Cleaning, hygiene and personal care products manufacturer McBride said on Wednesday that adjusted operating profit and adjusted profit before tax for the year ended 30 June were expected to be in line with current market expectations.
The London-listed firm said it was still experiencing uneven levels of demand, as the impact of Covid-19 lockdowns on consumer behaviour had seen a continuation of weaker laundry volumes and stronger demand for cleaners and dishwasher products in the second half, although demand for cleaners and dishwasher tablets softened in the final quarter.
It said those weaker run rates, combined with short-term consumer stockpiling in the comparative period in the early stage of lockdown in 2020, had resulted in lower second half revenues, and full-year revenues at constant currency being 4.0% lower than the prior year.
On a divisional basis, powders was “significantly” impacted with sales declining 16%, reflecting the effect of low laundry volumes both to consumer and professional markets, with sales in the other divisions declining by much smaller amounts.
“The raw material environment remains challenging, both in terms of supply availability and exceptional price increases,” McBride’s board said in a statement.
“The group continues to discuss margin recovery actions with our customers, mostly across liquids categories.
“Our approach has been to apply an immediate variable pricing surcharge to sales contracts, based upon certain key commodity prices, with discussions and finalisation ongoing at this time.”
Net debt, including IFRS 16 adjustments, closed the year at around £119m widening from £101.5m a year earlier, but in line with the company’s internal expectations.
As it highlighted in its interim report, McBride said the increase in net debt included a £15m impact from a return to more regular levels of working capital, following the “exceptionally low” inventory levels at 30 June 2020 following destocking as a result of Covid-19.
Debt cover on an accounting basis was expected to be about 2.6x, and thus under the firm’s new capital allocation policy announced on 23 February, the board said it did not expect to propose a final dividend for the 2021 financial year.
“Banking covenants on debt cover are expected to be approximately 1.4x, well within our covenant limit of 3.0x,” the directors added.
“The group continues to have material headroom against its revolving credit facility of €175m.”
McBride said it would announce its preliminary results for the year ended 30 June on 7 September.
At 0824 BST, shares in McBride were down 3.42% at 85.96p.
