McBride plc’s (LON:MCB) terrible run in 2019 continued on Thursday, as the cleaning products maker sounded the earnings alarm for the third time in the past six months.
Shares in the £125mln company, which makes ‘own-brand’ air fresheners and bleaches for retailers, plunged 9% to 68.3p in morning trading on Thursday.
READ: McBride plunges as boss steps down after latest profit warnings
The stock has now halved in value since the beginning of 2019, not helped by a string of profit warnings and the impending departure of its chief executive.
McBride said trading in the second half of its financial year, which ended on 30 June, had been “marginally weaker than expected”, with sales in the UK and France particularly poor.
Still, full-year profits should be “broadly in line” with the company’s guidance, the last cut to which came in May.
Bad start to new year
Things haven’t picked up in the opening weeks of the new financial year, either, with bosses warning that sales so far have been “weaker than expected”.
Worryingly, the slowdown is a result of poor demand across “a number of markets”, as well as the loss of customers after last year’s price hikes.
“As a result, the group now expects Household revenues to be flat for the 12 months to 30 June 2020 with group earnings expected to be slightly below the year to 30 June 2019.”
Time to go private?
“As feared, the price increases that the company was forced to take in a highly competitive retail market across Europe has led to significant contract losses, while lower rate of demand suggests that higher promotional intensity from branded players, which is drawing consumers away from private label,” said City broker Liberum.
“Private Label businesses in Europe seem to not be very suited for public listings given so many external factors (commodity costs, logistics costs, tough customers) that are often not best played out in the public glare.
“However, one has to wonder what would be the exit strategy for a PE firm that takes the company private, given that it is still the market leader in Private Label in Europe and may not be easily sellable to industry peers.”