Good morning! Not a huge amount of news today, which is handy, as I still haven't prepared my slides for the two presentations I'm giving at Mello Workshops tomorrow & Friday! So looks like I'll be having a busy afternoon & evening rushing to get those finished. Should be a fun event - David Stredder says there are still a few tickets left, so not too late for anyone who wishes to join us at the last minute.
McBride (LON:MCB)
Share price: 96.25p
No. shares: 182.2m
Market Cap: £175.4m
Trading update - this company describes itself as Europe's leading provider of private label household and personal care products. For anyone not aware, private label means supermarket's own label products, which are cheaper than the big name branded products.
As you can see from the two year chart below, the shares have under-performed the FTSE Small Caps Index, although they put on a partial recovery spurt in Jan-Feb 2015, getting back to where they were about a year ago.
Today's update covers Q3, being the three months to 31 Mar 2015, so we're now getting close to their 30 Jun 2015 year end.
I note that they company only reports sales growth on a constant currency basis above, which is not very satisfactory - companies normally report both constant currency, and reported currency sales growth. Since currencies are volatile at the moment, with the Euro in particular having depreciated heavily, then I think the above reporting is a bit too selective. I imagine that sales in sterling might be down overall, which should have been stated.
Anyway, the key bit is that profit is in line with expectations, so that look alright overall.
Valuation - broker consensus is 7.89p EPS this year, so that puts the shares on a PER of 12.2, which sounds about right, if the company was debt free. Trouble is, it has a heavy debt burden on the balance sheet, last reported at £90m on 5 Jan 2015. That's just over half the market cap in net debt, so the valuation doesn't look appealing at all once you factor that in.
My opinion - the points I made here on 5 Jan 2015 still stand, so for me this is not a share of any interest. It beats me why anyone would be interested…
