McBride plc (“McBride”, the “Company” or the “Group”)
Good momentum delivering business performance improvement, with
expectations for full year on track
28 February 2023
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 interim results for the six months ended 31 December 2022.
Business headlines
· Business and revenue momentum in line with growth ambition:
· private label volume growth of 2.6% in first half, gaining market share
· cost conscious consumers supporting near-term growth
· sustained pricing growth delivered
· new products launched supporting product sustainability objectives
· good pipeline of business wins
· improved service levels
· Financial performance recovery:
· trading results close to break-even with recovery to positive EBITA in final two months
· strong margin recovery from pricing and product engineering
· first half revenues up £102.9m, higher by 30.3% at constant currency(1), mostly from price rises
· ‘Programme Compass’ £20m annualised savings on track
· Strategy and organisation development underpinning recovery:
· divisional focus delivering step-up in customer experience and growth ambitions
· Compass structure maturing and progressing well
· Transformation team appointed, change programme design concluding
· carbon reduction target setting expected in 2023
Financial headlines
· Group revenues up 31.8%
· EBITA improvement with adjusted operating losses(2) reduced to £1.3m from £14.8m loss in H1 FY22
· Net debt(2) steady at £169.4m (30 June 2022: £164.4m)
· Liquidity(2) comfortable at £58.9m (30 June 2022: £70.6m)
| Halfyear to | Halfyear to | Constant | ||
| 31 Dec | 31 Dec | Reported | currency | |
| £m unless otherwise stated | 2022 | 2021 | change | change (1) |
| Total operations | ||||
| Group revenue | 426.3 | 323.4 | 31.8% | 30.3% |
| Adjusted operating loss (2) | (1.3) | (14.8) | 13.5 | 13.5 |
| Operating loss | (2.6) | (14.7) | 12.1 | |
| Adjusted loss before taxation(2) | (7.9) | (16.9) | 9.0 | 9.0 |
| Loss before taxation | (20.0) | (16.8) | (3.2) | |
| Adjusted diluted loss per share (3) | (4.2)p | (8.1)p | 3.9p | |
| Diluted loss per share | (9.7)p | (8.0)p | (1.7)p | |
| Net debt (2,4) | 169.4 | 164.4 | 5.0 | |
| Adjusted return on capital employed (2) | (5.5)% | (4.6)% | (0.9) ppt |
1 Comparatives translated at six months to 31 December 2022 exchange rates.
2 Refer to note 16 for definition.
3 See note 6.
4 Net debt comparative is at 30 June 2022; all other comparatives refer to the six months ended 31 December 2021.
Outlook
The early part of the second half year has continued the momentum seen in the first half and our current expectations are for a stronger operating margin performance and hence a return to adjusted operating profit in the second half of the year. This is driven by the impact of the margin management actions implemented and in progress, steadying cost inflation and a favourable retail environment for private label products. Our full-year expectations remain on track.
Medium term, the Group will continue its strategic plans to grow shareholder value through its focus on delivering growth and cost efficiency benefits. Our growth ambitions are making good progress with new wins launching through 2023 and further innovative, consumer-insight led and new, eco-friendly product opportunities in the pipeline. The Transformation programme is being launched at present, targeting £50 million of benefits over five years.
Whilst positive about the outlook, we also remain vigilant as to the potential impacts of the ongoing and significant macroeconomic uncertainty, particularly around energy costs, high general inflation levels and the knock-on impacts of any escalation of the Ukraine conflict.
Chris Smith, Chief Executive Officer, commented:
“The first half year required continued high levels of attention to margin recovery in light of ongoing inflationary pressures. Whilst there are some early signs of stabilisation in certain input costs, many raw material costs remain historically high. Energy and employment costs continue to apply further inflationary pressure, and accordingly, we continue to action mitigations including price increases, product engineering and cost control.
It is pleasing to have returned to positive adjusted operating profit in the last two months of the period, with momentum improving into the second half as a result of higher volumes from new business wins, better customer service levels and pricing actions fully annualising. All of this is supported by consumer behaviour creating a more favourable environment for private label products.
The transformation agenda, signposted as part of Compass, gathers pace with the appointment of the Chief Transformation Officer, dedicated to the key change and improvement initiatives over the coming years.
The Group’s core activities remain strong and the dedication of the entire McBride team to resolve the challenges confronting us is a strong demonstration of our values and the commitment to return the Group to sustainable levels of profitability.”
| McBride plc | |
| Chris Smith, Chief Executive Officer | 0161 203 7401 |
| Mark Strickland, Chief Financial Officer | 0161 203 7401 |
| FTI Consulting LLP | 020 3727 1017 |
| Ed Bridges, Nick Hasell |
The results presentation will be available on the McBride plc investor relations website from 1.00pm today.