McBride considers sale of £60m turnover aerosols business
McBride, the manufacturer of personal care, skincare and toiletry products for retailers, is considering the sale of its £60m turnover Aerosols business, having received third party expressions of interest.
The Aerosols business operates from manufacturing sites in the UK and France and supplies personal hygiene, aircare and homecare products.
The company, which recently separated its Personal Care and Aerosols businesses from the Household activities to improve value generation, said initial interest has been narrowed down but added there can be no certainty that any transaction will result.
Meanwhile, half year profits at the listed Middleton-based company, which also has manufacturing sites in Manchester, Barrow, Hull and Bradford, have surged again, although the impact of currency rates is taking the shine off an otherwise performance.
It increased pre-tax profits to £18.8m (20158: £13m) on a turnover of £360.6m for the half year to the end of December 2016.
Around 70% of McBride’s activities are in subsidiaries outside of the UK and on a constant currency basis, that 44.6% increase in profits drops to 15.3%.
The company’s performance continues to benefit from progress on cost saving initiatives, including the restructuring of its UK business, and a strategic purchasing initiative.
It said strong cash generation continues with underlying net cash inflow of £14.8m, resulting in an improved net debt cover ratio of 1.4x.
Rik De Vos, chief executive, said that in spite of the tough trading environment, the company’s financial results remain strong.
He added: “Our focus remains on preparing the company for growth by securing the future building blocks required, while protecting the quality of the bottom line.
“Uncertainty in both the size and timing of raw material inflation and changes to foreign exchange rates is to be expected in the second half of the year. We will work closely with customers to mitigate these but it is likely the second half will see some lag effect between higher input prices and margin recovery.
“While trading conditions in the second half are expected to remain challenging, we believe our ongoing margin and cost initiatives position us well to mitigate these effects. As such, the board’s full year expectations remain unchanged.”
The interim payment to shareholders will be 1.4p.