Shares of Manchester-based household cleaning products firm McBride plc plunged 16% on Wednesday after it published a trading update warning that its full year profits are now expected to be approximately 15% lower than the previous year amid “sustained price escalation for many of our raw materials.”

The company is one of Europe’s largest makers of retailer own brand household goods.

“In our half year results on 23 February 2021, our outlook noted increasing input costs,” said McBride.

“During most of the first quarter of 2021 we have seen increases in line with our expectations.

“However, in recent weeks there has been further rapid, significant and sustained price escalation for many of our raw materials, particularly core chemicals and plastics.

“Our current view is that we will see further double-digit increases on average across these materials and packaging items by June 2021 – more than double the rates of increase expected in mid-March 2021.

“Additionally, we do not see these prices returning to more normalised levels in the near future.

“Whilst these increases are evident across a number of the divisions, it is most impactful in our Liquids division.

“Revenue volatility continues to be a challenge in most of our markets. Since our half year results, demand for auto-dishwash products has remained strong but volumes in household cleaners have been normalising from the peaks seen in 2020.

“Additionally, sales of laundry and personal care products have remained very subdued across the group’s main markets.

“With lockdowns lasting longer and still in place across many of our markets, we do not now expect certain category volumes to pick up in the balance of the financial year and therefore the Liquids and Aerosols businesses have reduced their demand outlook for the final quarter. 

“As a result, the group now expects second half constant currency revenues to be approximately 6% lower year on year.

“Consequently the final quarter of trading for the current financial year ending 30 June 2021 is expected to be significantly weaker than the first nine months of the financial year and our full year profits (measured by EBITA) are now expected to be approximately 15% lower than the previous year …”