Listed aerosol manufacturer prepares for full year profit losses as it continues to cut costs

McBride, the manufacturer of personal care, skincare and toiletry products for retailers which plans to close its Hull factory later this year with the loss of around 117 jobs and sold its Bradford site last year to reduce costs, has this morning confirmed it will see revenues drop between 10%-15% for its full annual year.

Reporting on the six month period to December 31 2018, the group said it completed the sale of its loss-making European Personal Care (PC) Liquids business in November – which had a manufacturing site in Bradford – during the period. In the previous year, McBride disposed of its skincare business in the Czech Republic.

The company, which also has several sites in the North West, warned that its full year expectations were to see profits drop by 10%-15% because of cost pressures and that it continued it “factory and overhead efficiency projects.” However, during the six month period, revenues for the group rose to £369m from £334m during the same period in the previous year. Pre-tax profits remained steady at £13m.

In the period to disposal, the European PC Liquids business generated revenues of £21.9m (2017: £28.3m) and an adjusted trading loss of £300,000  (2017: £1.1m loss).

McBride also announced plans for the closure of our UK aerosols operations at Hull, which is expected to see around 117 jobs lost, with the absorption of some volumes into the French aerosols operation. The firm said: “This action will be completed during the second half year as expected.”

McBride said: “These actions have seen the Group exit from a major part of our PC activities in Europe such that, once completed, there will be a reduction in annual Group revenues of £85 million when compared to the year to June 2018. The remaining PCA activities, which comprises Aerosols and Asia (to be known now as AA )are expected to operate at a break-even level from the start of the next financial year in July 2019.”

Today’s results were published just a day after the firm issued a profit warning as it continues to see pressures on its cost base.

Rik De Vos, Chief Executive Officer, said: “We continue to expect the overall raw material pricing outlook to show improvements in the second half, but not to the extent anticipated in early January. In addition, distribution costs continue to rise beyond our previous estimates due to market rates and efficiency challenges driven by logistics capacity shortfalls and internal service gaps. Accordingly, although the Group continues to anticipate further good sales growth in the second half year, the Board now expects full year adjusted profits before tax to be approximately 10% to 15% lower than the prior financial year.

The Group made significant strategic progress in the period, delivering strong growth in revenues whilst completing the European PC Liquids sale and the integration of Danlind onto the McBride IT systems. In order to seek to mitigate the effect of rising costs, the business has been implementing price increases and continues with further supply chain efficiency measures and overhead rationalisation actions to counter continuing cost inflation.

Given McBride’s market leadership, sound financial position and continued growth prospects, the Group remains well placed in the current difficult trading environment to make further progress against its strategic ambitions.”

Click here to sign up to receive our new South West business news...
Close