Private-label specialist McBride (MCB) has reported an increase in first-half profit as the benefits of its plan to restructure the UK business start to trickle through. Despite stubbornly weak end-markets, adjusted operating profit at constant exchange rates rose 45 per cent to £12.5m.
The group's efforts to streamline its UK operation included cutting staff and manufacturing costs and reformulating products to make them cheaper to produce. The falling oil price provided a nice tailwind, and the household-goods maker also benefited from a lower depreciation charge and lighter administrative overheads. Having saved £1.5m in the period under review, the restructuring programme is on track to take £12m of annual costs out of the business by June 2016.
On the trading front, strong growth in Germany was offset by weaker performances in Italy and Spain and subdued volumes in the UK and France. Two-thirds of the business reports in euros, so the single currency's depreciation against sterling was a real headache: group sales would have been flat without the weaker euro. Encouragingly, however, UK sales only fell 4 per cent to £128m - a big improvement on the 12 per cent decline reported last year.
Analysts at Panmure Gordon expect pre-tax profit of £20.6m for the full year, giving EPS of 8p - up from £14.8m and 5p.
| MCBRIDE (MCB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 92p | MARKET VALUE: | £168m | |
| TOUCH: | 90-92p | 12-MONTH HIGH: | 108p | LOW: 74p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 36p* | NET CASH: | 131% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)** |
|---|---|---|---|---|
| 2013 | 380 | 3.7 | 1.6 | 1.7 |
| 2014 | 365 | 7.3 | 2.8 | 1.7 |
| % change | -4 | +97 | +75 | - |
**Dividend payment made by way of issued 'B' shares. Entitlement to B shares: 24 Apr. Redemption of B shares: 29 May *Includes intangible assets of £25.7m, or 14p a share | ||||
