A whopping £34.5m of exceptional restructuring and impairment charges pushed McBride's (MCB) income statement into the red last year. Strip out those costs and pre-tax profit at the private label specialist would have totalled £14.8m - still 17 per cent below last year's figure.
The poor showing was mainly due to dire trading in the UK, although a planned reduction in contract manufacturing didn't help. UK sales fell 10 per cent to £259m, sending the adjusted operating profit down by nearly three-quarters to £4.2m. Chief executive Chris Bull said this reflected "prolonged branded promotional activity" among retailers, such as supermarkets, that are McBride's customers. To tackle the problem, the UK business is being subjected to a major overhaul, aimed at cutting the cost base and making it more competitive. Manufacturing is being upgraded, 400 jobs are being axed and unprofitable businesses scrapped.
By contrast, the rest of the business fared much better during the year. Revenues in western Europe rose 2 per cent to £419m, with profits up 38 per cent to £19.8m. That was driven by strong sales growth in Germany, where investments made three years ago are now bearing fruit.
Broker Investec Securities expects pre-tax profit of £20m for the current year, giving EPS of 7p - from £16m and 10p in 2013-14.
| MCBRIDE (MCB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 88p | MARKET VALUE: | £160m | |
| TOUCH: | 88-89p | 12-MONTH HIGH: | 121p | LOW: 84p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 37p* | NET DEBT: | 123% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 812 | 29.6 | 12.3 | 6.8 |
| 2011 | 812 | 7.1 | 2.9 | 6.8 |
| 2012 | 814 | 12.1 | 5.1 | 5 |
| 2013 | 761 | 9.0 | 3.0 | 5 |
| 2014 | 744 | -21.3 | -10.5 | 5 |
| % change | -2 | - | - | - |
Ex-div: 23 Oct Payment: 28 Nov *Includes intangible assets of £26.3m, or 14p a share | ||||
