Last checked at 19 Aug 2021 07:00
19 August 2021
McBride plc
Financial Year 2022 trading update
McBride plc (the "Group"), the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets, today provides a trading update for the current financial year ending 30 June 2022.
On 14 July 2021, as a result of both the uncertainty surrounding the volatile input cost environment and the success and timing of pricing actions, the Board indicated that, at that time, it would not be offering guidance on the outlook for financial year 2022.
Although only 7 weeks into the new financial year, the previously highlighted raw material environment remains extremely challenging both in terms of exceptional price increases and supply availability. More recently, and in line with the general trading environment experienced by others, the Group has also started to experience distribution challenges, particularly in the UK and Germany as a result of the shortage of Heavy Goods Vehicle (HGV) drivers which has impacted upon both transport availability and cost.
Also as previously indicated, the Group continues to discuss margin recovery actions with its customers, mostly across liquids categories. McBride's approach has been to seek a variable pricing surcharge to sales contracts, based upon certain key commodity prices.
The Board's view on input costs for the new financial year remains in line with prior estimates. In terms of customer pricing, although discussions have resulted in agreement for price increases, the effective start dates for price increases are later than targeted.
The first half of FY22 is now expected to see EBITA at approximately break-even, with profits therefore heavily weighted towards the second half of the year, with the business exiting the year with run-rate profit levels in line with the average of the last few years.
As a consequence, the Board expects adjusted profit before tax for financial year 2022 to be 55% - 65% lower than current market consensus (*) for full year 2021, and for net debt at 30 June 2022 to be 5%-10% higher than full year 2021 consensus (*).
The short-term challenges facing the business have no effect on the ongoing execution of the Group's Compass strategy as outlined at its capital markets day in February 2021, nor its mid-term ambitions.
The Group continues to operate within its banking covenants and the Group's liquidity and cash flow remain robust.
A further update will be provided at the Group's preliminary results presentation for the year ended 30 June 2021 on 7 September 2021.
* Current market expectations for full year 2021 refer to a group compiled consensus for FY21 of an adjusted PBT of £19.7m, and a Net debt including IFRS 16 of £121.5m
For further information, please contact:
McBride plc
Chris Smith, Chief Executive Officer 0161 203 7570
Mark Strickland, Chief Finance Officer 0161 203 7570
FTI Consulting 020 3727 1017
Ed Bridges, Nick Hasell
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016.