LONDON, UK / ACCESSWIRE / August 31, 2017 / Norcros (LSE:NXR) has continued to deliver against our expectations and AGM comments reinforce expectations of progress. The strategy of building a larger complementary business portfolio has been executed well to date and the company retains the financial flexibility to continue this process. Such activity may provide a catalyst for a re-rating but there is already scope for this to happen in our view.
Norcros's share price has largely traded within the 150-180p range over the last 18 months or so. It is currently 11% below the level at the end of 2016 and has underperformed the FTSE All Share Index by almost 30% as a result. Our estimates have remained robust throughout and, consequently, the company's current year P/E and EV/EBITDA (adjusted for pensions cash) have compressed to 6.6x and 4.0x, respectively. Business prospects are somewhat better than the rating suggests in our view and a prospective 4.4% dividend yield enhances total return potential.
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