McBride shares fall amid inflation, supply chain woes

Shares of Manchester-based household products firm McBride fell as much as 10% after it published a trading update for the six months ended December 31, 2023, warning that “energy, employment and financing costs continue to apply inflationary pressures.”

The firm also warned tha it “continues to manage significant supply chain volatility.”

McBride is one of Europe’s largest manufacturers and suppliers of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets.

The group expects to report first half adjusted operating profit slightly ahead of our expectations,” said McBride.

Group revenue was 9.9% higher than the prior year on a constant currency basis, benefitting from both volume growth and the impact of pricing actions in the last financial year to recover input cost inflation.

“Overall volumes in the period were 6.4% higher, driven by continuing momentum in private label (private label volumes grew by 10.1%) as consumers continue to mitigate cost of living pressures.

While input costs have generally stabilised, energy, employment and financing costs continue to apply inflationary pressures.

“Additionally, the group continues to manage significant supply chain volatility.

The group’s focus on reducing debt and maintaining tight control of costs resulted in net debt closing the period at £145.7m (30 June 2023: £166.5m), with liquidity at £85.0m (30 June 2023: £59.3m), comfortably above the minimum requirement per the banking covenant.

“The group continues to anticipate that net debt / adjusted EBITDA will be close to 2x by 30 June 2024.

The group’s half-year results will be announced on 27 February 2024.”