Cleaning products group raises profit expectations on surge in demand

Manchester-based household cleaning products firm, McBride, told shareholders today it expects profits to be around 15% ahead of current market expectations, and net debt to be lower, in a trading update to the market.

The group said business levels remain strong following a surge in demand for its products following the coronavirus pandemic, although momentum has eased in recent weeks.

It said further to its update on March 25, demand levels in its household business have moderated from the surge seen in many markets as countries went into lockdown, but encouragingly remain above the run-rate levels seen before March.

These higher demand levels are evident in most of the group’s major markets and apply mostly to surface cleaning and dishwashing products, with more limited impact in laundry products.

It said its teams have worked well to address the early challenges of staff shortages, material availability and distribution blockages and all factories are currently operating at more normal activity levels.

As anticipated in the March update, McBride has seen lower input pricing in this period, although some of this benefit has been tempered by one-off COVID-19 related operating costs.

The group’s aerosols business is benefiting from sales of new hand sanitiser products and as a result will deliver a profit improvement in the final quarter, supported by investment in additional production capacity.

As a consequence, today’s statement said the board now expects full year adjusted profit before tax to be approximately 15% ahead of current market expectations, which were a pre-tax profit of £18.6m, and for net debt at June 30, 2020 to be lower than expectations.

The group will issue a year-end trading statement on July 14, and preliminary results are scheduled to be announced on September 8.