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Monday 21 October 2019

McBride shares slide on profit miss

The manufacturing firm has offloaded part of its personal care business to pay down debt.

The manufacturing firm has plans to close a UK site (PA)
The manufacturing firm has plans to close a UK site (PA)

By Helen Cahill, Press Association City Reporter

Shares in manufacturing firm McBride have fallen after the company warned that profits will not meet market expectations.

Sales were weaker than expected in May and June, which McBride said would leave profits “marginally below” analysts’ expectations for the full year.

McBride’s shares were down 6.21%, or 8.2p, to 123.8p in morning trading.

In the second half of the financial year, sales of household goods rose 3.8% on a like-for-like basis. Total revenues for the period were up 15.8% year on year.

McBride’s input costs have remained stable since January, but the manufacturer’s operating costs were pushed up because it increased sales volumes in the final quarter of the financial year.

The higher costs were mainly associated with running McBride’s warehouse operations, and its distribution network.

The group has been restructuring its personal care and aerosols (PCA) business, having announced plans to close its UK aerosols operation in Hull.

McBride has completed a consultation with staff, and will shut the site in spring next year.

The company said this arm of the business will make a greater-than-expected loss as a result, but that it will break even again in July 2019.

Separately, McBride is selling its European personal care liquids business for £12.5 million to personal care rival Royal Sanders.

The business comprises manufacturing sites in Bradford and Belgium, and supplies personal hygiene, haircare and oral care products.

The proceeds of the deal, which is due to complete before the end of the year, will be used to pay down McBride’s debt.

McBride chief executive Rik De Vos said: “The agreement to sell our European personal care liquids activities follows a comprehensive review of the business and marks the final element in the transformation plan for our European PCA activities.

“The transaction enables the business to be developed as part of a dedicated personal care manufacturer of greater scale and positions McBride’s European operations as a focused household business with a clear strategy to deliver sustainable profitable growth.”

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