Cleaning products manufacturer sees surge in demand from customers

Household cleaning products firm McBride has seen a huge increase in demand for its products.

The company, which has its headquarters in Manchester, says it is struggling to cope with demand due to labour shortages and distribution issues.

McBride manufacture and supply white label products for the domestic household and professional cleaning and hygiene markets.

Since early March, the group has seen order levels across most regions increase for a range of products such as bleach, anti-bacterial and disinfecting sprays and certain dish and laundry cleaning products.

It is not clear to what extent the increase is due to additional end-user consumption or short-term consumer stockpiling.

The firm’s factories have remained open and are operating at varying levels of production.

The company’s ability to operate at full production is being affected by attendance, certain material supplies and, increasingly, distribution challenges for both inbound and outbound materials.

At this time excess demand levels are being met for the most part from a combination of inventory and choices of production priorities.

The firm said: “As Europe progressively ‘locks down’ we may see further restrictions on our ability to operate factories to match demand levels.

“We are working on output optimisation through measures such as recruitment of additional labour, customer prioritisation, range simplification and haulage optionality.

“Revenue improvements in the short term are likely to be tempered by reduced factory efficiencies, although we expect to see some benefit from lower raw material input costs in the fourth quarter, dependent on activity levels and product mix.

“We are actively limiting discretionary spend, postponing or cancelling capital projects and closely monitoring working capital levels.

“At this time we are unable to offer any update on guidance for the current financial year.

“Our amazing teams are working tirelessly to ensure we satisfy demand levels and we are grateful for the flexibility our customers and suppliers are affording at this time. We remain determined to provide our customers and consumers with quality products to deliver hygienic home and work environments.”

McBride has €60m of committed headroom under its RCF arrangements, with its debt/Ebitda ratio at 2.1x at 31 December 2019 compared to a limit of 3.0x.

As part of its management of cash resources, the group is cancelling the interim payment to shareholders of 0.8p per ordinary share, announced in the recent interim results.