20 February 2020 – trading update

The bathroom and kitchen products supplier has issued a trading update for the 10 month period to 2 February.  This has confirmed that the company has continued to gain market share despite the challenging trading conditions.  The UK business has performed well, seeing growth in revenues although the business in South Africa has not done as well – the company is therefore looking at ways to cut costs in that business.  Although coronavirus has not had any real impact so far, as the company had sufficient stock to satisfy company demand, the slower than anticipated return to full production at its Chinese based suppliers may cause issues in the important final two months of the group’s financial year.  These supply chain issues are likely to impact the beginning of next year as well.  Until there is clarity on the issue we reduce our recommendation to HOLD.