City round up: McBride bouncing back from torrid year; AO upgrades; Kape board says no

Cleaning products group McBride is trading profitably on a month by month basis, and has cut losses before tax to £7.9 million (2021: £16.9m loss), a decrease in losses of £9.0 million.

The Manchester-based manufacturer and supplier said delivery of a recovery plan faced huge challenges, and losses have been cut largely due to price increases of £97.1 million.

However, the company claims “momentum is good and our road to recovery is well underway”, with the group returning consistently to positive monthly adjusted EBITDA from May 2022 and positive monthly adjusted operating profit from November 2022.

In September 2022 McBride, which makes private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets, reported losses and outlined changed financing arrangements, in particular a €175m revolving credit facility.

Chris Smith, chief executive officer, said energy and employment costs were being offset by 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.”

In other news AO World has upgraded its profit forecast to a range of £37.5m to £45m for the full year, an increase to the previous guidance that we gave in January 2023. AO expects to publish a full year post close trading statement on 14 April 2023.

The board of Kape Technologies have rejected an offer from its largest shareholder to take the business private. “The independent directors believe that the offer materially undervalues Kape and its future prospects.”