Private label specialist McBride (MCB), which makes products like laundry detergent for retailers, has had a tricky year. Intense branded promotional activity and a period of restructuring that saw it wind down its contract manufacturing business and exit certain uneconomic private label contracts took a bite out of sales and left adjusted operating profit down 19 per cent at £24m.
However, the private label business, which represents the bulk of earnings, returned to growth in the second half with revenue up 2 per cent, driven by a string of new product launches. Moreover, McBride's 'core and future growth' categories, which account for half of private label revenue and in which the company has been investing, grew sales by 3 per cent in the year.
The regional picture was varied. Sales in Western Europe and the UK declined 9 per cent and 7 per cent, respectively, while revenue in the rest of the world, which accounts for 9 per cent of total sales, grew 16 per cent to £65m and profits surged sixfold to £2m. In Germany, soon to become McBride's third largest market by country, revenue rose 42 per cent, and chief executive Chris Bull sees huge potential here given its sheer size.
Investec expects current year adjusted pre-tax profit of £25.3m and EPS of 10.4p, up from £19.1m and 7.8p in 2013.
| MCBRIDE (MCB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 131p | MARKET VALUE: | £239m | |
| TOUCH: | 130p-132p | 12-MONTH HIGH: | 146p | LOW: 99.5p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 58p* | NET DEBT: | 81% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 792 | 22.2 | 9.2 | 6.0 |
| 2010 | 812 | 29.6 | 12.3 | 6.8 |
| 2011 | 812 | 7.10 | 2.9 | 6.8 |
| 2012 | 814 | 12.1 | 5.1 | 5.0 |
| 2013 | 761 | 9.5 | 3.2 | 5.0 |
| % change | -7 | -21 | -37 | - |
Ex-div: 23 Oct Payment: 29 Nov *Includes intangible assets of £34.1m, or 19p a share | ||||
