The Investment Column: Shake-up costs hurt Norcros

Michael Doherty, chairman of Norcros, has lived a charmed life. Arriving in 1988, the year after the mini-conglomerate escaped a pounds 570m bid from Williams, Mr Doherty's brief was to give some direction to a group which had lost its way after a bout of over-expansion had left it bloated and directionless. But despite almost continuous restructuring in the intervening period, the shares have tumbled from over 400p to just 85p, up 1p yesterday.

After eight years in the job, Mr Doherty is relinquishing his executive duties, although he will remain chairman. The executive reins are being handed on to Joe Matthews, head of the group's ceramics division, to reflect the new focus on that business. Two new directors are also being appointed from within Norcros to replace recent departures, including Nicholas Kelsall, who moves up from his position as finance director of the H&R Johnson Tiles business to take on the same role at group level.

This less than full-blooded reshuffle at the top was accompanied by news that the slow unwinding of Norcros is becoming increasingly painful. The group revealed that it will be forced to take a pounds 5.3m charge in its results to March to cover restructuring in parts of its print and packaging division, along with the costs of moving the head office closer to its new core, the ceramics operation and Triton showers.

The charge is bad news for hard-pressed shareholders who were told last June that they could expect to receive some direct value from the sale or demerger of the division. The restructuring has been made necessary by a disappointing performance in print and packaging last year, particularly the Autotype and Norprint offshoots. Estimates for the division's worth, which varied from pounds 100m-pounds 150m last year, are coming back to nearer the bottom end of the range. It is not at all clear whether a Norcros pared back to tiles and showers, both of which are operating in highly competitive markets, would attract a bid. But, standing at around their break-up value, the shares are probably still worth holding, with the chance of a special dividend payout once the print and packaging sales are completed.