McBride, a manufacturer of private-label cleaning products and owner of the Oven Pride brand, confirmed today that its full-year results will show a return to profitability after it saw soaring raw material costs ease and demand strengthen.
As with other manufacturers, the group has faced exceptional input cost inflation during the past two years, driven first by post Covid-19 supply chain disruptions and, more recently, the economic and inflationary impacts of the war in Ukraine.
In a brief full-year trading update covering the period to 30 June, McBride revealed that volumes were up 5.4% for the full year, following 12.7% growth in the fourth quarter. It stated that the improvement in demand for products had been driven by a combination of business wins and strong demand increases on existing contracts.
It noted that across most markets, there had been a shift to private-label as a result of consumers seeking to save money to mitigate the effects of inflation on their household budgets.
Revenues for the full year, reflecting both volume increases and pricing actions, will show growth of 28.4% on a constant currency basis.
Having reported operating losses since the first half of its 2021 fiscal year, McBride said today that as a result of the strong fourth-quarter trading performance, it now anticipates that adjusted operating profit will be materially ahead of current market expectations, which currently average £9.7m.
The company’s full-year results are due to be announced on 19 September.
Following the release of the trading statement, shares in the London-listed firm gained more than 20%, having already risen 26% this year.
Analysts Peel Hunt said in a note: “Helpful consumer conditions and strong operational execution have supported the top line and as cost inflation abates and self-help beds in, margins will continue to improve.”
NAM Implications:
- Growth of 28.4% illustrates well the rising profile of own-label resulting from Lockdown fallout.
- With more to come as the impact of high inflation continues to bite.
