Shares of Manchester-based household products firm McBride plc fell about 8% on Thursday after it said it expects to make a bigger loss than anticipated for the six months ended December 31, 2021, amid “rapidly rising” costs, “shortage of haulage capacity” and ongoing supply chain problems.
McBride is one of Europe’s largest makers of retailer own brand household goods.
McBride said it has £80 million in available cash at hand and is currently in “supportive and constructive discussions” with its bankers regarding its December covenants.
The firm said in a trading update: “In line with much of the rest of the world, in the period since 19 October 2021, when the group made its last trading update, raw material and packaging costs have continued to experience very significant inflationary pressures with availability continuing to impact our supply chain efficiency.
“In addition, the shortage of haulage capacity and even higher fuel costs has not abated and have continued to substantially inflate distribution costs.
“McBride has been actively engaged with all its customers to secure substantial price increases to mitigate the impact of these exceptional cost rises affecting the whole industry.
“Our early increases in late summer have now been outpaced by further rises in input costs and hence further pricing action has been underway more recently.
“It is pleasing to see the support of most customers to these price increase requests with the effect of these further increases starting to benefit December trading and delivering more fully from January onwards.
“The group now expects to report an adjusted loss before interest, tax and amortisation (EBITA) of between £14m and £17m for the six months ended 31 December 2021.
“The increase in this loss compared to our previous update in October is a consequence of the ongoing rapidly rising input costs and the timing of pricing agreements.
“At this stage, our wide range of outcomes is a result of pricing delays with a small number of customers and the resultant implications, which could impact short term volumes.
“McBride continues to enjoy a strong liquidity position with c.£80 million in available cash at hand, and we are currently in supportive and constructive discussions with our bankers regarding our December covenants.”