Manchester-based cleaning products firm McBride plc said on Tuesday its revenue fell 3.4% to £682.3 million and adjusted profit before tax fell 17.8% to £19.9 million for the year ended June 30, 2021, amid supply chain shortages and “exceptionally fast escalation in input costs.”
The company is one of Europe’s largest makers of retailer own brand household goods.
“The severe challenges seen across industries with supply chain shortages have heavily impacted McBride,” said the Manchester company.
“We have experienced an exceptionally fast escalation in input costs since early spring.
“The size of cost increases in materials including plastics, cardboard and surfactants is unprecedented and is coupled with challenges with freight availability and costs adding further inflationary pressures.
“Compared to one year ago, cardboard is priced more than 50% higher, Ethylene is 50% up impacting on plastics and surfactants and certain solvents over 300% higher.
“On average, the group is predicted to see the peak of these raw materials in the autumn this year with the most impacted division, Liquids, seeing raw materials nearly 20% higher than one year ago.
“The whole industry is affected, whether branded or private label and the size of the increases has warranted urgent pricing conversations with retailers alongside many branders publically warning of price rises for their products.
“At the end of the financial year, these input cost rises have ultimately sealed the fate of two sizeable German competitors who have filed for insolvency.”
McBride CEO Chris Smith said: “This year has been one of two halves, with a strong first half followed by a more difficult second.
“In our recent trading update we highlighted the supply side cost inflation being felt due to rapidly increasing raw material costs and freight capacity.
“The £10m of savings expected in the current financial year leave us well placed to meet these challenges and our efforts to recoup input cost rises from customers continue.
“Our balance sheet remains robust and we expect current market conditions to create opportunities for selected in-fill acquisitions at attractive valuations.
“We continue to anticipate a weak first half year, especially when compared to our strong first half last year, with profits therefore heavily weighted to the second half of the year.”