Shares in Mcbride (LON:MCB) slid by 15.6% to 151.2p this morning after the private label household and personal care products supplier warned that rising raw materials costs could impact on its figures next year. In an update just ahead of its year-end on June 30, McBride said that operating profits were set to meet expectations but that overall revenue growth would be flat on last year following a 3% decline in sales during the fourth quarter. The company blamed the performance on ongoing branded promotional activity in UK combined with weak retail sales across Europe.

McBride noted that prices for key raw materials were set to increase by 4% by the end of June compared with December 2009. It warned that its markets “remain volatile” and there was a significant risk that its material costs would rise by a further 4-6% during the next financial year. It pointed out that while its business model was designed to manage raw material increases effectively, there would inevitably be a delay before recovery from customers.

Elsewhere, McBride said the year-end net debt was likely to be in line with expectations reflecting continued strong cash flows. It also announced that a new five-year €175m revolving credit facility agreement had been concluded with its banks on attractive terms. In addition, the company has initiated a further restructuring project in UK which is expected to deliver annualised cost savings of £4m with cash expenditure of £4m. McBride’s preliminary results are due on September 2, 2010.

McBride supplies more than 90% of Europe’s major retailers with own label household cleaning and personal care products. It also markets its own brands, including Clean n’ Fresh spray cleaners and Surcare detergents.

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