Earnings in a lather at McBride
SHAMPOO-to-washing powder maker McBride today revealed a sharp fall in profit but added that a growing trend towards own label goods is increasing its market share in Europe.
The group, which last September axed around 100 of its 700-strong workforce at sites in Middleton and Warrington, said that rising raw materials costs continued to present challenges.
It added that these cost pressures were offset by securing selling price increases and cost cuts, although the results do reflect the time lag between raw material prices rising and McBride securing customer price increases.
In the six months to December 31, pre-tax profit fell 55% to £5m, while revenue was up 14% to £392.2m.
McBride said the current squeeze on consumer spending is leading consumers to switch to private label goods to secure best value. Overall, in Western Europe, private label sales in household products grew by between 4% and 5% over the last twelve months.
Chief executive Miles Roberts said: “These results are in line with our expectations and have been achieved in a very difficult environment. We experienced revenue growth in our three largest markets; France, UK and Italy, where private label continues to increase share.
“The divisional restructuring programmes and ongoing improvements in our cost base helped offset the continued increases in our raw material costs. Operating cash flows also grew, reflecting our continuous focus on cash and working capital management.”
He added that trading since the end of December has been good and its strategy remains underpinned by the consumer trend towards private label and the group’s continuing focus on driving cost efficiencies.
