McBride plc (LON:MCB) has churned out another profit warning as the maker of private label household goods saw sales decline in UK and France.
Full year adjusted profit before tax is now expected to be roughly 15% lower than the current market consensus of £22.1mln, as long as there are no significant raw material cost changes.
READ: McBride slides as it predicts earnings will be second-half weighted
New chief executive Ludwig de Mot, the Belgian who replaced Rick de Vos in early November, has kicked off a review of the group’s strategy and operations, with the outcome to be reported before its June year-end.
Group revenues fell 1.4% year-on-year in the six months to December, with UK sales 8% down and France down 7%, “reflecting weaker private label activity”.
There was more positive news from south and eastern regions and Asia, where growth was 15.7%, 1.6% and 10.7% respectively.
Overall, McBride said it expects full year sales will be down on last year, with the decision to exit UK aerosol manufacturing last year meaning continuing revenues at constant currency were down 4.4%.
Costs of raw materials and packaging were “largely stable” but there were higher distribution costs as a result of growth in Germany.
“Cost improvement initiatives continue across the group and these are expected to show increased benefits in the second half year,” the company said.
Broker Shore Capital said: “Alas, this represents another warning from the Group, which ebbs and flows with forces and processes that often it cannot control.”
Analysts added: “McBride is a high quality operator in a very tough field. The business has never really been in control of its own destiny, in our view seeking to gain traction and add value against Tier 1, financially strong and innovative global fast moving goods proprietary brand giants and servicing challenging international supermarkets. At the same time it has to contend with the vagaries of the oil and oil derivatives markets and an emerging sustainability agenda in the household goods and cleaning arena.”