Insider Media Limited

Shower and tile maker Norcros, which owns Birmingham-based Triton and Stoke-on-Trent's Johnson Tiles, has secured a £51m revolving credit facility.

The Cheshire-headquartered company obtained the finance with a syndicate of three banks.

The syndicate comprises longstanding lenders Lloyds and Barclays along with Handelsbanken, a new lender to the company. The facility will run to October 2015.

Norcros said the package provides it with increased flexibility and a lower cost of borrowing that reflects the strong financial position of the group. It added that the annualised reduction in bank interest as a result of the new terms is expected to be £500,000.

However, an exceptional non-cash interest charge in the region of £1.2m will be recognised in the results for the half year arising from the write off of unamortised fees relating to the previous refinancing. Fees of approximately £800,000 have also been incurred in securing the new facility.

Norcros revealed its new banking facilities in a trading update to the Stock Exchange. The company said trading in the six months to 2 October has been in line with expectations, with revenues expected to be £102.3m, up from £93.7m on a like-for-like basis last year.

Group trading profit for the period is expected to be about £6.2m, the same figure achieved last year. Net debt before prepaid finance costs will be about £19m, up from £13m in 2010.

Norcros said its Triton shower brand has performed "resiliently" and continued to gain market share in a "difficult market". New operational initiatives have hit profits in its South African business, but the group hopes they will result in improved performance in the future.

In a statement the company said: "Against a backdrop of difficult markets in both UK and South Africa, the group's performance has remained resilient. The new banking facility provides the group with a conservative level of headroom and increased flexibility to manage the continued development of the business through the next four years.

"The board believes Norcros should continue to make good progress provided conditions in the group's key markets do not deteriorate from current levels."