UPDATE 1-Norcros posts FY pretax loss; says bank covenants reset

* Sees tough trading conditions to continue in current year

* Says revised bank covenants give more flexibility

* Shares up 10 pct

July 31 (Reuters) - British shower and tile maker Norcros Plc (NXR.L), which swung to a full-year pretax loss, said on Friday its bank covenants had been reset at levels that would provide adequate headroom and flexibility, sending its shares up 10 percent.

Norcros, which reduced its net debt by 0.7 million pounds to 45.8 million pounds, said banks had revised the terms of its 80 million pounds facility and rescheduled it to October 2012.

"Having renegotiated the Group banking facilities on viable, albeit more expensive, terms we can now focus on a longer term recovery strategy for the business," Chairman John Brown said in a statement.

Norcros, which has faced extremely challenging trading conditions, posted a pretax loss of 4.8 million pounds, compared with a profit of 9.9 million pounds, a year ago.

Revenue fell 8.1 percent to 154.2 million pounds. Pretax profit before exceptional items fell to 2.9 million pounds from 13 million pounds.

The company, which paid a final dividend of 2.66 pence last year, scrapped its final dividend for this year and said it expected conditions to continue to be tough in the current year.

Norcros, however, said it was well positioned in the UK shower, UK tile and South African tile markets, the medium-term growth prospects for which remained attractive.

The company's shares were up 10.34 percent to 8 pence at 0810 GMT on the London Stock Exchange. (Reporting by Ramkumar in Bangalore; Editing by Ratul Ray Chaudhuri)