where appropriate.
On change of control.
External appointments
Executive Directors are permitted to take up non-executive positions on the boards of other companies, subject to the prior
approval of the Board. The Executive Directors may retain any fees payable in relation to such appointment. Details of external
appointments and the associated fees received are included in the Annual Report on Remuneration.
Consideration of employment conditions elsewhere in the Group
The Group seeks to promote and maintain good relations with employees and (where relevant) their representative bodies as
part of its broader employee engagement strategy. The Committee is mindful of salary increases applying across the rest of the
business in relevant markets when considering salaries for Executive Directors, but does not currently consult with employees
specifically on executive remuneration policy and framework. However, as part of its broader remit, the Committee has detailed
oversight of, and is invited to input on, workforce remuneration policies and practices to help ensure these are underpinned by,
and implemented to reinforce, a consistent set of values and principles.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024160
CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION
POLICY REPORT
CONTINUED
Consideration of shareholder views
The Committee considers shareholder views received during the year and at the Annual General Meeting each year, as well as
guidance from shareholder representative bodies more broadly, in shaping remuneration policy and in its implementation. The
vast majority of shareholders continue to express support for remuneration arrangements at Norcros. The Committee keeps the
remuneration policy under regular review, to ensure it continues to reinforce the Group’s long-term strategy and aligns Executive
Directors with shareholders’ interests. We will continue to consult shareholders before making any significant changes to our
remuneration policy.
Non-executive Director remuneration policy
Non-executive Directors (including the Board Chair) have letters of appointment which specify an initial term of at least three
years, although these contracts may be terminated at one month’s notice by either the Company or Director. In line with the UK
Corporate Governance Code guidelines, all Directors are subject to re-election annually at the Annual General Meeting.
Details of terms and notice periods for Non-executive Directors are summarised below:
Non-executive Director
1
Date of appointment Notice period
Steve Good 1 July 2023 1 month
Alison Littley 1 May 2019 1 month
Stefan Allanson 1 January 2023 1 month
1
Rebecca DeNiro will join as a Non-executive Director on 1 July 2024.
It is the policy of the Board of Directors that Non-executive Directors are not eligible to participate in any of the Group’s bonus,
long-term incentive or pension schemes. Details of the policy on fees paid to our Non-executive Directors are set out in the
table below:
Component and objective Operation Opportunity Performance measures
FEES
To attract and retain
Non-executive Directors
of the highest calibre
with broad commercial
experience relevant to
the Group
The fee paid to the Chair is determined
by the Committee, excluding the
Chair. The fees paid to the other Non-
executive Directors are determined by
the Chair and the Executive Directors.
Fee levels are reviewed periodically,
with any adjustments effective
1 April. Fees are reviewed by taking
into account external advice on best
practice and fee levels at other FTSE
companies of broadly similar size and
sector to Norcros. Time commitment
and responsibility are also taken into
account when reviewing fees.
Aggregate fees are limited
to £750,000 p.a. by the Group’s
Articles of Association.
Fee increases will be applied
taking into account the
outcome of the review.
The fees paid to Non-executive
Directors in respect of the
year under review (and for the
following year) are disclosed
in the Annual Report on
Remuneration.
n/a
Approach to Non-executive Director recruitment remuneration
In recruiting a new Non-executive Director, the Remuneration Committee will use the policy as set out in the table above. A base
fee in line with the prevailing fee schedule would be payable for serving as a Director of the Board, with additional fees payable
for acting as Chair of the Audit and Risk or Remuneration Committees, or as Senior Independent Director.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 161
CORPORATE GOVERNANCE
The following section provides details of how our 2023 policy was implemented during the year ended 31 March 2024 and will be
implemented in the year ending 31 March 2025.
Remuneration Committee membership in the year ended 31 March 2024
The Remuneration Committee is responsible for recommending to the Board the remuneration policy for Executive Directors
and the members of the Group’s senior management, and for setting the remuneration packages for the Board Chair and each
Executive Director. The Committee’s responsibilities are set out in its Terms of Reference, which can be found on the Company’s
website at www.norcros.com.
During the year under review, the following Directors were members of the Remuneration Committee:
• Alison Littley (Committee Chair)
• Stefan Allanson
• David McKeith (until 26 July 2023)
• Steve Good (from 1 July 2023)
All members of the Committee are independent. They serve on the Committee for a minimum three-year term and a maximum of
nine years, provided the Director remains independent. As part of an effectiveness review for the entire Board, an evaluation of
the Remuneration Committee was undertaken in the year to 31 March 2024. We are pleased to report this review concluded that
the Committee continues to operate effectively. The Committee has used this evaluation process to help it identify specific areas
of focus for the year ahead, as set out in the Remuneration Committee Report on page 150.
In addition, the Chief Executive Officer was invited to attend Committee meetings as appropriate to advise on specific questions
raised by the Committee and on matters relating to the performance and remuneration of senior managers, other than in
relation to his own remuneration. The Group Counsel and Company Secretary acts as secretary to the Committee. No individual
was present while decisions were made regarding their own remuneration.
The Committee met four times during the year. Attendance by individual members at meetings is detailed on page 131.
Main activities of the Committee during the year ended 31 March 2024
The main activities carried out by the Committee during the year under review were:
• reviewing and setting salary levels for Executive Directors and senior management;
• finalising the 2023 Directors’ remuneration policy;
• determining the annual bonus outcome for the year ended 31 March 2023;
• setting operating profit targets for the annual bonus for the year ended 31 March 2024;
• calibrating EPS targets for, and granting of, 2023 APSP awards;
• reviewing developments in remuneration governance;
• reviewing and setting the fees payable to the Board Chair; and
• reviewing the pay policies and practices for the wider workforce.
Advisors
During the year under review, the Committee sought independent advice from Ellason LLP. Ellason was appointed in 2021 after
the Committee’s lead advisor moved to Ellason. Ellason is a member and signatory of the Code of Conduct for Remuneration
Consultants, details of which can be found at www.remunerationconsultantsgroup.com. In the year to 31 March 2024, Ellason
provided the following services:
Services provided
Fees
(excl. VAT)
Ellason Guidance on developments in remuneration governance and market trends (and implications for Norcros),
remuneration benchmarking for annual review, Remuneration Report drafting support and general support to
the Committee throughout the year on remuneration related matters.
£21,704
Ellason does not provide other services to the Company or its Directors and the Committee is satisfied that the advice it receives
is independent.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024162
CORPORATE GOVERNANCE
ANNUAL REPORT ON REMUNERATION
Summary of shareholder voting at the Annual General Meeting
The following table shows the results of the advisory vote on the 2023 Annual Report on Remuneration at the 2023 Annual
General Meeting, and the binding vote on the remuneration policy at the 2023 Annual General Meeting:
Annual Report on Remuneration
(2023 AGM)
Remuneration policy
(2023 AGM)
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
For (including discretionary) 72,058,521 98.54% 70,719,065 96.69%
Against 1,070,308 1.46% 2,418,167 3.31%
Total votes cast (excluding withheld votes) 73,128,829 100.00% 73,137,232 100.00%
Votes withheld 1,988 6,808
Total votes (including withheld votes) 73,130,817 73,144,040
Single figure for total remuneration for Executive Directors (audited information)
The following table provides a single figure for total remuneration of the Executive Directors for the year ended 31 March 2024,
together with comparative figures for the year ended 31 March 2023. The values of each element of remuneration are based
on the actual value delivered, where known. The value of the annual bonus includes the element of bonus deferred under the
Deferred Bonus Plan.
Thomas Willcocks
7
James Eyre
2024
£
2023
£
2024
£
2023
£
Base salary
1
420,000 — 320,000 290,000
Taxable benefits
2
16,201 — 15,720 12,720
Annual bonus
3
— — — 93,670
Share-based payments
4
63,515 — 96,068 82,304
Post-employment benefit
5
33,600 — 25,600 23,200
SAYE
6
— — 3,274 —
Total fixed 469,801 — 361,320 325,920
Total variable 63,515 — 99,342 175,974
Tot a l 533,316 — 460,662 501,894
1
Base salaries for 2024 reflect the amounts disclosed and explained in last year’s Directors’ Remuneration Report.
2
Taxable benefits consist of car allowance (Thomas Willcocks – 2024: £15,000, 2023: £nil; and James Eyre – 2024: £15,000, 2023: £12,000) and private medical insurance.
3
No bonus is payable for the year ended 31 March 2024. See “Annual bonus in respect of performance in the year ended 31 March 2024” overleaf for further details. Annual bonus
in 2023 comprises both the cash annual bonus for performance during the year and, where applicable, the face value of the deferred bonus element on the date of deferral. Any
deferred share element is deferred for three years.
4
For 2024, the APSP value reflects the estimated value of APSP awards granted in July 2021, of which 49.3% will vest to Thomas Willcocks and James Eyre on 21 July 2024 (equivalent
to 29,528 shares and 44,662 shares, respectively). Thomas Willcocks and James Eyre were not Executive Directors at the time these awards were granted and, as such, the vested
shares will not be subject to the usual two-year holding period. The reported values include the dividends expected to be accrued on these awards over the period from grant to the
expected vesting date (£8,386 and £12,684, respectively) and are estimated using the three-month average share price to 31 March 2024 of 186.7p. This will be trued up to reflect
the vest-date value of awards in next year’s Annual Report on Remuneration. None of the 2021 APSP value is attributable to share price appreciation; the share price declined by
approximately 35% since the grant date. For 2023, the APSP value for James Eyre of £82,304 reflects the value of APSP awards granted in November 2020, which vested at 98.9%
on 23 November 2023. The share price on the vesting date (22 November 2023) was 167.0p.
5
In 2024, pension benefits comprised cash in lieu. See “Total pension entitlements” on page 165 for further details. The pension benefit provided to James Eyre in 2023 comprises cash
in lieu.
6
Embedded gain on grant of Save As You Earn Scheme grants made in the relevant year.
7
Thomas Willcocks was appointed Chief Executive Officer on 1 April 2023.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 163
CORPORATE GOVERNANCE
Incentive outcomes for the year ended 31 March 2024 (audited information)
Annual bonus in respect of performance in the year ended 31 March 2024
The 2024 Annual Bonus Plan was based 100% on Group underlying operating profit performance for the year to 31 March
2024. The maximum annual bonus opportunity for the year was 100% of base salary for the Chief Executive Officer and Chief
Financial Officer. Based on the Company’s performance in 2024, against the stretching targets set at the start of the year, the
Committee determined no annual bonus was payable to the Executive Directors. Further details, including the profit targets set
and actual performance, are provided below:
Underlying
profit target
£m
Payout
(% of max.)
2024
outturn
£m
Bonus
(% of max.)
Maximum 50.9 100%
Target 47.2 50% 41.4
1
0%
Threshold 45.8 25%
1
Target was set on a pre-IFRS 16 basis; therefore, the 2024 outturn has been assessed on a similar basis, i.e. underlying operating profit of £41.4m pre-IFRS 16 (reported £43.2m).
In keeping with good practice, the Committee reviewed the formulaic outcome of the annual bonus in the context of business
performance and the wider stakeholder experience. The Committee concluded that the outcomes reflect the underlying
performance of the Group more generally, and the experience of other stakeholders. Accordingly, no discretion has been
exercised in relation to the bonus outcome for the 2024 financial year.
2021 APSP awards vesting
Effective July 2021, APSP awards were granted to Thomas Willcocks (59,895 shares) and James Eyre (90,594 shares). Vesting
of these awards was based on Norcros’ three-year aggregate diluted underlying EPS to 31 March 2024. Based on performance
over the performance period, against the targets originally set, the Committee has determined that these awards will each vest
at 49.3% on 21 July 2024, being the end of the relevant three-year vesting period according to the APSP rules. Thomas Willcocks
and James Eyre were not Executive Directors at the time the awards were granted and, as such, their vested shares will not be
subject to the usual two-year holding period. Performance targets and actual performance against these, as determined by the
Committee, are summarised in the table below:
Aggregate
Diluted
underlying EPS % vesting
Norcros’
performance
Award vesting
(% of APSP
award)
Threshold 103.0p 25%
Maximum 117.5p 100% 107.7p 49.3%
Scheme interests awarded in 2024 (audited information)
2023 DBP
During the year under review, the following DBP award was made to James Eyre (relating to the annual bonus earned for
performance over the year to 31 March 2023).
James Eyre
Basis of award 50% of earned bonus
Grant date 26 July 2023
Number of nil-cost options granted 27,550
Grant-date share price (p) 170.0
Grant-date face value (£) 46,835
Normal vesting date 26 July 2026
Performance conditions None
Thomas Willcocks was not an Executive Director during the year to 31 March 2023. His annual bonus for that year was not
subject to deferral.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024164
CORPORATE GOVERNANCE
ANNUAL REPORT ON REMUNERATION
CONTINUED
2023 APSP
During the year under review, the following APSP awards were granted to the Executive Directors:
Thomas Willcocks James Eyre
Basis of award 100% of base salary 100% of base salary
Grant date 26 July 2023 26 July 2023
Number of nil-cost options granted 247,058 188,235
Grant-date share price (p) 170.0 170.0
Grant-date face value (£) 419,999 319,999
Normal vesting date 26 July 2026 26 July 2026
Performance period 1 April 2023–31 March 2026 1 April 2023–31 March 2026
Performance conditions
Three-year aggregate underlying diluted EPS to
31 March 2026
Threshold: 98.7p (25% of element vesting)
Maximum: 105.6p (100% of element vesting)
Straight-line vesting between these points
Three-year aggregate underlying diluted EPS to
31 March 2026
Threshold: 98.7p (25% of element vesting)
Maximum: 105.6p (100% of element vesting)
Straight-line vesting between these points
Holding period 26 July 2026–26 July 2028 26 July 2026–26 July 2028
2023 SAYE
In the year ended 31 March 2024, James Eyre entered into a savings contract under the SAYE scheme. He was granted 13,156
options under a SAYE savings contract that had an embedded value at the date of grant of £3,274.
Total pension entitlements (audited information)
As part of their remuneration arrangements, Thomas Willcocks and James Eyre are entitled to receive pension contributions
from the Company. Under these arrangements, they can elect for those contributions to be paid in the form of taxable pension
allowance, or direct payments into a personal pension plan or the Group’s UK defined contribution scheme. If a payment is
made in the form of taxable pension allowance, the amount payable is not reduced to allow for employment taxes.
During the year, Thomas Willcocks elected to take a taxable pension allowance of £33,600 (2023: £nil) with no amounts paid
directly into a pension scheme (2023: £nil). James Eyre elected to take a taxable pension in the year of £25,600 (2023: £23,200)
with no amounts paid directly into a pension scheme (2023: £nil). In line with the Regulations, the single figure table reflects the
total of these amounts. Thomas Willcocks and James Eyre are not members of the UK defined benefit scheme.
Single figure for total remuneration for Non-executive Directors
(audited information)
The table below sets out a single figure for the total remuneration received by each Non-executive Director for the year ended
31 March 2024 and the prior year:
Total fee
2024
£
2023
£
David McKeith
1
49,783 73,333
Steve Good
2
103,772 —
Alison Littley 59,998 56,000
Stefan Allanson
3
55,277 12,250
1
David McKeith acted as Board Chair from 24 January 2023 until 30 June 2023. During this period, he received the Board Chair fee on a pro-rata basis, and did not receive any
additional fee for chairing the Audit and Risk Committee, or in his capacity as Senior Independent Director (for which an additional fee of £3,000 p.a. was introduced from 1 April
2022). In addition to the amounts disclosed above, after stepping down at the Annual General Meeting, David McKeith received £3,505 per month for six months for ongoing
assistance to the Board.
2
Steve Good was appointed on 1 July 2023 and became Board Chair on 26 July 2023.
3
Stefan Allanson was appointed on 1 January 2023.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 165
CORPORATE GOVERNANCE
Payments to past Directors (audited information)
As previously reported, Nick Kelsall retired with effect from 31 March 2023. He remained an employee until 30 January 2024 and
received salary and contractual benefits until that date (the value of which totalled £441,700). Nick Kelsall was not eligible for a
bonus in relation to the year ended 31 March 2024. As described in last year’s report, he retains interests in APSP awards granted
to him in 2021 and 2022. His 2021 APSP award will vest as to 49.3% of maximum in July 2024, through which he will receive
66,498 shares. These remain subject to the two-year post-vesting holding period.
External appointments in the year
No external appointments were held by the Executive Directors during the year.
Percentage change in Director remuneration
The table below shows the annual percentage change in remuneration from 2020 to 2024 for each individual who served as a
Director during the year ended 31 March 2024, compared with the percentage change in remuneration for all UK staff employed
in continuing operations. Norcros plc has no employees other than the Directors. A UK subset of employees (who are employed
by the UK operating subsidiary of Norcros plc) was selected as a suitable comparator group for this analysis because the
Directors (who are employed or engaged by Norcros plc) are based in the UK (albeit with global roles and responsibilities) and
pay changes across the Group vary widely depending on local market conditions (in particular fluctuations in the exchange rate
between the South African Rand and Sterling). The comparison uses a per capita figure and, accordingly, this reflects an average
across the Group’s businesses. The impact of operational factors such as new joiners and leavers and the mix of employees is
therefore not taken into account.
Salary or fees
1
Benefits Bonus
2024 2023 2022 2021 2024 2023 2022 2021 2024 2023 2022 2021
Executive Directors
Thomas Willcocks
2
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
James Eyre 10.3% 11.1% n/a n/a 23.6% 0.1% n/a n/a (100%) (64.2%) n/a n/a
Non-executive
Directors
Alison Littley 7.1% 17.5% 8.4% (5.0%) n/a n/a n/a n/a n/a n/a n/a n/a
David McKeith
3
103.7% (27.0%) 129.8% (5.0%) n/a n/a n/a n/a n/a n/a n/a n/a
Stefan Allanson
4
12.8% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Steve Good
5
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Average of other
employees 14.0% 2.8% 13.0% (3.6%) (11.0%) (8.6%) 4.0% 6.7% 55.0% (27.0%) (18.8%) n/a
1
Salary and fee figures are annualised for this comparison. Note that individuals who were Directors during the period under review, but not at any point during the year ended
31 March 2024, have not been included. The percentage changes in their remuneration for prior years (and in which they were a Director) are disclosed in relevant previous Annual
Report and Accounts.
2
Thomas Willcocks was appointed as Chief Executive Officer on 1 April 2023, therefore the annual percentage change in remuneration is not applicable.
3
David McKeith acted as Board Chair from 15 April to 8 December 2021 and from 24 January 2023 until 30 June 2023. The annual percentage change in his remuneration reflects the
payment of additional fees to reflect these periods of additional responsibility. The percentage change for 2024 is based on an annualised fee for 2024.
4
Stefan Allanson joined the Board during the 2023 financial year. The percentage change for 2024 is based on an annualised fee for 2023.
5
Steve Good was appointed Chair on 1 July 2023, therefore the annual percentage change in remuneration is not applicable.
Relative importance of spend on pay
The table below shows shareholder distributions and Norcros’ expenditure on total employee pay for the year under review and
the prior year, and the percentage change year on year.
2024
£m
2023
£m % change
Dividends (i.e. total payments made in year) 9.1 9.2 (1.1%)
Dividend per share (i.e. total dividend per share in pence in respect of year) 10.2p 10.2p 0%
Total staff costs
1
75.8 76.9 (1.0%)
1
Total staff costs in 2023 include the staff costs of Grant Westfield since the date of acquisition.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024166
CORPORATE GOVERNANCE
ANNUAL REPORT ON REMUNERATION
CONTINUED
CEO pay ratio
The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (the Regulations) require
certain companies to disclose the ratio of the Chief Executive’s pay, using the amount set out in the single total figure table
(shown in this Report on page 163), to that of the total remuneration of full-time equivalent UK employees at the 25th percentile,
median and 75th percentile. The required information is set out in the table below:
Ye a r Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2024 Option B 1:23.2 1:16.9 1:13.6
2023 Option B 1:49.7 1:41.2 1:28.2
2022 Option B 1:37.6 1:35.4 1:20.3
2021 Option B 1:36.2 1:30.5 1:19.9
2020 Option B 1:27.8 1:27.3 1:15.6
CEO pay
£
P25 pay
£
P50 pay
£
P75 pay
£
2024 Total remuneration 533,316 22,951 31,500 39,326
Base salary 420,000 21,684 30,000 37,100
2023 Total remuneration 1,125,035 22,641 27,293 39,947
Base salary 476,000 21,372 25,994 38,045
2022 Total remuneration 865,789 23,025 24,450 42,720
Base salary 388,470 21,000 23,000 38,150
2021 Total remuneration 815,581 22,505 26,772 41,080
Base salary 358,297 22,500 26,772 40,600
2020 Total remuneration 561,776 20,173 20,543 36,009
Base salary 377,155 19,329 19,752 35,000
The 25th percentile, median and 75th percentile figures used to determine the above ratios were selected by reference to
the hourly pay figures for the Group’s UK workforce, taken from its gender pay gap statistics for the relevant year and from
these identifying the three employees who are at each relevant percentile. The full-time equivalent annualised remuneration
(comprising salary, benefits, pension, annual bonus and long-term incentives) for those employees for the year ended
31 March 2024 was then calculated. This methodology is defined in the Regulations as Option B, which was chosen as the most
appropriate methodology given the employee demographics of the Group’s UK workforce. The year on year trend of pay ratios
for each percentile is that the ratios have decreased. This is due to a greater decrease in the value of variable elements of the
CEO’s remuneration, which comprise a higher percentage of the total package than for the employees at P25, P50 and P75.
Performance graph and table
The following graph shows the ten-year TSR performance of the Company relative to the FTSE All-Share Construction &
Materials Index. This comparator was chosen because the Company is a constituent member of this index.
Total shareholder return (Value of £100 invested on 31 March 2014)
50
100
150
200
250
300
31 March
2024
31 March
2023
31 March
2022
31 March
2021
31 March
2020
31 March
2019
31 March
2018
31 March
2017
31 March
2016
31 March
2015
31 March
2014
FTSE All-Share Index
Norcros
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 167
CORPORATE GOVERNANCE
The table below details the Group Chief Executive’s single figure of remuneration over the same period:
CEO single figure of remuneration (£000)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Incumbent
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Nick
Kelsall
Thomas
Willcocks
Total remuneration £1,161,288 £928,764 £1,025,158 £971,710 £970,860 £561,776 £815,581 £865,789 £1,125,035 £533,316
Annual bonus (as a %
of max. opportunity) 69% 81% 68% 50% 61% — 100% 100% 32% 0%
APSP vesting (as a %
of max. opportunity) 99% 100% 100% 100% 58% 26% — — 99% 49%
Implementation of Executive Director remuneration policy for the year to
31 March 2025
The Remuneration Committee conducted a thorough review of Executive Directors’ remuneration, effective 1 April 2024. The
results of this review are as follows:
Base salary
As described in the annual statement prefacing this report, the Committee resolved to award inflationary salary increases of 4%
(below the wider workforce average of 4.5%) to each of Thomas Willcocks and James Eyre. Effective 1 April 2024, base salaries
are £436,800 and £332,800 for Thomas and James, respectively.
Pension
Both Executive Directors continue to receive a pension contribution, or allowance in lieu, of 8% of salary, in line with the
employer contribution available for the wider UK workforce.
Benefits
Other benefits consist of car allowance of £15,000 and private medical insurance.
Annual bonus
The annual bonus opportunity for Executive Directors will remain unchanged for the 2025 financial year with a maximum
bonus opportunity of 100% of salary. The bonus outcome for Executive Directors will continue to be based primarily on Group
underlying operating profit (to be weighted 80% of the opportunity), with working capital being introduced to the bonus
scorecard for this year (weighted 20%), to balance the existing focus on profit performance with a focus on operational
efficiency. Of any bonus earned, 50% will be deferred into nil-cost options for a further three years under the DBP. Annual bonus
targets will be disclosed in next year’s Annual Report on Remuneration, subject to these no longer being considered by the
Board to be commercially sensitive.
APSP
APSP awards will be made in the 2025 financial year to the Executive Directors, with face values of 115% of salary for Thomas
Willcocks, and 110% of salary for James Eyre. The rationale for this evolution in our approach is explained at the start of
this Remuneration Report. Vesting of these awards will be subject to the achievement of suitably stretching EPS targets in
accordance with the remuneration policy, and a discretionary assessment by the Committee of the quality of earnings over the
performance period by reference to the Group’s return on capital employed performance. For this cycle and going forward, the
Committee has resolved to set three-year EPS targets on a point-to-point basis rather than in aggregate terms. This approach is
considered to better mitigate the unintended impact on multiple award cycles of volatility in external market conditions, ensuring
that the APSP remains a credible incentive and reinforces delivery of our stated growth ambitions over time. To the extent an
award vests, vested shares will be subject to a further two-year holding period. The targets (along with other relevant details of
this grant) will be disclosed in next year’s Annual Report on Remuneration.
SAYE
Thomas Willcocks and James Eyre will continue to be able to participate in any SAYE contract offered to all employees, on
identical terms.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024168
CORPORATE GOVERNANCE
ANNUAL REPORT ON REMUNERATION
CONTINUED
Implementation of Non-executive Director remuneration policy for the year to
31 March 2025
The Committee reviewed the Board Chair’s fee, and resolved to award an inflationary increase of 4% for the 2025 financial
year. The Board Chair and the Executive Directors reviewed Non-executive Director fees and concluded to implement similar
inflationary increases (in line with those awarded to other Board roles, and below the wider workforce average), as set out
below. Accordingly, for the 2025 financial year, Non-executive Director fees will be as follows:
Non-executive Director
Fee at
1 April 2024
Fee from
1 April 2023
Percentage
increase
Board Chair (determined by the Committee) £155,324 £149,350 4.0%
Non-executive Director £52,488 £50,470 4.0%
Additional fee for acting as Senior Independent Director £3,213 £3,090 4.0%
Additional fee for chairing Audit and Risk or Remuneration Committees £7,498 £7,210 4.0%
Executive Director shareholdings (audited information)
The table below shows the shareholding of each Executive Director and their respective shareholding requirement as at
31 March 2024:
Options held
Shares owned
Vested but
not exercised
Unvested
and subject
to performance
Unvested but
not subject
to performance
Shareholding
guideline
% of salary
% current
holding
Requirement
met?
Thomas Willcocks 74,352 — 392,962 — 100% 30% Building
James Eyre 84,986 — 411,856 80,600 100% 45% Building
Current shareholding is based on shares owned outright and valued using the average share price over the 12 months ended 31
March 2024 of 169.9p.
Details of the options held are provided in the table below.
Directors’ share scheme interests (audited information)
Share options
Scheme
Date
of grant
Vested
date
Expiration
date
Exercise
price
Shares
under
option
1 April
2023
Granted
in 2024
Vested
in 2024
Exercised
in 2024
Lapsed
in 2024
Shares
under
option
31 March
2024
Thomas
Willcocks
APSP 25.11.20 25.11.23 25.11.30 — 68,767 — — (68,010) (757) —
21.07.21 21.07.24 21.07.31 — 59,895 — — — — 59,895
19.07.22 19.07.25 19.07.32 — 86,009 — — — — 86,009
26.07.23 26.07.26 26.07.33 — — 247,058 — — — 247,058
Total 214,671 247,058 — (68,010) (757) 392,962
James
Eyre
DBP 19.07.22 19.07.25 19.07.32 — 39,894 — — — — 39,894
26.07.23 26.07.26 26.07.33 — — 27,550 — — — 27,550
— 39,894 27,550 — — — 67,444
APSP 25.11.20 25.11.23 25.11.30 — 42,590 — — (42,121) (469) —
21.07.21 21.07.24 21.07.31 — 90,594 — — — — 90,594
19.07.22 19.07.25 19.07.32 — 133,027 — — — — 133,027
26.07.23 26.07.26 26.07.33 — — 188,235 — — — 188,235
Total 266,211 188,235 — (42,121) (469) 411,856
SAYE 23.12.20 01.03.24 01.09.24 164p 10,975 — — (10,975) — —
22.12.23 01.02.27 01.08.27 141p — 13,156 — — — 13,156
Total 10,975 13,156 — (10,975) — 13,156
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 169
CORPORATE GOVERNANCE
March 2023
EPS
1
Three-year
aggregate
EPS targets
Three-year
aggregate
EPS targets
Three-year
aggregate
EPS targets
Performance % vesting 25.11.20 award 21.07.21 award 19.07.22 award 26.07.23 award
Threshold 25% 28.2p 103.0p 126.4p 98.7p
Maximum 100% 37.5p 117.5p 144.3p 105.6p
1
Based on outcome of final year (year to 31 March 2023). Threshold of 28.2p represents 0% vesting.
Shareholder dilution
The Group’s share incentive plans operate in line with the Investment Association’s Principles of Remuneration, which require
that commitments under all share schemes satisfied by newly issued shares must not exceed 10% of the issued share capital
in any rolling ten-year period, of which up to 5% may be used to satisfy options under executive share schemes. The Group’s
position against the dilution limits at 31 March 2024 was 3.6% for the all schemes limit and 0.9% for executive schemes.
Statement of Directors’ shareholding and share interests (audited information)
Director
31 March
2024
Ordinary
shares
1
31 March
2023
Ordinary
shares
Steve Good 60,000 n/a
Thomas Willcocks 74,352 n/a
James Eyre 84,986 51,007
David McKeith
2
17,941 17,941
Alison Littley — —
Stefan Allanson — —
1
Includes shares held by connected persons.
2
Shareholding as at 26 July 2023.
This Report was approved by the Board of Directors on 12 June 2024 and signed on its behalf by:
ALISON LITTLEY
Chair of the Remuneration Committee
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024170
CORPORATE GOVERNANCE
ANNUAL REPORT ON REMUNERATION
CONTINUED
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 171
CORPORATE GOVERNANCE
The Directors present their Annual Report and the audited consolidated
financial statements for the year ended 31 March 2024.
Principal activities
Accounting reference date
The Company has adopted an accounting period of 52
weeks, and as a result of this, the exact year end date was
31 March 2024. All references to the financial year therefore
relate to the 52 weeks commencing on 3 April 2023. In the
previous year, the accounting period was 52 weeks, beginning
on 4 April 2022 and ending on 2 April 2023.
Results and dividends
The information that fulfils the requirements of the Business
Review, which is incorporated in the Directors’ Report by
reference, including the review of the Group’s business and
future prospects, is included in the Chair’s Statement, the
Chief Executive Officer’s Review and the Strategic Report on
pages 18 to 125. Key performance indicators are shown on
pages 34 and 35.
The Directors recommend a final dividend for the year
ended 31 March 2024 of 6.8p (2023: 6.8p). This follows the
decision to pay an interim dividend earlier in the year of
3.4p (2023: 3.4p).
Directors’ and officers’ liability
insurance and indemnities
The Company purchases liability insurance cover for its
Directors and officers, which gives appropriate cover for
any legal action brought against them. The Company
also provides an indemnity for its Directors (to the extent
permitted by the law) in respect of liabilities which could
occur as a result of their office. This indemnity does not
provide cover should a Director be proven to have acted
fraudulently or dishonestly.
Purchase of own shares
In 2007 the Company formed the Norcros Employee Benefit
Trust (the Trust). The purpose of the Trust is to meet part
of the Company’s liabilities under the Company’s share
schemes. The Trust acquired 550,000 shares during the
year (2023: 87,381). At the Company’s 2023 Annual General
Meeting, the shareholders authorised the Company to make
market purchases of up to 8,927,420 ordinary shares. At
the forthcoming Annual General Meeting, shareholders will
be asked to renew the authority to purchase its own shares
for another year. Details are contained in the AGM Notice
of Meeting, which is available from the Company’s website
www.norcros.com.
Employees/fostering business
relations
Details of the Group’s engagement with, and policies
towards, its employees are contained on pages 56 to 66.
Details of how the Group fosters good business relations
with its suppliers and other business partners are contained
on pages 72 and 73 and 118 to 123. All these details form
part of the Directors’ Report and are incorporated into it by
cross-reference.
Directors
Biographical details of the present Directors are set out
on pages 128 and 129 and on the Company’s website:
www.norcros.com. The Directors who served during the year
and to the date of this Report are set out below:
Director Role
Steve Good Chair (from 26 July 2023)
Non-executive Director
(from 1 July 2023)
David McKeith Non-executive Director
(Acting Chair from 24 January 2023
to 26 July 2023)
Alison Littley Non-executive Director
Stefan Allanson Non-executive Director
Thomas Willcocks Chief Executive Officer
James Eyre Chief Financial Officer
The interests of the Directors in the shares of the Company at
31 March 2024 and 31 March 2023 are shown on page 170.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024172
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
Compliance with Listing Rules
on diversity
The Company’s compliance with Listing Rules LR 9.8.6R(9)
and (10), and LR 14.3.33R(1), relating to Board and Executive
Management diversity, is disclosed in the Nomination
Committee Report on page 147.
Substantial shareholdings
The Company has received notification that the following
were interested in voting rights representing 3% or more of the
Company’s issued share capital at the stated dates:
% of total voting rights
Name
31 March
2024
11 June
2024
FIL Ltd 10.00 11.04
J O Hambro Capital Management Ltd 9.89 10.09
Premier Miton Group 9.03 9.03
Canaccord Genuity Group Inc 8.81 8.80
Allianz Global Investors GmbH 4.54 4.54
M&G plc 4.31 4.31
Artemis Investment Management 4.07 4.07
Energy and greenhouse gas
emissions reporting
The Board has included emissions data in the Sustainability
section on page 77 in order to meet the Company’s obligation
under The Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018 to
disclose the Group’s worldwide emissions of the “greenhouse
gases” (GHGs) attributable to human activity measured in
tonnes of carbon dioxide equivalent.
We have reported on all of the emission sources, being scopes
1, 2 and 3 emissions. These are emissions from activities for
which the Group is responsible, emissions resulting from the
purchase of electricity, heat, steam or cooling by a business
in the Group for its own use, and emissions from the activities
from assets not owned or controlled by the Group, but that
the Group indirectly affects in its value chain. Also reported
are the figures for aggregate energy consumed by the
Group, expressed in kWh. We use the ratio of total emissions
(measured in tonnes of CO
2
e) to the total revenue of the
Group (£392.1m) as our chosen intensity measure. This ratio is
chosen because it enables us to compare energy use relative
to the overall level of business activity in revenue terms,
consistently year on year.
The Group recognises that its scope 1 and 2 GHG emissions
only reflect a proportion of our total carbon footprint across
the value chain. A more holistic approach to reducing our
indirect impacts will be required to deliver the scale of
reductions demanded by the climate science, and we keep
the embodied carbon impacts of the materials we use and of
our logistics supply chain under review.
We have used the GHG Protocol Corporate Accounting and
Reporting Standard (revised edition), data gathered to fulfil
our requirements under the CRC Energy Efficiency scheme,
and emission factors from the UK Government’s GHG
Conversion Factors for Company Reporting 2018. We use
the best information available to us, such as invoice data or
measured energy usage. Where no more suitable data sources
are available, we have used, where practicable, estimates
based on the appropriate information that is available to
the Group.
Political donations
There were no political donations (2023: £nil).
Research and development
The Group’s expenditure on research and development is
disclosed in note 3 to the financial statements and is focused
on the development of new products.
Corporate governance
Details of the Group’s corporate governance are contained
on pages 136 to 139. This Corporate Governance Report forms
part of the Directors’ Report and is incorporated into it by
cross-reference.
Going concern
Having taken into account the principal risks and
uncertainties facing the Group detailed on pages 106 to 117
in the Strategic Report, the Board considers it appropriate to
prepare the financial statements on the going concern basis,
as explained in note 1 to the financial statements.
Financial risk management
The Group’s operations expose it to a variety of financial risks.
Details of the risks faced by the Group are provided in note 21
to the financial statements.
Takeover directive
The Company has only one class of shares, being ordinary
shares, which have equal voting rights. The holdings of
individual Directors are disclosed on page 170.
There are no significant agreements to which the Company
is a party which take effect, alter or terminate in the event of
a change of control of the Company, except for the banking
facilities dated 7 March 2022 in respect of the £130.0m
unsecured revolving credit facility and the £70.0m accordion
facility, which contain mandatory prepayment provisions on a
change of control.
There are no provisions within Directors’ employment
contracts which allow for specific termination payments upon
a change of control.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 173
CORPORATE GOVERNANCE
Statement of disclosure of
information to auditor
In the case of each of the persons who are Directors, the
following applies:
a. So far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware.
b. They have taken all the steps that they ought to have
taken as a Director in order to make themselves aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
Independent auditor
A resolution to re-appoint BDO LLP as auditor to the
Company will be proposed at the Annual General Meeting.
Annual General Meeting
The Annual General Meeting of the Company will take place
at 11.00 am on 24 July 2024 at Addleshaw Goddard LLP, One
St Peter’s Square, Manchester M2 3DE. The notice convening
that meeting, together with the resolutions to be proposed,
are available on request from the Company (info@norcros.
com) or from the Company’s website (www.norcros.com/
investor-centre/shareholder-services/agm). The Directors
recommend that all shareholders vote in favour of all of the
resolutions to be proposed, as the Directors intend to do so
in respect of their own shares, and consider that they are in
the best interests of the Company and the shareholders as
a whole.
By order of the Board
RICHARD COLLINS
Company Secretary
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024174
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
CONTINUED
In respect of the Annual Report, the
Directors’ Remuneration Report and
the financial statements
The Directors are responsible for preparing the Annual
Report, the Directors’ Remuneration Report and the financial
statements in accordance with UK-adopted international
accounting standards and applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
are required to prepare the Group financial statements in
accordance with UK-adopted international accounting
standards and have elected to prepare the Company financial
statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). Under company law, the
Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of
the Group for that period. In preparing the financial statements,
the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable international accounting
standards have been followed for the Group financial
statements and United Kingdom Accounting Standards,
comprising FRS 101, have been followed for the Company
financial statements, subject to any material departures
disclosed and explained in the financial statements;
• make judgements and accounting estimates that are
reasonable and prudent;
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and Company will continue in business; and
• prepare a Directors’ Report, a Strategic Report and a
Directors’ Remuneration Report, which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group and Company’s transactions and disclose with
reasonable accuracy, at any time, the financial position of
the Group and Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report
comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual
Report and Accounts, taken as a whole, are fair, balanced
and understandable and provide the information necessary
for shareholders to assess the Group’s position and
performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report
and the financial statements are made available on a website.
Financial statements are published on the Company’s
website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Directors’ responsibilities pursuant
to DTR 4
The Directors confirm, to the best of their knowledge, that:
• the financial statements have been prepared in
accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Group; and
• the Annual Report includes a fair review of the
development and performance of the business and the
financial position of the Group and Company, together
with a description of the principal risks and uncertainties
that they face.
THOMAS WILLCOCKS JAMES EYRE
Chief Executive Officer Chief Financial Officer
12 June 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 175
CORPORATE GOVERNANCE
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
Independent Auditor’s Report
178
Consolidated Income Statement
187
Consolidated Statement of
Comprehensive Income
187
Consolidated Balance Sheet
188
Consolidated Cash Flow Statement
189
Consolidated Statement of Changes in Equity
190
Notes to the Group Accounts
191
Parent Company Balance Sheet
226
Parent Company Statement of Changes
in Equity
227
Notes to the Parent Company Accounts
228
FINANCIAL
STATEMENTS
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024176
FINANCIAL STATEMENTS
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 177
FINANCIAL STATEMENTS
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 March 2024 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Norcros plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 31 March 2024 which comprise the consolidated income statement, the consolidated statement of comprehensive income,
the consolidated and parent company balance sheets, the consolidated cash flow statement, the consolidated and parent
company statement of changes in equity and notes to the financial statements, including a summary of material accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law
and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation
of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial
Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion. Our audit opinion is consistent with the additional report to the Audit and Risk Committee.
Independence
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors on 30 July 2020 to audit
the financial statements for the year ended 31 March 2021 and subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is four years, covering the years ended 31 March 2021 to 31 March 2024. We
remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by
that standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
• We obtained management’s assessment that supports the Directors’ conclusions with respect to the disclosures provided
around going concern;
• We challenged the rationale for the assumptions utilised in the forecasts, using our knowledge of the business, the sector and
wider commentary available from competitors and peers;
• We considered the appropriateness of management’s forecasts by testing their mechanical accuracy, assessing historical
forecasting accuracy and understanding management’s consideration of downside sensitivity analysis;
• We obtained an understanding of the financing facilities from the finance agreements, including the nature of the facilities,
covenants and attached conditions;
• We assessed the facility and covenant headroom calculations, and reperformed sensitivities on management’s base case and
stressed case scenarios; and
• We reviewed the wording of the going concern disclosures, and assessed its consistency with the directors’ assessment of
going concern, including underlying management forecasts.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024178
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NORCROS PLC
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
Overview
Coverage
94% (2023: 86%) of Group profit before tax
72% (2023: 96%) of Group revenue
80% (2023: 91%) of Group total assets
Key audit
matters
2024 2023
Valuation of pension liabilities
Impairment of goodwill and intangible assets
Acquisition accounting
Acquisition accounting was removed as a KAM in the current year, as there were no acquisitions in
the current year. The prior year KAM was related to the acquisition of Grant Westfield.
Materiality
Group financial statements as a whole
£1.3m (2023: £1.6m) based on 5% (2023: 5%) of Profit before tax adjusted for certain non-underlying
items and exceptional costs.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
• Our Group audit scope focused on the Group’s principal operating locations, being those in the UK, Ireland and South Africa.
In the UK and Ireland, Norcros operates under seven separate divisions: Triton, Merlyn, VADO, Johnson Tiles, Grant Westfield,
Croydex and Abode. In South Africa there are four divisions: Johnson Tiles South Africa, TAL, House of Plumbing and Tile Africa.
• Consistent with the group’s operations, we scoped our audit at a divisional level. In the UK, full scope audits were performed
by the Group engagement team on the significant components, Triton, and the Parent Company. The Grant Westfield full
scope audit was performed by a component auditor from another BDO LLP office in Scotland.
• The four South African divisions together with the Merlyn division, whose finance team is based in Ireland, were
considered to be significant components and were subject to full scope audits by BDO member firms in South Africa and
Ireland respectively.
• The remaining components of the Group were considered non-significant and these components were principally subject to
analytical review procedures by the Group engagement team.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as
a whole. Our involvement with component auditors included the following:
The Group audit team were involved at all stages of the audit process, directing the planning and risk assessment work.
Detailed Group instructions were sent to all component auditors, which included the principal areas to be covered by the audits,
materiality levels, significant risks, fraud risks and other significant auditing and accounting matters, and further set out the
information to be reported to the Group audit team.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 179
FINANCIAL STATEMENTS
The Group engagement team attended planning calls with the South Africa, Ireland and Scotland teams where the scope of
their audit work and planned audit procedures was discussed, as well as attending planning calls with divisional management at
each component. Alongside early planning calls, the Group team also visited South Africa to meet with the component team at
the planning stage to ensure the planned audit approach was tailored and risk focused.
The Group engagement team reviewed the audit working papers of the component auditors and attended all completion
meetings with the respective divisional management teams following completion of the component audit work.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements
included:
• Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their
potential impacts on the financial statements and adequately disclose climate-related risks within the annual report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate
change affects this particular sector;
• Involvement of internal climate-related experts in evaluating management’s risk assessment; and
• Review of the minutes of Board and Audit and Risk Committee meetings and performed a risk assessment as to how the
impact of the Group’s commitment as set out in the Sustainability Report on pages 48 to 89 may affect the financial
statements and our audit.
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in management’s going concern assessment and viability assessment.
We also assessed the consistency of management’s disclosures included as Statutory Other Information on pages 124 and 125
with the financial statements and with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by
climate-related risks.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024180
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NORCROS PLC
CONTINUED
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of pension
liabilities
Refer to note 1 -
summary of significant
accounting policies,
key sources of
estimation uncertainty
and critical judgements
in applying the group’s
accounting policies
and also to Note 24
Retirement benefit
obligations.
The Group has a defined benefit
pension plan with a net scheme asset
of £16.5m (2023: £14.9m).
We consider there to be a significant
risk concerning the appropriateness
of the actuarial assumptions applied
in calculating the Group’s defined
benefit pension scheme liability of
£275.0m (2023: £285.0m) as shown in
Note 24.
The valuation of the Group’s pension
scheme liability was performed by
management’s external actuary and
involves significant judgement from
the directors and the actuary in the
choice of discount rate used and in the
key sources of estimation uncertainty,
in particular in relation to the
inflation assumptions and mortality
rates, as described in the Group’s
accounting policies.
We performed the following in this area:
We obtained the report from management’s actuary used
in valuing the scheme’s liabilities, from which we assessed
the appropriateness of the assumptions underpinning the
valuation of the scheme liabilities.
Specifically, we challenged the discount rate, inflation
and mortality assumptions applied in the calculation by
using our auditor engaged pension expert to assist us to
benchmark the assumptions applied against comparable
third-party data and assessed the appropriateness of the
assumptions in the context of the Group’s own position.
Key observations:
Based on our audit work, we considered the assumptions
used in the calculation of the pension liability were within
an acceptable range.
Impairment of
goodwill and
intangible assets
Refer to note 1 -
summary of significant
accounting policies,
key sources of
estimation uncertainty
and critical judgements
in applying the Group’s
accounting policies
and also to Notes 11
and 12 Goodwill and
Intangible Assets.
The Directors are required to undertake
an annual assessment of the carrying
value of goodwill and intangibles.
The impairment reviews performed
by management on cash generating
units (CGUs) contain a number of
judgements and estimates including
long term growth rates, forecast cash
flows, forecast timeframe, potential
impact of climate change factors
and discount rates to determine the
recoverable amounts on a value in
use basis.
Therefore, the Directors exercise
significant judgement in determining
the assumptions used in the
impairment annual review.
We performed the following in this area:
• Obtained the impairment model and challenged the
key assumptions within, such as, the cash generating
units (CGUs) allocation, cash flow projections,
discount rates and long term growth rates.
• Involved our internal valuations expert to review the
valuation methodology and support our assessment
of the discount rates applied, where the rate is a
sensitive variable.
• Challenged sensitivity analysis performed by
management and where necessary performed further
sensitivity assessments.
• Considered the appropriateness of the disclosures
within the financial statements in line with the
requirements of IAS 36.
Key observations:
Based on our audit work, we considered the assumptions
used in the impairment calculations were within an
acceptable range.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 181
FINANCIAL STATEMENTS
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements Parent company financial statements
2024
£m
2023
£m
2024
£m
2023
£m
Materiality
1.3 1.6 0.32 0.48
Basis for
determining
materiality
5% of Profit before tax
adjusted for certain
non-underlying
items, including
exceptional items.
5% of Profit before tax
adjusted for certain
non-underlying
items, including
acquisition costs and
exceptional items.
Set based on 30% of
Group materiality.
Set based on 30% of
Group materiality.
Rationale for
the benchmark
applied
We considered that
using this basis
for determining
materiality was most
appropriate based on
the underlying trading
performance of the
Group, eliminating
non-recurring items
and in the interests
of the users of the
financial statements.
We considered that
using this basis
for determining
materiality was most
appropriate based on
the underlying trading
performance of the
Group, eliminating
non-recurring items
and in the interests
of the users of the
financial statements.
Calculated as a
percentage of Group
materiality for Group
reporting purposes,
taking account of the
aggregation risk.
Calculated as a
percentage of Group
materiality for Group
reporting purposes,
taking account of the
aggregation risk.
Performance
materiality
70% of materiality 70% of materiality 70% of materiality 70% of materiality
Basis for
determining
performance
materiality
70%, based on our
knowledge of the
aggregation risk, the
control environment
and historic
misstatement levels.
70%, based on our
knowledge of the
aggregation risk, the
control environment
and historic
misstatement levels.
70%, based on our
knowledge of the
aggregation risk, the
control environment
and historic
misstatement levels.
70%, based on our
knowledge of the
aggregation risk, the
control environment
and historic
misstatement levels.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024182
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NORCROS PLC
CONTINUED
Parent Company statutory materiality
We set materiality for the statutory audit of the Parent Company at £0.32m (2023: £0.48m) as noted above. This was determined
as the most appropriate measure on which to base materiality for the statutory audit of the Parent Company financial
statements as the principal activity of the company is that of a holding company. We further applied performance materiality
levels of 70% of the statutory materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, apart from
the Parent Company whose materiality is set out above, based on a percentage of between 25% and 50% (2023: 30% and
50%) of Group materiality dependent on the size and our assessment of the risk of material misstatement of that component.
Component materiality ranged from £0.32m to £0.65m (2023: £0.48m to £0.77m). In the audit of each component, we further
applied performance materiality levels of 70% (2023: 70%) of the component materiality to our testing to ensure that the risk of
errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report to them all individual audit differences in excess of
£39,000 (2023: £48,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
Annual Report and Accounts 2024 other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going
concern and
longer-term
viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on page 173; and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 117.
Other Code
provisions
• Directors’ statement on fair, balanced and understandable set out on page 141;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 106;
• The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 139; and
• The section describing the work of the Audit and Risk Committee set out on page 140.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 183
FINANCIAL STATEMENTS
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic
report and
Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in the
Strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Corporate
governance
statement
In our opinion, based on the work undertaken in the course of the audit the information about
internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance
and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules),
is consistent with the financial statements and has been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in
this information.
In our opinion, based on the work undertaken in the course of the audit, information about the Parent
Company’s corporate governance code and practices and about its administrative, management and
supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
We have nothing to report arising from our responsibility to report if a corporate governance
statement has not been prepared by the Parent Company.
Matters on
which we
are required
to report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for
our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024184
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NORCROS PLC
CONTINUED
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management, those charged with governance and Audit and Risk Committee; and
• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations.
We have considered the significant laws and regulations to be the applicable accounting framework, UK tax legislation, the
Companies Act 2006 and the Listing Rules.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on
the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified
such laws and regulations to be Health and Safety and the Bribery Act 2010.
Our procedures in respect of the above included:
• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit to ensure compliance with tax legislation; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with management, those charged with governance and the Audit and Risk Committee regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Detailed discussion amongst the audit engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud; and
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted
by these.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 185
FINANCIAL STATEMENTS
Based on our risk assessment, we considered the areas most susceptible to fraud to be posting inappropriate journal entries,
management bias in accounting estimates and revenue cut-off within the key revenue streams.
Our procedures in respect of the above included:
• Obtaining an understanding of the control environment in monitoring compliance with laws and regulations.
• Discussions with management, the Audit and Risk Committee, the Directors and internal legal counsel concerning
consideration of known or suspected instances of litigation, non-compliance with laws and regulation and fraud;
• Use of forensic specialists to assist with the risk assessment at the planning stage and to help design appropriate audit
procedures to detect material fraud;
• Reviewing minutes of Board meetings throughout the period to corroborate our enquiries and to identify any other matters
not already disclosed by management and the Directors;
• Challenging assumptions and judgements made by management in their significant accounting estimates, in particular
in relation to the Group’s defined benefit pension scheme liabilities, impairment of goodwill and intangibles and customer
rebates and promotional support accruals;
• Testing a sample of revenue transactions around the year end to supporting documentation (including invoice and proof of
delivery) for all significant components to assess if the revenue had been recorded in the correct period;
• Identifying and agreeing journal entries to supporting documentation, in particular any journal entries posted with unusual
account combinations or including specific keywords;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud; and
• Agreeing the financial statement disclosures to underlying supporting documentation.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
including component engagement teams who were all deemed to have appropriate competence and capabilities and remained
alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. For component engagement
teams, we also reviewed the results of their work performed in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
GARY HARDING (SENIOR STATUTORY AUDITOR)
For and on behalf of BDO LLP, Statutory Auditor
Manchester, UK
12 June 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024186
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NORCROS PLC
CONTINUED
Notes
| 2024 | 2023 | ||
| £m | £m | ||
| Continuing operations | |||
Revenue | 2 | ||
Underlying operating profit | |||
IAS 19R administrative expenses | 24 | ( | ( |
Acquisition related costs | 5 | ( | ( |
Exceptional operating items | 5 | ( | |
Operating profit | |||
Finance costs | 6 | ( | ( |
IAS 19R finance credit | 24 | ||
Profit before taxation | |||
Taxation | 7 | ( | ( |
Profit for the year attributable to equity holders of the Company | |||
| Earnings per share attributable to equity holders of the Company | |||
| Basic earnings per share: | |||
From profit for the year | 9 | ||
| Diluted earnings per share: | |||
From profit for the year | 9 | ||
Weighted average number of shares for basic earnings per share (m) | 9 | ||
| Alternative performance measures | |||
Underlying profit before taxation (£m) | 8 | ||
Underlying earnings (£m) | 8 | ||
Basic underlying earnings per share | 9 | ||
Diluted underlying earnings per share | 9 |
Notes
| 2024 | 2023 | ||
| £m | £m | ||
Profit for the year | |||
| Other comprehensive income and expense: | |||
| Items that will not subsequently be reclassified to the Income Statement | |||
Actuarial losses on retirement benefit obligations | 24 | ( | ( |
| Items that may be subsequently reclassified to the Income Statement | |||
Cash flow hedges – fair value gain/(loss) in year | 21 | ( | |
Foreign currency translation of foreign operations | ( | ( | |
Other comprehensive expense for the year | ( | ( | |
Total comprehensive result for the year attributable to equity holders of the Company |
Items in this statement are disclosed net of tax.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 187
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2024
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Year ended 31 March 2024
Notes
| 2024 | 2023 | ||
| £m | £m | ||
| Non-current assets | |||
Goodwill | 11 | ||
Intangible assets | 12 | ||
Property, plant and equipment | 13 | ||
Deferred tax asset | 22 | ||
Pension scheme asset | 24 | ||
Right of use assets | 14 | ||
| Current assets | |||
Inventories | 15 | ||
Trade and other receivables | 16 | ||
Cash and cash equivalents | 17 | ||
| Current liabilities | |||
Trade and other payables | 18 | ( | ( |
Lease liabilities | 19 | ( | ( |
Current tax liabilities | ( | ( | |
Derivative financial instruments | 21 | ( | ( |
Provisions | 23 | ( | ( |
( | ( | ||
Net current assets | |||
Total assets less current liabilities | |||
| Non-current liabilities | |||
Financial liabilities – borrowings | 20 | ( | ( |
Lease liabilities | 19 | ( | ( |
Deferred tax liabilities | 22 | ( | ( |
Other non-current liabilities | 26 | ( | ( |
Provisions | 23 | ( | ( |
( | ( | ||
Net assets | |||
| Financed by: | |||
Share capital | 25 | ||
Share premium | |||
Retained earnings and other reserves | |||
Total equity |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024188
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
At 31 March 2024
Notes
| 2024 | 2023 | ||
| £m | £m | ||
Cash generated from operations | 27 | ||
Income taxes paid | ( | ( | |
Interest paid | ( | ( | |
Net cash generated from operating activities | |||
| Cash flows from investing activities | |||
Purchase of property, plant and equipment and intangible assets | ( | ( | |
Acquisition of subsidiary undertakings net of cash acquired | ( | ||
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Proceeds from issue of ordinary share capital | 25 | ||
Purchase of treasury shares | ( | ||
Costs of raising debt finance | ( | ||
Principal element of lease payments | ( | ( | |
Drawdown of borrowings | |||
Repayment of borrowings | ( | ( | |
Dividends paid to the Company’s shareholders | 28 | ( | ( |
Net cash (used in)/generated from financing activities | ( | ||
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at the beginning of the year | |||
Exchange movements on cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the end of the year |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 189
FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March 2024
| Ordinary | |||||||
| share | Share | Treasury | Hedging | Translation | Retained | Tot a l | |
| capital | premium | reserve | reserve | reserve | earnings | equity | |
| £m | £m | £m | £m | £m | £m | £m | |
At 1 April 2022 | ( | ( | |||||
| Comprehensive income: | |||||||
Profit for the year | |||||||
| Other comprehensive income: | |||||||
| Actuarial gain on retirement | |||||||
benefit obligations | ( | ( | |||||
Fair value gain on cash flow hedges | ( | ( | |||||
| Foreign currency translation | |||||||
adjustments | ( | ( | |||||
| Total other comprehensive | |||||||
expense for the year | ( | ( | ( | ( | |||
| Transactions with owners: | |||||||
Shares issued | |||||||
Dividends paid | ( | ( | |||||
Value of employee services | |||||||
At 31 March 2023 | ( | ( | ( | ||||
| Comprehensive income: | |||||||
Profit for the year | |||||||
| Other comprehensive expense: | |||||||
| Actuarial loss on retirement | |||||||
benefit obligations | ( | ( | |||||
Fair value gain on cash flow hedges | |||||||
| Foreign currency translation | |||||||
adjustments | ( | ( | |||||
Total other comprehensive income/(expense) for the year | ( | ( | ( | ||||
| Transactions with owners: | |||||||
Purchase of treasury shares | ( | ( | |||||
Dividends paid | ( | ( | |||||
Settlement of share option schemes | ( | ( | |||||
Value of employee services | |||||||
At 31 March 2024 | ( | ( |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024190
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
Year ended 31 March 2024
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 191
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS
Year ended 31 March 2024
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024192
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 193
FINANCIAL STATEMENTS
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024194
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 195
FINANCIAL STATEMENTS
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024196
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 197
FINANCIAL STATEMENTS
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024198
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
1. Group accounting policies continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 199
FINANCIAL STATEMENTS
2. Segmental reporting
The Group operates in two main geographical areas: the UK and South Africa. All inter-segment transactions are made on an
arm’s length basis. The chief operating decision maker (being the Board) assesses performance and allocates resources based
on geography and accordingly segments have been determined on this basis. Corporate costs are allocated to segments on the
basis of external turnover. Finance income and costs are not split between the segments.
Year ended 31 March 2024
| South | |||
| UK | Africa | Group | |
| £m | £m | £m | |
Revenue | 281.9 | 110.2 | 392.1 |
Underlying operating profit | 38.4 | 4.8 | 43.2 |
IAS 19R administrative expenses | (1.3) | – | (1.3) |
Acquisition related costs | (4.1) | (0.2) | (4.3) |
Exceptional operating items | 2.3 | – | 2.3 |
Operating profit | 35.3 | 4.6 | 39.9 |
Finance costs | (7.3) | ||
Profit before taxation | 32.6 | ||
Taxation | (5.8) | ||
Profit for the year | 26.8 | ||
Net debt excluding lease liabilities | (37.3) | ||
Segmental assets | 334.6 | 90.7 | 425.3 |
Segmental liabilities | (171.8) | (31.1) | (202.9) |
Additions to tangible, intangibles and right of use assets | 7.2 | 4.1 | 11.3 |
Depreciation and amortisation | 10.9 | 4.6 | 15.5 |
Year ended 31 March 2023
| South | |||
| UK | Africa | Group | |
| £m | £m | £m | |
Revenue | 295.8 | 145.2 | 441.0 |
Underlying operating profit | 37.2 | 10.1 | 47.3 |
IAS 19R administrative expenses | (1.6) | – | (1.6) |
Acquisition related costs | (8.2) | (0.2) | (8.4) |
Exceptional operating items | (9.8) | – | (9.8) |
Operating profit | 17.6 | 9.9 | 27.5 |
Finance costs | (5.8) | ||
Profit before taxation | 21.7 | ||
Taxation | (4.9) | ||
Profit for the year | 16.8 | ||
Net debt excluding lease liabilities | (49.9) | ||
Segmental assets | 340.5 | 102.5 | 443.0 |
Segmental liabilities | (195.6) | (37.0) | (232.6) |
Additions to goodwill | 47.7 | – | 47.7 |
Additions to tangible and right of use assets | 5.9 | 3.7 | 9.6 |
Depreciation and amortisation | 10.8 | 5.0 | 15.8 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024200
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
2. Segmental reporting continued
| 2024 | 2023 | |
| £m | £m | |
UK | 251.0 | 262.0 |
Africa | 111.4 | 147.5 |
Rest of World | 29.7 | 31.5 |
392.1 | 441.0 |
| 2024 | 2023 | |
| £m | £m | |
Staff costs (see note 4) | 75.8 | 76.9 |
Depreciation of property, plant and equipment (all owned assets) | 4.0 | 4.9 |
Amortisation of intangible assets | 6.8 | 6.3 |
Depreciation of right of use assets | 4.7 | 4.6 |
| Operating lease rentals payable for short-term and low value leases: | ||
– plant and machinery | 1.5 | 1.2 |
– other | 0.7 | 0.6 |
Research and development expenditure | 5.3 | 5.5 |
| 2024 | 2023 | |
| £m | £m | |
Audit of the Parent Company and consolidated financial statements | 0.2 | 0.2 |
Audit of the Company’s subsidiaries | 0.5 | 0.4 |
0.7 | 0.6 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 201
FINANCIAL STATEMENTS
4. Employees
| 2024 | 2023 | |
| £m | £m | |
| Staff costs including Directors’ remuneration: | ||
– wages and salaries | 66.3 | 67.3 |
– social security costs | 4.7 | 4.4 |
– share-based payments (see note 10) | 0.9 | 1.2 |
| Pension costs: | ||
– defined contribution (see note 24) | 3.9 | 4.0 |
Total staff costs | 75.8 | 76.9 |
| 2024 | 2023 | |
| Number | Number | |
| Average monthly numbers employed: | ||
– UK | 1,171 | 1,254 |
– overseas | 1,099 | 1,192 |
2,270 | 2,446 |
Full details of Directors’ remuneration can be found in the Remuneration Report on pages 150 to 170.
5. Acquisition related costs and exceptional operating items
An analysis of acquisition related costs and exceptional operating items is shown below:
Acquisition related costs
| 2024 | 2023 | |
| £m | £m | |
| Intangible asset amortisation | 6.5 | 6.2 |
| Advisory fees | 0.2 | 1.4 |
| Deferred contingent consideration | (3.0) | – |
| Deferred remuneration | 0.6 | 0.8 |
4.3 | 8.4 |
1
2
3
4
1
Non-cash amortisation charges in respect of acquired intangible assets.
2
Professional advisory fees incurred in connection with the Group’s business combination activities.
3
Relates to the release of an element of deferred contingent consideration arising on the acquisition of Grant Westfield.
4
In accordance with IFRS 3, a proportion of the deferred contingent consideration is treated as remuneration and, accordingly, is expensed to the Income Statement as incurred. In
the current year, this represents a cost of £0.6m (2023: £0.8m) in relation to the Grant Westfield acquisition.
Exceptional operating items
| 2024 | 2023 | |
| £m | £m | |
Restructuring costs 1 | 1.7 | 4.8 |
Reversal of impairment 2 | (4.0) | – |
| Impairment | – | 5.0 |
(2.3) | 9.8 |
3
1
The exceptional restructuring cost charge in the current year of £1.7m was incurred in relation to restructuring programs at Johnson Tiles and the move to new premises at VADO. In
the prior year, exceptional restructuring costs of £4.8m were incurred in relation to the restructuring program implemented at Norcros Adhesives.
2
The reversal of previous land and buildings impairments of the Johnson Tiles UK site, following an independent valuation (see note 13).
3
As a result of demand uncertainty, the Johnson Tiles UK tangible and right of use assets were impaired in the prior year with a non-cash impairment charge of £5.0m recognised as
an exceptional item in the Income Statement.
| 2024 | 2023 | |
| £m | £m | |
Interest payable on bank borrowings | 5.2 | 3.7 |
Interest on lease liabilities | 1.6 | 1.8 |
Discounting of deferred contingent consideration | 0.9 | 0.6 |
Amortisation of costs of raising debt finance | 0.4 | 0.3 |
Finance costs | 8.1 | 6.4 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024202
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
| 2024 | 2023 | |
| £m | £m | |
| Current | ||
UK taxation | 3.8 | 1.8 |
Overseas taxation | 3.2 | 4.6 |
Prior year adjustment | 1.1 | (0.7) |
Total current taxation | 8.1 | 5.7 |
| Deferred | ||
Origination and reversal of temporary differences | (0.3) | (0.8) |
Prior year adjustment | (2.0) | – |
Total deferred taxation | (2.3) | (0.8) |
Total tax charge | 5.8 | 4.9 |
| 2024 | 2023 | |
| £m | £m | |
Profit before tax | 32.6 | 21.7 |
Tax calculated at domestic tax rates applicable to profits in the respective countries | 7.0 | 4.7 |
| Tax effects of: | ||
– adjustments in respect of prior years | (0.9) | (0.7) |
– non-taxable income | (1.0) | – |
– expenses not deductible for tax purposes | 0.7 | 0.9 |
Total tax charge | 5.8 | 4.9 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 203
FINANCIAL STATEMENTS
8. Alternative performance measures
The Group makes use of a number of alternative performance measures to assess business performance and provide additional
useful information to shareholders. Such alternative performance measures should not be viewed as a replacement of, or
superior to, those defined by Generally Accepted Accounting Principles (GAAP). Definitions of alternative performance
measures used by the Group and, where relevant, reconciliations from GAAP-defined reporting measures to the Group’s
alternative performance measures are provided below.
The alternative performance measures used by the Group are:
Measure | Definition |
Underlying operating profit | Operating profit before IAS 19R administrative expenses, acquisition related costs and exceptional |
| operating items. | |
Underlying profit before taxation | Profit before taxation before IAS 19R administrative expenses, acquisition related costs, exceptional |
| operating items, amortisation of costs of raising finance, discounting of deferred contingent | |
| consideration, discounting of property lease provisions and finance income relating to pension schemes. | |
Underlying taxation | The Group’s effective underlying tax rate applied to underlying profit before tax. |
Underlying earnings | Underlying profit before tax less underlying taxation. |
Underlying capital employed | Capital employed on a pre-IFRS 16 basis adjusted for business combinations, where relevant, to reflect |
| the net assets in both the opening and closing capital employed balances, and the average impact of | |
| exchange rate movements. | |
Underlying operating margin | Underlying operating profit expressed as a percentage of revenue. |
| Underlying return on capital | Underlying operating profit on a pre-IFRS 16 basis expressed as a percentage of the average of |
| employed (ROCE) | opening and closing underlying capital employed. |
Basic underlying earnings per share | Underlying earnings divided by the weighted average number of shares for basic earnings per share. |
Diluted underlying earnings per share | Underlying earnings divided by the weighted average number of shares for diluted earnings per share. |
Underlying EBITDA | Underlying EBITDA is derived from underlying operating profit before depreciation and amortisation |
| excluding the impact of IFRS 16 in line with our banking covenants. | |
Underlying operating cash flow | Cash generated from continuing operations before cash outflows from exceptional items and |
| acquisition related costs and pension fund deficit recovery contributions. | |
Underlying net (debt)/cash | Underlying net (debt)/cash is the net of cash, capitalised costs of raising finance and total borrowings. |
| IFRS 16 lease commitments are not included in line with our banking covenants. | |
Pro-forma underlying EBITDA | An annualised underlying EBITDA figure used for the purpose of calculating banking covenant ratios. |
Pro-forma leverage | Net debt expressed as a ratio of pro-forma underlying EBITDA. |
Reconciliations from GAAP-defined reporting measures to the Group’s alternative
performance measures
Consolidated Income Statement
(A) UNDERLYING PROFIT BEFORE TAXATION AND UNDERLYING EARNINGS
| 2024 | 2023 | |
| £m | £m | |
Profit before taxation | 32.6 | 21.7 |
| Adjusted for: | ||
– IAS 19R administrative expenses | 1.3 | 1.6 |
– IAS 19R finance income | (0.8) | (0.6) |
– acquisition related costs (see note 5) | 4.3 | 8.4 |
– exceptional operating items (see note 5) | (2.3) | 9.8 |
– amortisation of costs of raising finance | 0.4 | 0.3 |
– discounting of deferred contingent consideration | 0.9 | 0.6 |
Underlying profit before taxation | 36.4 | 41.8 |
Taxation attributable to underlying profit before taxation | (7.6) | (8.3) |
Underlying earnings | 28.8 | 33.5 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024204
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
8. Alternative performance measures continued
(B) UNDERLYING OPERATING PROFIT AND EBITDA (PRE-IFRS 16)
| 2024 | 2023 | |
| £m | £m | |
Operating profit | 39.9 | 27.5 |
| Adjusted for: | ||
– IAS 19R administrative expenses | 1.3 | 1.6 |
– acquisition related costs (see note 5) | 4.3 | 8.4 |
– exceptional operating items (see note 5) | (2.3) | 9.8 |
Underlying operating profit | 43.2 | 47.3 |
| Adjusted for: | ||
– depreciation and amortisation (owned assets) | 4.3 | 5.0 |
– depreciation of leased assets (see note 14) | 4.7 | 4.6 |
– lease costs (see note 19) | (6.5) | (6.4) |
Underlying EBITDA (pre-IFRS 16) | 45.7 | 50.5 |
Consolidated Cash Flow Statement
(A) UNDERLYING OPERATING CASH FLOW
| 2024 | 2023 | |
| £m | £m | |
Cash generated from operations (see note 27) | 49.0 | 37.7 |
| Adjusted for: | ||
– cash flows from exceptional items and acquisition related costs (see note 27) | 3.4 | 3.3 |
– pension fund deficit recovery contributions (see note 24) | 4.0 | 3.8 |
Underlying operating cash flow | 56.4 | 44.8 |
Consolidated Balance Sheet
(A) UNDERLYING CAPITAL EMPLOYED AND UNDERLYING RETURN ON CAPITAL EMPLOYED
| 2024 | 2023 | |
| £m | £m | |
Net assets | 222.4 | 210.4 |
| Adjusted for: | ||
– pension scheme asset (net of associated tax) | (12.4) | (11.2) |
– right of use assets (IFRS 16) | (18.0) | (20.0) |
– lease liabilities (IFRS 16) | 22.2 | 24.7 |
– cash and cash equivalents | (30.8) | (29.0) |
– financial liabilities – borrowings | 68.1 | 78.9 |
251.5 | 253.8 | |
Foreign exchange adjustment | (1.9) | 1.3 |
Adjustment for acquisitions | – | 58.2 |
Underlying capital employed | 249.6 | 313.3 |
Average underlying capital employed | 251.7 | 246.3 |
Underlying operating profit (pre-IFRS 16) | 41.4 | 45.5 |
Underlying return on capital employed | 16.4% | 18.5% |
Items are excluded from alternative performance measures in order to align with the way the Group assesses business performance.
Underlying operating profit (pre-IFRS 16) of £41.4m (2023: £45.5m) is calculated by adjusting underlying operating profit of
£43.2m (2023: £47.3m) for the add back of lease costs of £6.5m (2023: £6.4m) and the deduction of depreciation of leased
assets of £4.7m (2023: £4.6m).
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 205
FINANCIAL STATEMENTS
9. Earnings per share
Basic EPS is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in
issue during the year, excluding those held in the Norcros Employee Benefit Trust.
For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive
ordinary shares. At 31 March 2024, the potential dilutive ordinary shares amounted to 811,567 (2023: 1,370,679) as calculated in
accordance with IAS 33.
The calculation of EPS is based on the following profits and numbers of shares:
| 2024 | 2023 | |
| £m | £m | |
Profit for the year | 26.8 | 16.8 |
| 2024 | 2023 | |
| Number | Number | |
Weighted average number of shares for basic earnings per share | 89,003,947 | 88,129,432 |
Share options | 811,567 | 1,370,679 |
Weighted average number of shares for diluted earnings per share | 89,815,514 | 89,500,111 |
2024 | 2023 | |
| Basic earnings per share: | ||
From profit for the year | 30.1p | 19.1p |
| Diluted earnings per share: | ||
From profit for the year | 29.8p | 18.8p |
Basic and diluted underlying earnings per share
Basic and diluted underlying earnings per share have also been provided, which reflects underlying earnings from continuing
operations divided by the weighted average number of shares set out above.
| 2024 | 2023 | |
| £m | £m | |
Underlying earnings (see note 8) | 28.8 | 33.5 |
2024 | 2023 | |
Basic underlying earnings per share | 32.4p | 38.0p |
Diluted underlying earnings per share | 32.1p | 37.4p |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024206
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
10. Share-based payments
| Weighted | ||||||||||
| average | ||||||||||
| Exercise | share price | Date from | ||||||||
| price | at date of | 1 April | 31 March | which | Expiry | |||||
| per share | exercise | 2023 | Granted | Exercised | Lapsed | 2024 | exercisable | date | ||
| Approved Performance Share Plan | Nil | – | 2,101 | – | – | – | 2,101 | 16.11.20 | 16.11.27 | |
| 2017 (APSP) | ||||||||||
| Approved Performance Share Plan | Nil | – | – | – | – | – | – | 25.07.21 | 25.07.28 | |
| 2018 (APSP) | ||||||||||
| Approved Performance Share Plan | Nil | – | – | – | – | – | – | 23.07.22 | 23.07.29 | |
| 2019 (APSP) | ||||||||||
| Approved Performance Share Plan | Nil | 167p | 847,431 | – | (708,738) | (91,544) | 47,149 | 25.11.23 | 25.11.30 | |
| 2020 (APSP) | ||||||||||
| Approved Performance Share Plan | Nil | – | 631,795 | – | – | (25,080) | 606,715 | 20.07.24 | 21.07.31 | |
| 2021 (APSP) | ||||||||||
| Approved Performance Share Plan | Nil | – | 1,069,374 | – | – | (20,597) | 1,048,777 | 19.07.25 | 19.07.32 | |
| 2022 (APSP) | ||||||||||
| Approved Performance Share Plan | Nil | – | – | 1,622,919 | – | (20,575) | 1,602,344 | 26.07.26 | 26.07.33 | |
| 2023 (APSP) | ||||||||||
Deferred Bonus Plan 2021 (DBP) | Nil | – | 109,455 | – | – | – | 109,455 | 25.11.23 | 25.11.30 | |
Deferred Bonus Plan 2022 (DBP) | Nil | – | 128,992 | – | – | – | 128,992 | 19.07.25 | 19.07.32 | |
Deferred Bonus Plan 2023 (DBP) | Nil | – | – | 72,770 | – | – | 72,770 | 26.07.26 | 26.07.33 | |
Save As You Earn Scheme (12) | (SAYE) | 208p | 200p | 111,953 | – | – | (111,953) | – | 01.03.23 | 31.08.23 |
Save As You Earn Scheme (13) | (SAYE) | 164p | 180p | 572,883 | – | (328,404) | (154,277) | 90,202 | 01.03.24 | 31.08.24 |
Save As You Earn Scheme (14) | (SAYE) | 266p | – | 73,221 | – | – | (37,751) | 35,470 | 01.03.25 | 31.08.25 |
Save As You Earn Scheme (15) | (SAYE) | 161p | – | 707,729 | – | (1,118) | (335,371) | 371,240 | 01.03.26 | 31.08.26 |
Save As You Earn Scheme (16) | (SAYE) | 141p | – | – | 780,078 | – | (18,681) | 761,397 | 01.03.27 | 31.08.27 |
Details of the terms of the APSP, DBP and SAYE schemes are disclosed in the Directors’ Remuneration Report.
For SAYE schemes, the weighted average exercise price of all outstanding share options at 31 March 2024 was 152p (2023: 171p).
The weighted average exercise price for APSP and DBP schemes, of all outstanding share options, at 31 March 2024 was £nil
(2023: £nil).
In accordance with IFRS 2, the fair value of equity-settled share-based payments to employees is determined at the date of grant
and is expensed on a straight-line basis over the vesting period based on the Group’s estimate of shares that will eventually vest.
A charge of £0.9m was recognised in respect of share options in the year (2023: £1.2m) including £0.2m (2023: £0.3m) in respect
of the Directors’ share options. The highest paid Director’s share options accounted for £0.1m (2023: £0.2m) of the charge. The
Group uses a Black-Scholes pricing model to determine the annual charge for its share-based payments. The assumptions used
in this model for each share-based payment are as follows:
SAYE (12) | SAYE (13) | SAYE (14) | SAYE (15) | SAYE (16) | |
Date of grant | 13.12.19 | 23.12.20 | 20.12.21 | 12.01.23 | 22.12.23 |
Initial exercise price | 208p | 164p | 266p | 161p | 141p |
Number of shares granted initially | 306,649 | 692,908 | 173,385 | 735,679 | 780,078 |
Expected volatility | 31.0% | 42.2% | 44.5% | 45.5% | 41.0% |
Expected option life | 3 years | 3 years | 3 years | 3 years | 3 years |
Risk-free rate | 0.3% | 1.3% | 1.9% | 3.8% | 4.8% |
Expected dividend yield | 4.0% | 3.8% | 2.8% | 4.8% | 6.0% |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 207
FINANCIAL STATEMENTS
10. Share-based payments continued
APSP 2018 | APSP 2019 | APSP 2020 | APSP 2021 | APSP 2022 | APSP 2023 | |
Date of grant | 25.07.18 | 23.07.19 | 25.11.20 | 21.07.21 | 19.07.22 | 26.07.23 |
Initial exercise price | Nil | Nil | Nil | Nil | Nil | Nil |
Number of shares granted initially | 861,023 | 861,447 | 970,695 | 700,458 | 1,069,374 | 1,622,919 |
Expected volatility | 30.0% | 31.0% | 42.2% | 44.5% | 45.5% | 41.0% |
Expected option life | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years |
Risk-free rate | 0.9% | 0.9% | 1.3% | 1.9% | 3.8% | 4.8% |
Expected dividend yield | 4.1% | 4.0% | 3.8% | 2.8% | – | – |
DBP 2019 | DBP 2021 | DBP 2022 | DBP 2023 | |
Date of grant | 23.07.19 | 21.07.21 | 19.07.22 | 26.07.23 |
Initial exercise price | Nil | Nil | Nil | Nil |
Number of shares granted initially | 87,381 | 109,455 | 128,992 | 72,770 |
Expected volatility | 31.0% | 44.5% | 45.5% | 41.0% |
Expected option life | 3 years | 3 years | 3 years | 3 years |
Risk-free rate | 0.9% | 1.9% | 3.8% | 4.8% |
Expected dividend yield | 4.0% | 2.8% | – | – |
The share price at 31 March 2024 was 184.0p. The average price during the year was 169.9p. Expected volatility is the Company’s
three-year historical share price volatility.
| 2024 | 2023 | |
| £m | £m | |
At 1 April | 107.9 | 61.2 |
Additions | – | 47.7 |
Exchange differences | (0.6) | (1.0) |
At 31 March | 107.3 | 107.9 |
| 2024 | 2023 | |
| £m | £m | |
Croydex | 7.8 | 7.8 |
Abode | 0.8 | 0.8 |
Triton Showers | 19.1 | 19.1 |
Merlyn | 25.5 | 25.5 |
Grant Westfield | 47.7 | 47.7 |
Tile Africa | 2.3 | 2.6 |
House of Plumbing | 4.1 | 4.4 |
107.3 | 107.9 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024208
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
11. Goodwill continued
| Brands, | Product | ||||
| Customer | trade names | Development | certification | ||
| relationships | and patents | costs | costs | Tot a l | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
At 1 April 2022 | 38.7 | 10.1 | 0.6 | 0.2 | 49.6 |
Acquisitions | 32.5 | 3.0 | – | – | 35.5 |
Additions | – | – | 0.6 | 0.5 | 1.1 |
Disposals | – | – | (0.2) | – | (0.2) |
Exchange differences | (0.2) | – | – | – | (0.2) |
At 31 March 2023 | 71.0 | 13.1 | 1.0 | 0.7 | 85.8 |
Reclassified | – | – | 0.5 | – | 0.5 |
Additions | – | – | 0.5 | 0.7 | 1.2 |
Exchange differences | (0.2) | – | – | – | (0.2) |
At 31 March 2024 | 70.8 | 13.1 | 2.0 | 1.4 | 87.3 |
| Accumulated amortisation | |||||
At 1 April 2022 | 14.2 | 5.5 | 0.6 | 0.2 | 20.5 |
Charge for the year | 5.1 | 1.1 | 0.1 | – | 6.3 |
Disposals | – | – | (0.2) | – | (0.2) |
At 31 March 2023 | 19.3 | 6.6 | 0.5 | 0.2 | 26.6 |
Reclassified | – | – | 0.1 | – | 0.1 |
Charge for the year | 5.4 | 1.1 | 0.3 | – | 6.8 |
Exchange differences | (0.1) | – | – | – | (0.1) |
At 31 March 2024 | 24.6 | 7.7 | 0.9 | 0.2 | 33.4 |
Net book amount at 31 March 2023 | 51.7 | 6.5 | 0.5 | 0.5 | 59.2 |
Net book amount at 31 March 2024 | 46.2 | 5.4 | 1.1 | 1.2 | 53.9 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 209
FINANCIAL STATEMENTS
13. Property, plant and equipment
| Land and | Plant and | ||
| buildings | equipment | Tot a l | |
| £m | £m | £m | |
| Cost | |||
At 1 April 2022 | 34.0 | 102.9 | 136.9 |
Exchange differences | (1.1) | (3.9) | (5.0) |
Additions | 0.6 | 4.8 | 5.4 |
Acquisitions | – | 4.0 | 4.0 |
Disposals | (0.2) | (3.1) | (3.3) |
At 31 March 2023 | 33.3 | 104.7 | 138.0 |
Exchange differences | (0.7) | (2.4) | (3.1) |
Reclassified | – | (0.5) | (0.5) |
Additions | 0.5 | 5.7 | 6.2 |
Disposals | (0.3) | (6.9) | (7.2) |
At 31 March 2024 | 32.8 | 100.6 | 133.4 |
| Accumulated depreciation | |||
At 1 April 2022 | 21.6 | 86.3 | 107.9 |
Exchange differences | (0.4) | (2.9) | (3.3) |
Acquisitions | – | 2.9 | 2.9 |
Impairment | 2.1 | 2.0 | 4.1 |
Charge for the year | 0.6 | 4.3 | 4.9 |
Disposals | (0.2) | (3.1) | (3.3) |
At 31 March 2023 | 23.7 | 89.5 | 113.2 |
Exchange differences | (0.2) | (1.8) | (2.0) |
Reclassified | – | (0.1) | (0.1) |
Reversal of prior impairment | (4.0) | – | (4.0) |
Charge for the year | 0.5 | 3.5 | 4.0 |
Disposals | (0.3) | (5.5) | (5.8) |
At 31 March 2024 | 19.7 | 85.6 | 105.3 |
Net book amount at 31 March 2023 | 9.6 | 15.2 | 24.8 |
Net book amount at 31 March 2024 | 13.1 | 15.0 | 28.1 |
Plant and equipment include motor vehicles, computer equipment, and plant and machinery.
In line with guidance from the Financial Reporting Council, the Group reviews all cash-generating units to determine whether
any of the assets related to our operations are impaired. These reviews are performed by comparing the estimated future cash
flows generated by the divisions with the carrying value of the assets generating those cash flows. The future cash flows are
sensitised for items including reduced margins, increasing energy costs and working capital variances to illustrate a value in
use for the business. The discount rates used were in line with the UK pre-tax discount rates utilised in the goodwill impairment
assessments. As a result of these reviews and demand uncertainty, tangible and right of use assets within the Johnson Tiles UK
business were impaired in the prior year with a non-cash impairment charge of £5.0m recognised as an exceptional item in the
Income Statement. Impairment of property plant and equipment totalled £4.1m. In the current year, £4.0m of land and buildings
impairment was reversed following an independent valuation of the Johnson Tiles UK site. This amount has been included in
exceptional items in the Income Statement.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024210
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
| Land and | Plant and | ||
| buildings | equipment | Tot a l | |
| £m | £m | £m | |
| Cost | |||
At 1 April 2022 | 27.4 | 5.9 | 33.3 |
Exchange differences | (2.4) | (0.2) | (2.6) |
Acquisitions | 1.7 | 0.3 | 2.0 |
Additions | 1.3 | 1.8 | 3.1 |
Modifications | 2.2 | – | 2.2 |
Disposals | (0.2) | (0.3) | (0.5) |
At 31 March 2023 | 30.0 | 7.5 | 37.5 |
Exchange differences | (1.5) | (0.1) | (1.6) |
Additions | 2.0 | 1.9 | 3.9 |
Modifications | (0.3) | 0.1 | (0.2) |
Disposals | (1.2) | (1.8) | (3.0) |
At 31 March 2024 | 29.0 | 7.6 | 36.6 |
| Accumulated depreciation | |||
At 1 April 2022 | 9.6 | 3.8 | 13.4 |
Exchange differences | (1.0) | (0.1) | (1.1) |
Impairment | – | 0.9 | 0.9 |
Charge for the year | 3.7 | 0.9 | 4.6 |
Disposals | – | (0.3) | (0.3) |
At 31 March 2023 | 12.3 | 5.2 | 17.5 |
Exchange differences | (0.7) | (0.1) | (0.8) |
Charge for the year | 3.6 | 1.1 | 4.7 |
Disposals | (1.2) | (1.6) | (2.8) |
At 31 March 2024 | 14.0 | 4.6 | 18.6 |
Net book amount at 31 March 2023 | 17.7 | 2.3 | 20.0 |
Net book amount at 31 March 2024 | 15.0 | 3.0 | 18.0 |
| 2024 | 2023 | |
| £m | £m | |
Raw materials and consumables | 12.2 | 15.3 |
Work in progress | 1.2 | 1.2 |
Finished goods | 84.0 | 87.4 |
97.4 | 103.9 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 211
FINANCIAL STATEMENTS
| 2024 | 2023 | |
| £m | £m | |
Trade receivables | 69.3 | 80.2 |
Less: impairment loss allowance | (1.8) | (1.5) |
Trade receivables – net | 67.5 | 78.7 |
Other receivables | 1.7 | 1.3 |
Prepayments and accrued income | 3.4 | 3.3 |
72.6 | 83.3 |
| 2024 | 2023 | |
| £m | £m | |
Sterling | 59.3 | 66.4 |
South African Rand | 12.4 | 15.9 |
Euro | 0.9 | 1.0 |
72.6 | 83.3 |
| 0–1 month | 1–2 months | 2–3 months | >3 months | |||
| Not yet due | overdue | overdue | overdue | overdue | Total | |
| 31 March 2024 | £m | £m | £m | £m | £m | £m |
Expected credit loss rate | 0.2% | 1.5% | 9.1% | 14.3% | 35.0% | 2.6% |
Gross trade receivables | 56.9 | 6.6 | 1.1 | 0.7 | 4.0 | 69.3 |
Loss allowance | 0.1 | 0.1 | 0.1 | 0.1 | 1.4 | 1.8 |
| 0–1 month | 1–2 months | 2–3 months | >3 months | |||
| Not yet due | overdue | overdue | overdue | overdue | Total | |
| 31 March 2023 | £m | £m | £m | £m | £m | £m |
Expected credit loss rate | 0.1% | 0.1% | 6.7% | 14.3% | 28.2% | 1.9% |
Gross trade receivables | 64.2 | 9.9 | 1.5 | 0.7 | 3.9 | 80.2 |
Loss allowance | 0.1 | 0.1 | 0.1 | 0.1 | 1.1 | 1.5 |
| 2024 | 2023 | |
| £m | £m | |
At the beginning of the year | 1.5 | 1.2 |
Acquired | – | 0.2 |
Provision for receivables impairment | 0.7 | 0.3 |
Receivables written off during the year as uncollectable | (0.3) | (0.1) |
Exchange differences | (0.1) | (0.1) |
At the end of the year | 1.8 | 1.5 |
| 2024 | 2023 | |
| £m | £m | |
Cash at bank and in hand | 30.8 | 29.0 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024212
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
| 2024 | 2023 | |
| £m | £m | |
Trade payables | 45.4 | 50.8 |
Other tax and social security payables | 6.1 | 7.5 |
Other payables | 2.8 | 4.1 |
Accruals and deferred income | 34.8 | 36.8 |
89.1 | 99.2 |
19. Lease liabilities
| Land and | Plant and | ||
| buildings | equipment | Tot a l | |
| £m | £m | £m | |
At 1 April 2022 | 21.3 | 2.7 | 24.0 |
Exchange differences | (1.6) | (0.2) | (1.8) |
Acquired | 1.7 | 0.3 | 2.0 |
Additions | 1.3 | 1.8 | 3.1 |
Modifications | 2.2 | – | 2.2 |
Disposals | (0.2) | – | (0.2) |
Interest charge | 1.7 | 0.1 | 1.8 |
Gross lease payments | (4.9) | (1.5) | (6.4) |
At 1 April 2023 | 21.5 | 3.2 | 24.7 |
Exchange differences | (1.1) | (0.1) | (1.2) |
Additions | 2.0 | 1.9 | 3.9 |
Modifications | (0.3) | 0.1 | (0.2) |
Disposals | – | (0.1) | (0.1) |
Interest charge | 1.4 | 0.2 | 1.6 |
Gross lease payments | (4.9) | (1.6) | (6.5) |
At 31 March 2024 | 18.6 | 3.6 | 22.2 |
Lease liabilities are split into £6.3m (2023: £6.1m) payable in less than one year and £15.9m (2023: £18.6m) payable after one year.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 213
FINANCIAL STATEMENTS
| 2024 | 2023 | |
| £m | £m | |
| Non-current | ||
| Bank borrowings (unsecured): | ||
– bank loans | 69.0 | 80.0 |
– less: costs of raising finance | (0.9) | (1.1) |
Total borrowings | 68.1 | 78.9 |
| 2024 | 2023 | |
| £m | £m | |
Not later than one year | – | – |
| After more than one year: | ||
– between one and two years | – | – |
– between two and five years | 69.0 | 80.0 |
– costs of raising finance | (0.9) | (1.1) |
Total borrowings | 68.1 | 78.9 |
| 2024 | 2023 | |
| % | % | |
Bank loans | 7.1 | 6.1 |
| 2024 | 2023 | |
| £m | £m | |
Cash and cash equivalents | 30.8 | 29.0 |
Total borrowings | (68.1) | (78.9) |
(37.3) | (49.9) |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024214
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
20. Financial liabilities – borrowings continued
| 2024 | 2023 | |
| £m | £m | |
Sterling | (52.3) | (71.0) |
Euro | 0.3 | 0.4 |
US Dollar | 0.1 | 0.5 |
South African Rand | 13.4 | 18.6 |
Chinese Renminbi | 1.2 | 1.6 |
(37.3) | (49.9) |
21. Financial instruments
During the year, the Group held financial instruments relating to the risks of the Group’s operations.
| Average rate vs £ | ||
2024 | 2023 | |
South African Rand | 23.60 | 20.40 |
Euro | 1.16 | 1.16 |
US Dollar | 1.26 | 1.21 |
| Closing rate vs £ | ||
2024 | 2023 | |
South African Rand | 23.92 | 21.94 |
Euro | 1.17 | 1.14 |
US Dollar | 1.26 | 1.24 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 215
FINANCIAL STATEMENTS
21. Financial instruments continued
Financial instruments
The Group’s financial instruments comprise borrowings, cash, trade receivables and payables, deferred contingent consideration
and forward exchange contracts. Based on the hierarchy defined in IFRS 13, deferred contingent consideration is classified
as a level 3 instrument. An assessment as to the extent to which the deferred contingent consideration will be payable was
undertaken at the year end, and the expected cash payment has been discounted and recognised in non-current liabilities.
The remainder of the Group’s financial instruments are classified as level 2 instruments. Consequently, fair value measurements
are derived from inputs other than quoted prices included within level 1 that are observable for the assets or liabilities, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Financial liabilities
The table below analyses the value of the Group’s financial liabilities into relevant maturity groupings based on the remaining
period at the Balance Sheet date to the contractual maturity date.
| Later than | Later than | ||||
| one year but | two years but | ||||
| Not later than | not later than | not later than | Later than | ||
| one year | two years | five years | five years | Total | |
| £m | £m | £m | £m | £m | |
| Borrowings | 4.9 | 4.9 | 87.3 | – | 97.1 |
Lease liabilities 2 | 6.1 | 5.3 | 9.0 | 10.9 | 31.3 |
Trade and other payables | 99.2 | – | 10.0 | – | 109.2 |
At 31 March 2023 | 110.2 | 10.2 | 106.3 | 10.9 | 237.6 |
| Borrowings | 4.9 | 4.9 | 76.9 | – | 86.7 |
Lease liabilities 2 | 6.3 | 5.7 | 10.8 | 4.6 | 27.4 |
| Trade and other payables | 89.1 | 4.7 | – | 0.2 | 94.0 |
At 31 March 2024 | 100.3 | 15.3 | 87.7 | 4.8 | 208.1 |
1
1
3
1
Borrowings are undiscounted and include interest costs calculated using the applicable interest rate at year end.
2
Lease liabilities are on an undiscounted basis.
3
Trade and other payables due later than one years but not later than two years relate to deferred contingent consideration and deferred remuneration in relation to the acquisition
of Grant Westfield and are on an undiscounted basis.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024216
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
21. Financial instruments continued
| Change in fair | |||
| Carrying | Notional | value taken to | |
| amount | amount | hedge reserve | |
| £m | £m | £m | |
| As at 31 March 2023 | |||
Liabilities | (2.0) | 64.4 | (3.6) |
| As at 31 March 2024: | |||
Liabilities | (0.6) | 49.2 | 1.4 |
| Hedging | |
| reserve | |
| £m | |
| Fair value | |
At 1 April 2023 | (1.4) |
Effective portion of changes in fair value | 1.4 |
Amount transferred to inventories | – |
Tax effect | (0.4) |
At 31 March 2024 | (0.4) |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 217
FINANCIAL STATEMENTS
| Retirement | |||||
| Accelerated tax | benefit | ||||
| depreciation | obligations | Intangibles | Other | Tot a l | |
| £m | £m | £m | £m | £m | |
At 1 April 2022 | (0.1) | (4.9) | (6.4) | 2.0 | (9.4) |
Acquisitions | (0.2) | – | (8.9) | – | (9.1) |
(Charged)/credited to the Consolidated Income Statement | (0.1) | (0.7) | 1.2 | 0.4 | 0.8 |
Charged to other comprehensive income | – | 1.9 | – | 0.8 | 2.7 |
Exchange differences | – | – | – | – | – |
At 31 March 2023 | (0.4) | (3.7) | (14.1) | 3.2 | (15.0) |
Credited/(charged) to the Consolidated Income Statement | 0.3 | – | 1.5 | 0.5 | 2.3 |
Charged to other comprehensive income | – | (0.4) | – | (0.4) | (0.8) |
Exchange differences | – | – | – | 0.1 | 0.1 |
At 31 March 2024 | (0.1) | (4.1) | (12.6) | 3.4 | (13.4) |
| Disclosed on the consolidated balance sheet as: | |||||
Deferred tax assets | (1.0) | – | – | 1.7 | 0.7 |
Deferred tax liabilities | 0.9 | (4.1) | (12.6) | 1.7 | (14.1) |
| 2024 | 2023 | |
| £m | £m | |
| Deferred tax assets: | ||
– to be recovered after more than 12 months | 5.3 | 3.0 |
– to be recovered within 12 months | 0.2 | 0.2 |
5.5 | 3.2 | |
| Deferred tax liabilities: | ||
– to be charged after more than 12 months | (17.7) | (17.1) |
– to be charged within 12 months | (1.2) | (1.1) |
(18.9) | (18.2) | |
Deferred tax liabilities (net) | (13.4) | (15.0) |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024218
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
| Warranty | Restructuring | ||
| provision | provision | Tot a l | |
| £m | £m | £m | |
At 1 April 2022 | 0.9 | 0.7 | 1.6 |
Charged to the Income Statement | – | 4.5 | 4.5 |
Utilisation | – | (0.4) | (0.4) |
At 31 March 2023 | 0.9 | 4.8 | 5.7 |
Charged to the Income Statement | 0.1 | 1.9 | 2.0 |
Utilisation | – | (6.0) | (6.0) |
At 31 March 2024 | 1.0 | 0.7 | 1.7 |
24. Retirement benefit obligations
(a) Pension costs
2024 | 2023 | |
Employee members | 2% | 2% |
Deferred members | 28% | 24% |
Pensioner members | 70% | 74% |
Total | 100% | 100% |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 219
FINANCIAL STATEMENTS
24. Retirement benefit obligations continued
(b) IAS 19R ‘Employee benefits’
Norcros Security Plan
The valuation used for IAS 19R disclosures has been based on the most recent actuarial valuation at 31 March 2021 and updated
by Isio, a firm of qualified actuaries, to take account of the requirements of IAS 19R in order to assess the liabilities of the scheme
at 31 March 2024. Scheme assets are stated at their market value at 31 March 2024.
(I) THE PRINCIPAL ASSUMPTIONS USED TO CALCULATE THE SCHEME LIABILITIES OF THE NORCROS SECURITY
PLAN UNDER IAS 19R ARE:
| 2024 | 2023 | |
| Projected | Projected | |
| unit | unit | |
Discount rate | 4.85% | 4.90% |
Inflation rate (RPI) | 3.30% | 3.25% |
Inflation rate (CPI) | 2.65% | 2.55% |
Increases to pensions in payment (other than pre-1988 GMP liabilities) | 3.00% | 2.90% |
Salary increases | 2.90% | 2.80% |
The mortality assumptions are based on standard mortality tables, which allow for future mortality improvements and are
summarised below:
2024 | 2023 | |
| Life expectancy at age 65: | ||
Current pensioners – males | 19.4 | 19.8 |
Current pensioners – females | 22.0 | 22.3 |
Future pensioners – males (currently aged 45) | 20.3 | 20.7 |
Future pensioners – females (currently aged 45) | 23.1 | 23.5 |
Members are assumed to take a 25% (2023: 25%) cash commutation sum on retirement.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024220
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
24. Retirement benefit obligations continued
(II) THE AMOUNTS RECOGNISED IN THE INCOME STATEMENT ARE AS FOLLOWS:
| 2024 | 2023 | |
| £m | £m | |
| Included in operating profit: | ||
IAS 19R pension administration expenses | 1.3 | 1.6 |
IAS 19R finance income | (0.8) | (0.6) |
Total cost recognised in the Income Statement | 0.5 | 1.0 |
(III) THE AMOUNTS RECOGNISED IN THE BALANCE SHEET ARE DETERMINED AS FOLLOWS:
| Value at | Value at | |
| 31 March | 31 March | |
| 2024 | 2023 | |
| £m | £m | |
Equities | 31.4 | 67.1 |
Bonds | 66.3 | 70.2 |
High yield | 58.3 | 58.7 |
Liability-driven investments | 119.9 | 98.7 |
Cash and gilts | 15.6 | 5.2 |
Total fair value of scheme assets | 291.5 | 299.9 |
Present value of scheme liabilities | (275.0) | (285.0) |
Pension asset | 16.5 | 14.9 |
The fair value of the scheme assets analysed by asset category and subdivided between those assets that have a quoted market
price in an active market and those that do not (such as investment funds) are as follows:
Value at 31 March 2024 | Value at 31 March 2023 | |||||
| Quoted | Unquoted | Total | Quoted | Unquoted | Tot a l | |
| £m | £m | £m | £m | £m | £m | |
Equities | – | 31.4 | 31.4 | – | 67.1 | 67.1 |
Bonds | – | 66.3 | 66.3 | – | 70.2 | 70.2 |
High yield | – | 58.3 | 58.3 | – | 58.7 | 58.7 |
Liability-driven investments | – | 119.9 | 119.9 | – | 98.7 | 98.7 |
Cash and gilts | 15.6 | – | 15.6 | 5.2 | – | 5.2 |
Total fair value of scheme assets | 15.6 | 275.9 | 291.5 | 5.2 | 294.7 | 299.9 |
The majority of the Plan’s assets are invested in pooled investment vehicles, where the fair value has been determined by the
individual fund managers by applying fair value principles to the underlying investments.
(IV) THE MOVEMENT IN THE SCHEME SURPLUS IN THE YEAR IS AS FOLLOWS:
| 2024 | 2023 | |
| £m | £m | |
Asset at the beginning of the year | 14.9 | 19.6 |
Employer contributions – deficit recovery | 4.0 | 3.8 |
IAS 19R pension administration expenses | (1.3) | (1.6) |
IAS 19R finance income | 0.8 | 0.6 |
Actuarial losses | (1.9) | (7.5) |
Asset at the end of the year | 16.5 | 14.9 |
(V) THE RECONCILIATION OF SCHEME ASSETS IS AS FOLLOWS:
| 2024 | 2023 | |
| £m | £m | |
Opening fair value of scheme assets | 299.9 | 387.9 |
Employer contributions – deficit recovery | 4.0 | 3.8 |
Interest income | 14.2 | 10.4 |
Benefits paid | (24.3) | (22.0) |
Actuarial losses on scheme assets | (1.0) | (78.6) |
IAS 19R pension administration expenses | (1.3) | (1.6) |
Closing fair value of scheme assets | 291.5 | 299.9 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 221
FINANCIAL STATEMENTS
24. Retirement benefit obligations continued
| 2024 | 2023 | |
| £m | £m | |
Opening scheme liabilities | (285.0) | (368.3) |
Interest cost | (13.4) | (9.8) |
Actuarial gains arising from changes in financial assumptions | 7.1 | 82.5 |
Actuarial losses arising from changes in demographic assumptions | (3.1) | – |
Actuarial losses arising from experience adjustment | (4.9) | (11.4) |
Benefits paid | 24.3 | 22.0 |
Closing fair value of scheme liabilities | (275.0) | (285.0) |
| 2024 | 2023 | |
| £m | £m | |
Actuarial losses | (1.9) | (7.5) |
Deferred tax | 0.5 | 1.9 |
(1.4) | (5.6) |
| Impact on scheme obligations | ||
| 2024 | 2023 | |
| Assumption | £m | £m |
Discount rate – 0.1% decrease | 2.6 | 2.6 |
Inflation rate (RPI and CPI) 1 – 0.1% increase | 1.4 | 1.5 |
Increase in life expectancy by one year | 11.9 | 11.2 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024222
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
| 2024 | 2023 | |
| £m | £m | |
| Issued and fully paid | ||
2024: 89,596,593 (2023: 89,274,204) ordinary shares of 10p each | 8.9 | 8.9 |
| 2024 | 2023 | |
| £m | £m | |
Deferred contingent consideration | 3.0 | 5.1 |
Deferred remuneration | 1.4 | 0.8 |
Other non-current liabilities | 0.2 | 0.3 |
4.6 | 6.2 |
| 2024 | 2023 | |
| £m | £m | |
Profit before taxation | 32.6 | 21.7 |
| Adjustments for: | ||
– IAS 19R administrative expenses included in the Income Statement | 1.3 | 1.6 |
– acquisition related costs included in the Income Statement | 4.3 | 8.4 |
– exceptional items included in the Income Statement | (2.3) | 9.8 |
– finance costs included in the Income Statement | 8.1 | 6.4 |
– IAS 19R finance credit included in the Income Statement | (0.8) | (0.6) |
– cash flows from exceptional items and acquisition related costs | (3.4) | (3.3) |
– depreciation of property, plant and equipment | 4.0 | 4.9 |
– underlying amortisation | 0.3 | 0.1 |
– depreciation of right of use asset | 4.7 | 4.6 |
– pension fund deficit recovery contributions | (4.0) | (3.8) |
– IFRS 2 charges | 0.9 | 1.2 |
Operating cash flows before movement in working capital | 45.7 | 51.0 |
| Changes in working capital: | ||
– decrease/(increase) in inventories | 2.9 | (3.0) |
– decrease/(increase) in trade and other receivables | 9.3 | (3.1) |
– decrease in trade and other payables | (8.9) | (7.2) |
Cash generated from operations | 49.0 | 37.7 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 223
FINANCIAL STATEMENTS
27. Consolidated Cash Flow Statement continued
| Underlying | ||||||
| Current | Non-current | net cash/ | Lease | |||
| Cash | borrowings | borrowings | (debt) | liabilities | Net debt | |
| £m | £m | £m | £m | £m | £m | |
At 1 April 2022 | 27.4 | – | (18.8) | 8.6 | (24.0) | (15.4) |
Cash flow | 4.5 | – | (60.0) | (55.5) | 6.4 | (49.1) |
Non-cash finance costs | – | – | (0.1) | (0.1) | (1.8) | (1.9) |
Other non-cash movements | – | – | – | – | (7.2) | (7.2) |
Exchange movement | (2.9) | – | – | (2.9) | 1.9 | (1.0) |
At 31 March 2023 | 29.0 | – | (78.9) | (49.9) | (24.7) | (74.6) |
Cash flow | 3.3 | – | 11.0 | 14.3 | 6.5 | 20.8 |
Non-cash finance costs | – | – | (0.2) | (0.2) | (1.6) | (1.8) |
Other non-cash movements | – | – | – | – | (3.6) | (3.6) |
Exchange movement | (1.5) | – | – | (1.5) | 1.2 | (0.3) |
At 31 March 2024 | 30.8 | – | (68.1) | (37.3) | (22.2) | (59.5) |
28. Dividends
A final dividend in respect of the year ended 31 March 2023 of £6.1m (6.8 p per 10p ordinary share) was paid on 26 July 2023,
and an interim dividend of £3.0 m (3.4 p per 10p ordinary share) was paid on 16 January 2024. A final dividend in respect of the
year ended 31 March 2024 of £6.1m (6.8 p per 10p ordinary share) is to be proposed at the Annual General Meeting on 24 July
2024. These financial statements do not reflect this dividend.
| 2024 | 2023 | |
| £m | £m | |
Contracts placed for future capital expenditure not provided in the financial statements | 0.6 | 0.5 |
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024224
FINANCIAL STATEMENTS
NOTES TO THE GROUP ACCOUNTS CONTINUED
Year ended 31 March 2024
31. Events after the reporting period
On 25 April 2024, the Group announced that, following a strategic review, it had entered into an agreement to sell the trade and
assets of the Johnson Tiles UK division to Johnson Tiles Limited, a new company incorporated and run by the former divisional
management team.
Consideration for the sale was £1m, with a further modest earn out dependent on the future equity value of the business, with
both payable in April 2028.
The sale was completed on 19 May 2024 after the conclusion of the customary employee consultation period.
Given the proximity of the sale to the balance sheet date, the Group have not fully assessed tangible fixed asset and working
capital values transferred, but estimate the loss on disposal, to be accounted for in the year to 31 March 2025, to be approximately
£20m, plus associated professional fees of less than £1m.
The Johnson Tiles land and buildings were not transferred as part of the sale and following an independent valuation, an
impairment reversal of £4m has been recognised in the financial statements for the year to 31 March 2024. The group has also
entered into an agreement to lease the site to Johnson Tiles Limited on an arm’s length basis.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 225
FINANCIAL STATEMENTS
Notes
2024
£m
2023
£m
Non-current assets
Investments 3 177.3 177.3
Other receivables 4 0.9 27.1
Deferred tax assets 5 1.1 0.9
179.3 205.3
Current liabilities
Trade and other payables 6 (1.3) (1.6)
Net current liabilities (1.3) (1.6)
Total assets less current liabilities 178.0 203.7
Non-current liabilities
Financial liabilities – borrowings 7 (68.1) (78.9)
Net assets 109.9 124.8
Financed by:
Share capital 8 8.9 8.9
Share premium account 47.6 47.6
Treasury reserve 0.2 (0.1)
Retained earnings before loss for the financial year 59.0 73.1
Loss for the financial year (5.8) (4.7)
Total shareholders’ funds 109.9 124.8
The financial statements of Norcros plc, registered number 3691883, on pages 226 to 233 were authorised for issue on 12 June
2024 and signed on behalf of the Board by:
THOMAS WILLCOCKS JAMES EYRE
Chief Executive Officer Chief Financial Officer
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024226
FINANCIAL STATEMENTS
PARENT COMPANY BALANCE SHEET
At 31 March 2024
Ordinary
share
capital
£m
Share
premium
£m
Treasury
reserve
£m
Retained
earnings
£m
Tot a l
equity
£m
At 1 April 2022 8.1 30.3 (0.1) 81.1 119.4
Comprehensive expense:
Loss for the year – – – (4.7) (4.7)
Total comprehensive expense for the year – – – (4.7) (4.7)
Transactions with owners:
Shares issued 0.8 17.3 – – 18.1
Dividends paid – – – (9.2) (9.2)
Equity-settled share options – – – – –
Value of employee services – – – 1.2 1.2
At 31 March 2023 8.9 47.6 (0.1) 68.4 124.8
Comprehensive expense:
Loss for the year – – – (5.8) (5.8)
Total comprehensive expense for the year – – – (5.8) (5.8)
Transactions with owners:
Purchase of treasury shares – – (0.8) – (0.8)
Dividends paid – – – (9.1) (9.1)
Settlement of share option schemes – – 1.1 (1.2) (0.1)
Value of employee services – – – 0.9 0.9
At 31 March 2024 8.9 47.6 0.2 53.2 109.9
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 227
FINANCIAL STATEMENTS
PARENT COMPANY STATEMENT OF
CHANGES IN EQUITY
Year ended 31 March 2024
1. Statement of accounting policies
General information
Norcros plc (the Company) is the ultimate holding company of the Norcros Group, a market-leading designer and supplier of
high-quality bathroom and kitchen products in the UK, Europe and South African markets.
The Company is incorporated in the UK as a public company limited by shares and registered in England and Wales. The shares
of the Company are listed on the London Stock Exchange market of listed securities. The address of its registered office is
Ladyfield House, Station Road, Wilmslow SK9 1BU, UK.
Accounting reference date
UK company law permits a company to draw up financial statements to a date seven days either side of its accounting reference
date. For operational reasons, the Company has in the current financial year adopted an accounting period of 52 weeks and, as
a result of this, the exact year-end date was 31 March 2024. All references to the financial year, therefore, relate to the 52 weeks
commencing on 3 April 2023. In the previous year, the accounting period was 52 weeks, beginning on 4 April 2022 and ending
on 2 April 2023.
Basis of preparation
Norcros plc is a qualifying entity able to apply FRS 101 ‘Reduced disclosure framework’. The separate financial statements of the
Company have been prepared in accordance with FRS 101, on the going concern basis and under the historical cost convention
modified for fair values, and in accordance with the Companies Act 2006 and with applicable accounting standards.
These financial statements and accompanying notes have been prepared in accordance with the reduced disclosure framework
for all periods presented. A separate profit and loss account dealing with the results of the Company has not been presented as
permitted by Section 408(3) of the Companies Act 2006.
The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements, in
accordance with FRS 101:
• the following paragraphs of IAS 1 ‘Presentation of financial statements’:
– 10(d) (statement of cash flows);
– 16 (statement of compliance with all IFRS);
– 111 (cash flow statement information); and
– 134–136 (capital management disclosures);
• IFRS 7 ‘Financial instruments: disclosures’;
• IAS 7 ‘Statement of cash flows’;
• IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ – impact of future accounting standards;
• IAS 24 (paragraph 17) ‘Related party disclosures’ – key management compensation; and
• IAS 24 ‘Related party disclosures’ – the requirement to disclose related party transactions between two or more members of
a group.
As the Group financial statements include the equivalent disclosures, the Company has taken the exemptions available under
FRS 101 in respect of the following disclosures:
• IFRS 2 ‘Share-based payments’, in respect of Group equity-settled share-based payments; and
• certain disclosures required by IFRS 13 ‘Fair value measurement’, and disclosures required by IFRS 7 ‘Financial instruments:
disclosures’.
Critical estimates and judgements
The Directors believe that there are no critical accounting estimates or judgements relating to these financial statements.
A summary of the more important accounting policies, which have been applied consistently, is set out opposite.
Investments in subsidiaries
Investments held as fixed assets are stated at cost, less any provision for impairment. The Directors believe the carrying value
of investments is supported by their underlying assets and cash flow projections derived from detailed budgets and forecasts.
Dividends received from investments are recognised on receipt of the dividend.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024228
FINANCIAL STATEMENTS
NOTES TO THE PARENT COMPANY ACCOUNTS
Year ended 31 March 2024
1. Statement of accounting policies continued
Foreign currency transactions
Monetary assets and liabilities expressed in foreign currencies are translated into Sterling at rates applicable at the year end.
Exchange gains and losses are dealt with in arriving at operating profit.
Taxation
Deferred taxation has been recognised as a liability or asset if transactions have occurred at the Balance Sheet date that give
rise to an obligation to pay more taxation in the future or a right to pay less taxation in the future. An asset is recognised only
when the transfer of economic benefits is more likely than not to occur.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in the period in which
the dividends are approved by the Company’s shareholders or when paid if earlier.
Financial assets and liabilities
Borrowings – the Company measures all borrowings initially at fair value. This is taken to be the fair value of the consideration
received. Transaction costs (any such costs that are incremental and directly attributable to the issue of the financial instrument)
are included in the calculation of the effective interest rate and are, in effect, amortised through the Income Statement over the
duration of the borrowing.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability
for at least 12 months after the Balance Sheet date.
Share-based payments
The Company operates a number of equity-settled, share-based compensation plans. The fair value of the employee services
received in exchange for the grant of options is recognised as an expense. The total amount to be expensed over the vesting
period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting
conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest.
At each Balance Sheet date, the Company revises its estimates of the number of options that are expected to vest. It recognises
the impact of the revision to original estimates, if any, in the Income Statement, with a corresponding adjustment to equity.
2. Other information
Auditor’s remuneration of £3,000 (2023: £3,000) and staff costs relating to two employees (2023: two) are borne by one of the
Company’s subsidiaries, without recharge.
Further information about the Directors’ remuneration can be found in the Annual Report on Remuneration on pages
150 to 170.
3. Investments
Shares in
subsidiaries
£m
At 1 April 2023 and 31 March 2024 177.3
Details of the subsidiaries owned by the Company, held both directly and indirectly, are shown in note 12.
4. Other receivables
2024
£m
2023
£m
Amounts owed by Group undertakings 0.9 27.1
Amounts owed by Group undertakings are owed entirely by Norcros Group (Holdings) Limited. The year on year movement
in this receivable is driven by periodic repayments from Norcros Group (Holdings) Limited and a £15.0m dividend declared
by Norcros Group (Holdings) Limited in the year. This dividend was settled in specie by the transfer to Norcros plc of an
intercompany debtor owed by Norcros Estates Limited. This intercompany debtor has been fully provided for in the Norcros plc
entity financial statements.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 229
FINANCIAL STATEMENTS
5. Deferred tax assets
Deferred tax is calculated in full on temporary differences under the liability method. The movement on the deferred tax account
is as shown below:
2024
£m
2023
£m
Deferred tax asset 1.1 0.9
The analysis of the deferred tax asset is as follows:
2024
£m
2023
£m
Other timing differences 1.1 0.9
2024
£m
2023
£m
To be recovered after more than 12 months – –
To be recovered within 12 months 1.1 0.9
1.1 0.9
The full potential asset for deferred tax is as follows:
2024
£m
2023
£m
Other timing differences 1.1 0.9
Tax losses 4.5 4.5
5.6 5.4
No deferred tax has been recognised in the financial statements in respect of the tax losses as the Company does not believe
that utilisation of these losses is probable on the basis that entity level profits are unlikely to arise.
6. Trade and other payables
2024
£m
2023
£m
Accruals 1.3 1.6
7. Financial liabilities – borrowings
2024
£m
2023
£m
Bank loans 69.0 80.0
Costs of raising finance (0.9) (1.1)
68.1 78.9
Repayable after more than one year:
– between one and two years – –
– between two and five years 69.0 80.0
– costs of raising finance (0.9) (1.1)
68.1 78.9
The amount of committed banking facility remains at £130m (plus a £70m uncommitted accordion). The Group exercised the
second of its two one-year extension options in the year, extending the maturity date to October 2027.
The Group has been in compliance with all banking covenants during the year.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024230
FINANCIAL STATEMENTS
NOTES TO THE PARENT COMPANY ACCOUNTS
CONTINUED
Year ended 31 March 2024
8. Called-up share capital
2024
£m
2023
£m
Issued and fully paid
2024: 89,596,593 (2023: 89,274,204) ordinary shares of 10p each 8.9 8.9
In the year, 322,389 of 10p ordinary shares were issued in order to satisfy vesting of options under the Company’s SAYE schemes.
At 31 March 2024, 297,563 shares were held by the Employee Benefit Trust (2023: 103,716). In the prior year, the opening share
capital was 81,052,426 10p ordinary shares. 8,088,700 10p ordinary shares were then issued as an equity placing ahead of the
Grant Westfield acquisition and 133,078 of 10p ordinary shares were also issued in order to satisfy vesting of options under the
Company’s SAYE schemes.
9. Dividends
A final dividend in respect of the year ended 31 March 2023 of £6.1m (6.8p per 10p ordinary share) was paid on 26 July 2023,
and an interim dividend of £3.0m (3.4p per 10p ordinary share) was paid on 16 January 2024. A final dividend in respect of the
year ended 31 March 2024 of £6.1m (6.8p per 10p ordinary share) is to be proposed at the Annual General Meeting on 24 July
2024. These financial statements do not reflect this dividend.
10. Related party transactions
The Company considers its two employees to be its key management personnel. Compensation for these employees, who have
the sole responsibility for planning, directing and controlling the Company, are set out in the Remuneration Report on pages 150
to 170. Employee remuneration is settled on behalf of the entity by Norcros Group (Holdings) Limited.
11. Contingent liabilities
The Company is party to an omnibus set-off agreement between Lloyds Bank plc and the Group’s UK subsidiaries.
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 231
FINANCIAL STATEMENTS
12. Subsidiaries
The subsidiaries included in the financial statements are disclosed below. All companies are 100% owned by the Group.
Held directly by Norcros plc
Company
Country of
incorporation
or registration Registered address
Norcros Group (Holdings) Limited England Ladyfield House, Station Road, Wilmslow SK9 1BU, UK
Held indirectly by Norcros plc
Company
Country of
incorporation
or registration Registered address
Abode Home Products Ltd England Ladyfield House, Station Road, Wilmslow SK9 1BU, UK
Bathshoponline Ltd England As above
Carlton Holdings Ltd England As above
Crittall Construction Ltd England As above
Croydex Group Ltd England As above
Croydex Ltd England As above
Eurobath International Ltd England As above
H & R Johnson (Overseas) Ltd England As above
H & R Johnson Tiles Ltd England As above
Lincolnshire Properties (Norfolk Street) Ltd England As above
Merlyn Industries UK Ltd England As above
Metlex Industries Ltd England As above
Norcros (Trustees) Ltd England As above
Norcros Adhesives Ltd England As above
Norcros Developments Ltd England As above
Norcros Estates Ltd England As above
Norcros Group Trusteeships Ltd England As above
Norcros Industry (International) Ltd England As above
Norcros Securities Ltd England As above
Norcros Services Ltd England As above
Plumbex UK Ltd England As above
Samuel Booth and Company Ltd England As above
Stonechester (Stoke) Ltd England As above
Taps Direct Ltd England As above
Triton Industry Ltd England As above
Triton plc England As above
UBM Pension Trust Ltd England As above
Vado UK Ltd England As above
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024232
FINANCIAL STATEMENTS
NOTES TO THE PARENT COMPANY ACCOUNTS
CONTINUED
Year ended 31 March 2024
Company
Country of
incorporation
or registration Registered address
Granfit Holdings Ltd Scotland Westfield Avenue, Edinburgh EH11 2QH, Scotland
Grant Westfield Ltd Scotland As above
Ocean Interiors GMBH Germany Vogt 21, 52072 Aachen, Germany
Ocean Interiors BV Netherlands WTC Heerlen Aachen, Vogt 21, 6422 RK Heerlen, Netherlands
Cronors Insurance Ltd Guernsey Dorey Court, Admiral Park, St. Peter Port GY1 2HT, Guernsey
Merlyn Industries Ltd Ireland Merlyn House, Purcellsinch Industrial Estate, Dublin Road, Kilkenny, Ireland
Christa 271 (Pty) Ltd Namibia 3rd Floor, 344 Independence Avenue, Windhoek, Namibia
Tile Africa Windhoek Property (Pty) Ltd Namibia 15 van Zyl Street, Suiderhof, Windhoek, Namibia
Ceracon (Pty) Ltd South Africa 4 Porcelain Road, Olifantsfontein 1665, South Africa
General Adhesives (Pty) Ltd South Africa As above
Johnson Tiles Pty Ltd South Africa As above
Lesatsi Trading (Pty) Ltd South Africa As above
Norcros SA (Pty) Ltd South Africa As above
RAP Plumbing Supplies (Pty) Ltd South Africa As above
TAL (Pty) Ltd South Africa As above
Talcor Properties (Pty) Ltd South Africa As above
Tile Adhesives (Pty) Ltd South Africa As above
Tile Africa Group (Pty) Ltd South Africa As above
Triton SA (Pty) Ltd South Africa As above
Norcros Middle East Building
Materials Trading LLC
UAE Warehouse No. 5, St. No. 4, Umm Ramool, Marrakesh Road,
P.O. Box 393937, Dubai, UAE
12. Subsidiaries continued
Held indirectly by Norcros plc continued
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024 233
FINANCIAL STATEMENTS
NORCROS PLC ANNUAL REPORT AND ACCOUNTS 2024234
The production of this report supports the work of the
Woodland Trust, the UK’s leading woodland conservation
charity. Each tree planted will grow into a vital carbon stor
e,
helping to reduce environmental impact as well as cr
eating
natural havens for wildlife and people.
NORCROS PLC
Ladyfield House
Station Road
Wilmslow
Cheshire SK9 1BU
www.norcros.com
NORCROS PLC ANNUAL REPORT & ACCOUNTS 2024