McBride plc (“McBride”, the “Company” or the “Group”)
Results in-line with previously revised expectations
Compass strategy remains on-track
£10m of cost saving expected in the current financial year
7 September 2021
McBride, the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning/hygiene markets, announces its unaudited preliminary results for the year ended 30 June 2021.
Headlines
Strategy and management
· Programme Compass divisional reorganisation complete; new organisation in place from 1 January 2021, with benefits already seen
· Divisional structure supported by a leaner Group structure
· Refreshed executive team including permanent Group CFO and Divisional Managing Directors
Business
· Full year revenues at constant currency down 4% following a 'year of two halves': H1 growth of 1.7% was followed by H2 decline of 9.5%
· Covid-19 continues to impact demand, cleaners volumes normalised in H2, laundry volumes still light compared to historic levels
· Exceptional input cost inflation impacted Q4, driven by Covid-19 shocks to supply chain and rapid and exceptional inflation of key feedstocks
· Cost savings on track, £10m expected in current financial year
· Good progress being made towards achieving our 2025 product sustainability targets and defining our wider environmental, social and governance approach
· Strong closing balance sheet, with a sustainability linked revolving credit facility agreed for 5+1 years
Financial
· Group revenues of £682.3m (2020: £706.2m), 3.4% lower (4.0% at constant currency)
· Adjusted operating profit(2) of £24.1m (2020: £28.3m)
· Operating profit from continuing operations of £15.5m (2020: £15.4m)
· Adjusted profit before tax of £19.9m (2020: £24.2m), 17.8% lower
· Profit before tax from continuing operations of £11.3m (2020: £11.2m)
· Adjusted Group Effective Tax rate (6)% (2020: 28%); tax credit due to significant deferred tax asset recognition and provision release following closure of a tax audit
· Adjusted diluted EPS(3) from continuing operations 23.2% higher at 11.7p (2020: 9.5p)
· Diluted EPS from continuing operations 7.8p (2020: 3.7p)
· Share buy-back: 8.6 million shares purchased and cancelled at total cost of £6.8m
· Dividend policy reviewed as part of Group strategy reset; no final dividend proposed (2020: nil)
· Net debt(4) at £118.4m (30 June 2020: £101.5m)
· Net debt/adjusted EBITDA(6) 2.6x accounting basis (30 June 2020: 2.1x); 1.5x banking covenant basis (30 June 2020: 1.4x)
Chris Smith, Chief Executive Officer, commented:
“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.”