In a recent and commendable recognition of corporate commitment to sustainable practices, Triton, a subsidiary of Norcros Plc (LON:NXR), has been awarded the prestigious King’s Award for Enterprise. This award underscores Triton’s relentless focus on sustainable development, which has also played a crucial role in its market success, particularly in the UK electric shower market where it holds a significant 54% share.
Triton’s innovative approach is further illustrated by is its ENVi shower system, a standout product that was named the Housebuilder Product Award Winner in 2024. The ENVi system revolutionises household water and energy management by enabling users to monitor and limit their consumption through advanced digital controls, leading to considerable savings on utility bills. This technology aligns seamlessly with the growing consumer demand for eco-friendly and economical home solutions. Since its acquisition by Norcros in 1987, Triton has actively reshaped its business ethos towards enhancing its environmental and social impacts. A pivotal moment came in 2019 when Triton reset its company values to increase its sustainability focus, setting ambitious targets like achieving net zero by 2035.
Financially, Norcros shows robust health, backed by consistent performance and strategic market manoeuvres such as the acquisitions and disposals of various business units, which have further solidified its market position. Despite a challenging economic environment, Norcros has maintained an underlying return on capital employed (ROCE) ahead of its targets, and its dividend yield is well-covered by free cash flow. Looking ahead, the company anticipates continuous growth in revenue and operating margins, positioning it well for future valuation adjustments.
Tom Fraine, Research Analyst at Shore Capital said, “In our view, the current equity rating (6.4x FY24F PER; 4.4x EV/EBITDA) fails to recognise Norcros’s strong operating performance over recent years. The company has consistently delivered an underlying ROCE ahead of its previously announced 15% target (now 20% to be delivered in the medium-term). We anticipate that Norcros’s 5.3% dividend yield should be close to three times covered by free cash flow. We believe the delivery of the new medium-term organic growth (2-3% ahead of the market), operating margin (15%) and cash conversion (>90%) targets could comfortably justify a PER multiple in the teens.”
The integration of sustainable practices into its business model not only contributes to Triton’s corporate responsibility but also enhances its competitiveness in the global market. This is increasingly relevant as consumers and investors alike are directing their loyalties and capital towards companies that prioritise environmental sustainability.
Triton’s recognition with the King’s Award for Enterprise is not just a testament to its sustainable development initiatives but also highlights a strategic business model that leverages environmental responsibility for competitive advantage. This approach has not only yielded accolades but is also likely to drive future growth, profitability, and shareholder value in an increasingly eco-conscious market.
Norcros plc (LON:NXR) design, manufacture, and distribute a range of bathroom and kitchen products, mainly in the United Kingdom and South Africa.
