REG - McBride PLC - Final Results
17/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240917:nRSQ4122Ea&default-theme=true
RNS Number : 4122E McBride PLC 17 September 2024
McBride plc
("McBride" or the "Group")
Preliminary Results Announcement
Strong operational and strategic progress delivering sales volume and profit
growth
17 September 2024
McBride, the leading European manufacturer and supplier of private label and
contract manufactured products for the domestic household and professional
cleaning/hygiene markets, announces its preliminary results for the year ended
30 June 2024.
Divisional and customer focus delivering improved results
· Overall market for private label household cleaning products
continues to grow
· Total market sales volumes grew 5.7%, with private label volumes
up 7.2%, reflecting our focus on customer partnerships
· Good performance in strategic focus areas of laundry and Germany,
which saw sales volume growth of 8.0% and 6.2% respectively
· Strong second half recovery in contract manufacturing, with early
start of a new long-term contract
· All divisions delivered profit growth, building on momentum of
2023
· Transformation programme progressing to plan and on track to
deliver £50 million of net benefits by 2028
· Sustainability commitment enhanced with appointment of a
dedicated team; confirmation of Science Based Target initiative (SBTi)
alignment with targets set for the coming years
Financial highlights
· Revenue of £934.8m (2023: £889.0m), up 5.2% (6.2% at constant
currency((1)))
· Adjusted operating profit((2)) of £67.1m (2023: £13.5m),
slightly ahead of upgraded market expectations
· Operating profit of £64.3m (2023: £10.3m)
· Adjusted profit before tax((2)) of £53.1m (2023: £0.3m)
· Profit before tax of £46.5m (2023: loss of £15.1m)
· Net debt((2)) at £131.5m (30 June 2023: £166.5m), representing
1.5x adjusted EBITDA((1))
Positive outlook for continued profitable growth
· Early months of new financial year seeing overall sales volumes
in line with expectations
· Encouraging signs of continued contract manufacturing momentum,
building on strong second half
· Healthy pipeline of new launches and business wins, as the Group
prioritises growth initiatives
· Input costs for the main raw materials remain steady, with costs
of recycled materials and natural-based chemicals increasing in line with our
expectations
· Group full-year outlook is consistent with current market
expectations*, targeting a third consecutive year of revenue growth, with
profitability significantly ahead of the historical average
* Current market expectations refer to a Group compiled consensus of broker
forecasts for FY25 of:
· Adjusted operating profit £59.7m
· Net debt £111.3m
Chris Smith, Chief Executive Officer, commented:
"It has been an excellent financial and operational performance by the Group.
While market dynamics have remained favourable, with a continued consumer
trend towards private label across European household cleaning product
markets, it is the effective execution of our strategy that has led McBride to
capitalise on this environment. Our efforts to further develop our customer
partnerships, together with improved consumer insights to support product
range developments and innovation led by our specialist divisional teams, will
continue to drive future growth.
Strong operational delivery, focused growth initiatives, and effective cost
and margin management, have led each division to generate profitable growth
for the year, resulting in the Group's significantly increased adjusted
operating profit, slightly ahead of the upgraded market expectations. In
addition, our commitment to reducing debt levels has led to a £35.0 million
reduction in net debt for the year.
The Transformation programme is progressing to plan, with a number of key
projects moving from design to delivery phase in 2025. The Group has made an
encouraging start to the new financial year and while there are signs of
increased brander activity, private label demand remains robust with contract
manufacturing maintaining the momentum of the fourth quarter. As such, we look
forward to the future with confidence."
Year ended Year ended Constant
30 June 30 June Reported currency
£m (unless otherwise stated) 2024 2023 Change change((1))
Revenue 934.8 889.0 5.2% 6.2%
Adjusted operating profit 67.1 13.5 53.6 53.8
Operating profit 64.3 10.3 54.0
Adjusted profit before taxation 53.1 0.3 52.8 52.9
Profit/(loss) before taxation 46.5 (15.1) 61.6
Adjusted diluted earnings per share((3)) 21.7p 0.0p 21.7p
Diluted earnings/(loss) per share((3)) 18.8p (6.6)p 25.4p
Net debt 131.5 166.5 (35.0)
Adjusted return on capital employed((2)) 33.5% 6.4% 27.1ppts
(1)Comparatives translated at financial year 2024 exchange rates.
(2)Refer to note 19 for definition.
(3)See note 8.
Analyst and investor presentation
A results presentation will be available on the McBride plc investor relations
website from 10.00am today.
McBride plc
Chris Smith, Chief Executive Officer
Mark Strickland, Chief Financial Officer
Instinctif Partners 0207 457 2020
Guy Scarborough
Hannah Scott
Forward-looking Statements
This announcement contains forward-looking statements about financial and
operational matters. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. They
sometimes use words such as "may", "will", "could", "should", "aim", "expect",
"plan", "intend", "anticipate", "believe", "achieve", "project", "predict",
"seek", "estimate", "objective", "goal", "target" or other words of similar
meaning. These statements are based on the current views, expectations,
assumptions and intentions of management, and are based on information
available to management as at the date of this announcement. Because they
relate to future events and are subject to future circumstances, these
forward-looking statements are subject to risks, uncertainties and other
factors which may not have been in contemplation as at the date of the
announcement and/or which are beyond McBride plc's ability to control or
precisely estimate, including (but not limited to) those set out in this
announcement and the economic and business circumstances occurring from time
to time in the countries, sectors and markets in which McBride plc operates.
As a result, actual financial results, operational performance and other
future developments could differ materially from those envisaged by the
forward-looking statements. No assurance can be given that any particular
expectation will be met, and undue reliance should not be placed on any
forward-looking statements. Additional factors that may affect future results
are contained in the "Principal risks and uncertainties" section of McBride
plc's most recent Annual Report and Accounts.
Any forward-looking statements contained in this announcement speak only as of
the date they are made. Neither McBride plc nor any of its affiliates
undertake any obligation to update or revise any forward-looking statements,
whether as a result of new information, future developments or otherwise,
except to the extent required by applicable law or regulation.
This announcement does not constitute an offer or invitation to underwrite,
subscribe for, or otherwise acquire or dispose of any McBride plc shares or
other securities, or of any of the businesses or assets described in the
announcement, nor shall it (or any part of it) or the fact of its distribution
form the basis of, or be relied upon in connection with, any contract
therefore.
Overall business performance
It has been a year of significant growth and progress for McBride, with the
Group delivering an excellent financial and operational performance. All five
divisions maintained the positive momentum created in the second half of 2023,
generating profit growth for the year, which is a testament to our specialist
teams and their ability to execute our strategy. Whilst the consumer trend
towards private label has presented a rising tide of potential growth
opportunities, it is McBride's operational delivery that has ensured such a
strong trading and financial performance.
It is also pleasing to report that the Group continued to make good progress
against its strategic imperative of ensuring a safe working environment. The
lost time incident frequency rate fell to 0.75 (2023: 0.88), with new tools
and an online reporting system being introduced. At the year end, 11 of the
Group's 15 manufacturing locations had been free of lost time incidents for
over 100 days.
The Group continued to capitalise on higher demand for everyday value private
label household cleaning products, with overall sales volumes up 5.7% and
private label sales volumes up 7.2%. The strong demand for McBride's products
was driven by a combination of new business wins and growth of existing
private label products. Whilst contract manufacturing volumes were lower in
the first half of the year and for the year overall, they increased by 13.4%
in the second half, largely due to strong fourth quarter volumes from the
commencement of a substantial new long-term contract. In the second half,
there were some signs of increased promotional activity from manufacturers of
branded products, but all divisions continued to see solid demand for private
label products. Customer service levels (CSL) improved by 2.5ppts compared to
last year, with the second half performance being over 3ppts higher than the
first half, as issues on a small number of the Group's manufacturing lines
were resolved.
The Group's strong sales volume performance resulted in revenue increasing by
5.2% to £934.8 million (2023: £889.0m), and adjusted operating profit of
£67.1 million (2023: £13.5m) being delivered slightly ahead of upgraded
market expectations. The Group performed well in its strategic focus areas of
laundry and Germany, which delivered sales volume growth of 8.0% and 6.2%
respectively. Whilst the Group's profit performance has been driven in part by
sales volume growth, it was underpinned by a combination of strong margin
management, improved operational output and tight cost control in an
inflationary environment.
Net debt reduction has remained a key area of focus for McBride. As presented
at the Capital Markets Day (CMD) in March 2024, net debt/adjusted EBITDA is
one of the primary financial metrics used to measure progress against the
Group's strategic priorities. Pleasingly, this focus resulted in net debt
closing at £131.5 million, a £35.0 million reduction versus the prior year
(2023: £166.5m) and a net debt/adjusted EBITDA of 1.5x, already positioning
the Group close to achieving its net debt/adjusted EBITDA ambition of less
than 1.5x.
Inflationary environment
Over the course of the year, prices for consumers continued to rise and
cost-of-living pressures resulted in continued strong demand for good value,
high-quality private label products across the Group's markets. The challenge
for McBride has been how to effectively and reliably serve the significantly
increased demand. As such, the divisions have successfully focused on
efficient supply chain and logistics management, with a key principle of the
business being the ability to deliver an effective end-to-end supply chain
solution.
The raw materials environment has been relatively benign, with generally
weaker demand lowering input cost pressure, which has supported McBride's
strong financial performance. However, as the Group exited the financial year,
it has started to see upward pressure on certain materials, particularly
recycled materials and natural alcohol-based products, as customer and
consumer demand for these materials continued to increase.
Strategic progress
At the CMD, McBride presented the significant progress achieved in the
implementation of its Compass strategy and outlined the key elements of its
Transformation programme. Importantly, each division remains focused on
delivery of its key objectives, with the strategies continuing to be as
relevant today as they were when they were first implemented in 2021.
In terms of the Transformation programme, it is pleasing to report that the
initiatives are progressing to plan, as the Group works towards its target of
£50 million of net benefits, annualising at £17 million adjusted operating
profit in 2028. The focus at present is on the transition from the technical
design stages to a phased implementation of three priority initiatives: SAP
S/4HANA, 'Commercial Excellence' and 'Service Excellence'.
One of McBride's key strengths is the depth to which its divisions are
embedded in their sectors and markets. It is this focused specialism that
provides exceptional product and technological knowledge, together with the
ability to adapt to changing customer and consumer needs. Over the past two
years, the Group has developed closer partnerships with its customers to
enhance the value proposition provided to them. In addition to creating more
dynamic pricing arrangements, the clear customer-centric approach means that
the divisions can respond quickly and with agility to evolving consumer needs,
as well as having a better platform to promote product innovations.
Innovation
The development of innovative products remains at the heart of McBride and is
a driver of many of its new business wins. Throughout the year, the divisions
have continued to create new solutions to meet changing consumer demands and
ensure reliable delivery for their customers. A common theme across the whole
business is the move to more compact or more concentrated products, reducing
the weight of product to transport and the volume of required packaging.
Additionally, during the year, Unit Dosing adapted product packaging formats
from plastic to carton packs, Liquids introduced improved product
formulations, Powders developed innovative solutions for greater compaction
and Aerosols introduced lighter-weight packaging to mitigate the impact of
input cost pressures.
Sustainability
A commitment to sustainability, relevant and tuned to the needs of our
stakeholders and wider society, is core to the Group's strategy and corporate
proposition. McBride continues to operate strong levels of governance, as
would be expected of a listed company, and has made great strides in engaging
with its workforce and local communities. During the year, McBride appointed a
small, dedicated team to drive its environmental impact reduction plans. The
Group signed up to the SBTi, the only major private label household supplier
to have done so, setting goals for the coming years on all three carbon
scopes. The divisions' research and development teams work to ensure that each
new product launched is less carbon intense than the one it replaces.
Current trading and outlook
The first two months of the new financial year have seen overall volume levels
in line with the Group's expectations. The overall market for household
cleaning products is showing volume growth, and within that demand for private
label products remains robust in the face of initiatives from branded
manufacturers to recover market share. The divisions have a good pipeline of
new product launches and business wins ahead and continue to prioritise growth
initiatives. Input costs for the main raw materials remain steady overall, but
with costs of recycled materials and natural-based chemicals increasing in
line with expectations. The business will continue to manage its margins
through informed and co-operative dialogue with its customers.
The next year is a crucial period for a number of the Group's transformation
projects, especially the 'gold programmes', being the SAP S/4HANA ERP system
upgrade, Commercial Excellence and Service Excellence. The Group remains
confident in the quality of delivery and the benefits that will be delivered
from these Transformation initiatives.
The Group's outlook for the year is consistent with analyst expectations,
which would represent a third consecutive year of revenue growth, with
profitability levels significantly ahead of our historical average.
Divisional performance review
Year ended Year ended Constant
30 June 30 June Reported currency
2024 2023 change change
Revenue £m £m % %
Liquids 532.8 497.9 7.0% 7.7%
Unit Dosing 233.6 234.2 (0.3)% 0.7%
Powders 92.8 85.9 8.0% 9.2%
Aerosols 50.9 46.2 10.2% 11.6%
Asia Pacific 24.7 24.8 (0.4)% 8.3%
Group 934.8 889.0 5.2% 6.2%
Year ended Year ended Constant
30 June 30 June Reported currency
2024 2023 change change
Adjusted operating profit/(loss) £m £m £m £m
Liquids 45.6 10.5 35.1 35.0
Unit Dosing 19.4 10.0 9.4 9.2
Powders 6.0 (0.7) 6.7 7.0
Aerosols 2.1 0.3 1.8 1.8
Asia Pacific 1.4 1.1 0.3 0.4
Corporate (7.4) (7.7) 0.3 0.4
Group 67.1 13.5 53.6 53.8
Liquids performance review
Revenue grew to £532.8 million (2023: £497.9m), a 7.7% increase on a
constant currency basis, generating an adjusted operating profit of £45.6
million (2023: £10.5m) and resulting in an adjusted operating profit margin
of 8.6% (2023: 2.1%).
Driven by sales volume growth of 6.6%, the strong performance was supported by
efficient operational delivery and the effect of prior year pricing actions
agreed with customers to offset significant input cost inflation. All major
geographies saw sales volume and revenue growth, with a standout performance
in France, as consumers continued to switch from branded to private label
products in response to increased pressure on their disposable incomes.
Private label revenue increased by 9.4%, driven principally by private label
share growth and new contract wins, and was the result of a strategic focus on
building customer partnerships. In the strategic focus areas of laundry,
private label sales volumes grew by 17.9% on a constant currency basis, driven
by contract wins and a focused approach. Sales volumes of private label
products in the dishwash and cleaners categories grew broadly in line with the
wider markets.
Contract manufacturing volumes decreased by 1.8%; however, volumes in the
second half increased by 24.1%, driven by a major new customer contract, which
is expected to generate further growth in 2025.
Liquids has made good progress with the Transformation programme, creating
efficiencies and capacity through the continued rollout of Lean manufacturing
methodology across the division and using innovation to improve
sustainability. The development of more concentrated products, together with a
move towards carton packaging, supports the Group's commitment to
sustainability by reducing the use of water and plastic in the manufacturing
process.
Unit Dosing performance review
On a constant currency basis, revenue increased by 0.7% to £233.6 million
(2023: £234.2m), generating an adjusted operating profit of £19.4 million
(2023: £10.0m) and resulting in an adjusted operating profit margin of 8.3%
(2023: 4.3%).
While the number of customer units grew by 1.1%, the volume of individual
doses sold grew by 6.2%, driven by a shift in sales mix towards larger
consumer packs. Volume growth in doses was seen across all product categories
and in both private label and contract manufacturing customer segments,
despite certain operational challenges limiting laundry capsules output.
Contract manufacturing sales volumes increased by 22.4% in the second half,
mainly driven by new product launches, with this positive momentum expected to
continue into 2025.
Despite the average sales price per dose reducing by 5.2% on a constant
currency basis, driven by successful efforts to create more compact and
increasingly sustainable products and certain price reductions, the division
improved profitability through operating leverage from higher production
volumes, strong margin management and tight cost controls.
As outlined at the CMD, product leadership remains at the heart of Unit
Dosing's strategy. Expertise in designing and manufacturing compacted products
and sustainable packaging solutions, providing its customers with affordable,
easy-to-use, fit-for-purpose, sustainable products, led to multiple new
business wins in 2024 and created a healthy pipeline of new product launches.
Under the 'FleXellence' initiative also discussed at the CMD, the division
made investments to improve the flexibility of operations and increase
capacity for key product and packaging formats, while ensuring the right
balance between output increases, cost to produce and the flexibility required
to fully satisfy its customers' needs.
Powders performance review
Revenue grew to £92.8 million (2023: £85.9m), a 9.2% increase on a constant
currency basis, generating an adjusted operating profit of £6.0 million
(2023: loss of £0.7m) and resulting in an adjusted operating profit margin of
6.5% (2023: operating loss margin of 0.8%).
This strong turnaround performance resulted from a combination of good
operational delivery, business wins outpacing contract losses, and a strong
recovery in demand from industrial and institutional customers. More broadly,
underlying cost-of-living pressures supported the continued trend of consumers
switching to private label laundry powder from branded products and other
higher-cost laundry product formats.
The division's return to profitability was also underpinned by the proactive
cost mitigation actions initiated in 2023 and, in part, by the easing of raw
material cost inflation.
In the overall powders market, whilst volumes increased slightly by 0.9%,
pricing increased in value by 5.5%, mainly due to branders increasing prices,
widening the price gap between private label and brands. The Powders division
gained market share versus higher-cost branded competition. Across the five
major European markets, private label volume share in laundry rose to 29.8%
(2023: 29.1%).
In line with the strategic priorities initially outlined in 2021, Powders
continued to deliver award-winning products, led by research and development
product compaction and sustainability actions. This is a key component of a
wider programme to better tailor products to meet the needs of European
consumers, with the aim of being the 'go-to' powder specialist. The focus on
operational excellence resulted in efficiency improvements and improved
customer service levels. Powders secured a number of new customer wins,
gaining new contract manufacturing customers and expanding its private label
presence into new geographic regions.
As outlined at the CMD, laundry powder remains a core part of the Group's
product offering in the strategically important laundry category. Powders has
developed a winning formula of being an efficient powder specialist, meeting
its customers' needs by offering a wide portfolio of products, ranging from
low-cost everyday value to premium award-winning products. Powders will
continue on its journey to become the 'go to' powder specialist, by being the
low-cost leader, driving efficiencies by improving asset utilisation,
continuing to build on technical and R&D expertise and targeting growth
opportunities in new geographies and channels.
Aerosols performance review
Revenue grew to £50.9 million (2023: £46.2m), an 11.6% increase on a
constant currency basis, generating an adjusted operating profit of £2.1
million (2023: £0.3m) and resulting in an adjusted operating profit margin of
4.1% (2023: 0.6%).
Delivering on its strategy to expand horizons beyond France, several contract
wins in the year delivered good growth in Germany and Iberia. Private label
and personal care achieved standout performances, with revenue increasing by
16.0% and 17.5% respectively, on a constant currency basis. A clear focus on
innovation, particularly leveraging sustainability credentials, allowed the
introduction of more eco-friendly packaging and greener formulations using
natural ingredients. In addition to making its products more sustainable, new
product developments enabled the realisation of cost efficiencies.
As outlined at the CMD, Aerosols has developed strong relationships with
customers, thanks to its proven track record of being fast, agile and
reliable. From its established position as a leader in personal care and
household aerosol products, Aerosols has a strong base from which to expand
into new territories, driving further growth supported by significant capex
investments to expand its manufacturing capacity and capabilities.
Asia Pacific performance review
Revenue grew to £24.7 million (2023: £24.8m), an 8.3% increase on a constant
currency basis, generating an adjusted operating profit of £1.4 million
(2023: £1.1m), and resulting in an adjusted operating profit margin of 5.7%
(2023: 4.4%).
During the year, sales of personal care products grew strongly, particularly
as the Malaysia facility returned to normal supply levels to customers in
Southeast Asia and Australia after the extended Covid-19 slowdown period.
Second half revenue growth of 13.1% on a constant currency basis, was
significantly up versus 4.0% growth in the first half, as the division secured
new personal care contracts, offsetting the partial loss of business with a
major customer at the end of the prior financial year. Production output at
the Vietnam facility increased significantly in the fourth quarter as a result
of a new contract manufacturing agreement.
As outlined at the CMD, with its well-invested and flexible manufacturing
capacity, the division is well positioned to grow in the Asia-Pacific region
that boasts some of the world's fastest growing economies and a growing middle
class that is increasingly demanding environmentally-friendly health and
wellness products. The division will leverage its manufacturing capacity and
product development knowhow to drive growth opportunities in household
cleaning products, developing new contract manufacturing relationships and
extending the regional reach for its private label products. More concretely,
while the personal care products should continue their strong momentum into
FY25, the Malaysia site will also begin to supply new household products to
Australia in the first half.
Group operating results
Operating profit of £64.3 million was significantly higher than the prior
year (2023: £10.3m). Adjusted operating profit of £67.1 million also
improved significantly (2023: £13.5m), with the adjusted operating profit
margin increasing from 1.5% to 7.2%. The Group's improved profitability
continues to be underpinned by a focus on margin management and volume growth
realised through a combination of new business wins and higher demand on
existing private label contracts.
Adjusted EBITDA of £87.1 million (2023: £34.1m) reflected the strong
trading and operational performance.
Exceptional items
Exceptional items of £4.6 million were recorded during the year
(2023: £13.0m). The charge comprised the following:
· £0.8 million costs relating to the re-evaluation of the
environmental remediation provision (2023: £0.8m); and
· £3.8 million charged to finance costs (2023: £12.2m). The
charge primarily related to the termination of the upside sharing fee. As
announced on 25 October 2023, the Group agreed to make a one-off payment of
£5.0 million to its lender group in respect of the upside sharing fee. As
£1.5 million had already been recognised at 30 June 2023, a further £3.5
million cost was recognised in the year. Costs of £12.2 million incurred in
the prior year related to the independent business review and amendment of the
Group's revolving credit facility (RCF).
Finance costs
The decrease in total finance costs from £25.4 million to £17.8 million was
mainly driven by the reduction in exceptional finance costs. At
£14.0 million, adjusted finance costs were £0.8 million higher than the
prior year (2023: £13.2m), driven by high market interest rates. Excluding
pension interest costs and the impact of foreign exchange movements,
underlying adjusted finance costs of £12.1 million (2023: £12.9m) decreased
by £0.8 million despite high market interest rates, due to the reduction in
the cost of borrowing resulting from lower levels of net debt.
Taxation
Reported profit before taxation was £46.5 million (2023: loss of £15.1m).
Adjusted profit before taxation was £53.1 million (2023: £0.3m). The tax
charge on adjusted profit before tax for the year is £14.8 million (2023:
£0.3m) and the effective tax rate is 28% (2023: 100%).
The statutory effective tax rate for the year is 28% (2023: 24%).
The Group operates across a number of jurisdictions and tax risk can arise in
relation to the pricing of cross‑border transactions. Associated provisions
have reduced in the year mainly due to statute of limitation expiries.
Earnings/(loss) per share
On an adjusted basis, diluted earnings per share was 21.7 pence (2023: loss of
0.0p). Total adjusted basic earnings per share((1)) increased to 22.2 pence
(2023: loss of 0.0p), with basic earnings per share at 19.3 pence (2023: loss
of 6.6p).
(1)Refer to note 19 for definition.
Payments to shareholders
Under the terms of the amended RCF announced on 29 September 2022, the
Company may not, except with the consent of its lender group, declare, make or
pay any dividend or distribution to its shareholders prior to an 'exit event',
being a change of control, refinancing of the RCF in full, prepayment and
cancellation of the RCF in full, or upon the termination date of the RCF,
being May 2026. Hence, the Board is not recommending a final dividend for the
financial year ended 30 June 2024.
Cash flow and balance sheet
Year ended Year ended
30 June 30 June
2024 2023
£m £m
Adjusted EBITDA 87.1 34.1
Working capital excluding provisions and pensions (4.6) 7.1
Share-based payments 1.6 0.5
Loss on disposal of property, plant and equipment 1.4 0.3
Impairment of property, plant and equipment 0.2 -
Pension deficit reduction contributions (4.0) (4.0)
Free cash flow((1)) 81.7 38.0
Exceptional items (1.0) (1.4)
Interest on borrowings and lease liabilities less interest receivable (10.9) (11.4)
Refinancing costs paid (5.5) (12.3)
Tax paid (5.1) (1.8)
Net cash generated from operating activities 59.2 11.1
Net capital expenditure((2)) (19.6) (12.0)
Repayment of lease liabilities (4.5) (4.3)
Debt financing activities (25.9) 2.6
Settlement of derivatives 1.1 0.4
Free cash flow to equity((3)) 10.3 (2.2)
Purchase of own shares (2.8) -
Net increase/(decrease) in cash and cash equivalents 7.5 (2.2)
Free cash flow was £81.7 million (2023: £38.0m) in the year to 30 June 2024,
mostly attributable to the strong performance in adjusted EBITDA. Working
capital outflows of £4.6 million (2023: £7.1m inflow) reflected an increase
in trade receivables, driven by the growth in revenue.
Refinancing costs paid of £5.5 million (2023: £12.3m) mainly reflected the
payment of £5.0 million to McBride's lender group to terminate the upside
sharing fee. The increase in tax paid to £5.1 million (2023: £1.8m) reflects
the return to taxable profit across the tax jurisdictions in which the Group
operates.
During the year, net capital expenditure was £19.6 million (2023: £12.0m) in
cash terms. The £7.6 million increase reflects a return to more normal levels
of capital expenditure after a period of careful management of cash flows to
mitigate increases in net debt. The Group continues to prioritise investment
to support divisional growth objectives and the SAP S/4HANA programme.
Strong levels of cash generation resulted in a net repayment of £25.9 million
external debt, significantly reducing the amount drawn on the Group's RCF.
The Group's net assets increased to £63.4 million (2023: £37.1m).
Gearing((4)) decreased to 66.0% (30 June 2023: 78.4%) as net debt levels
decreased by £35.0 million. Adjusted ROCE((1)) of 33.5% was significantly
higher than the prior year (2023: 6.4%) driven by the increased operating
profit.
(1)Refer to note 19 for definition.
(2)Net capital expenditure is capital expenditure less proceeds from sale of
fixed assets.
(3)Free cash flow to equity excludes cash flows relating to transactions with
shareholders.
(4)Gearing represents net debt divided by the average of opening and closing
capital.
Bank facilities and net debt
Net debt at 30 June 2024 was £35.0 million lower than the prior year end at
£131.5 million (2023: £166.5m).
Throughout the year, the Group had a €175 million multi-currency,
sustainability-linked RCF. This facility ensures the Group continues to have
significant levels of liquidity headroom.
At 30 June 2024, liquidity((1)) was £98.3 million (2023: £59.3m). Liquidity
throughout the year remained comfortably above the RCF's minimum liquidity
covenant of £15 million.
At 30 June 2024, the net debt cover ratio((1)), as defined under the RCF
funding arrangements, was 0.8x (2023: 2.9x) and the interest cover((1)) was
6.8x (2023: 2.7x). The amount undrawn on the facility was £82.9 million
(2023: £40.0m). Under the RCF agreement, net debt cover and interest cover
covenants will be tested quarterly with effect from 30 September 2024.
The RCF, which is aligned with the Loan Market Association's 'Sustainability
Linked Loan Principles', incorporates three sustainability performance targets
which are central to McBride's commitment to maintaining a responsible
business and contributing actively to a more sustainable future:
1. Renewable energy: McBride strives to reduce its environmental impact by
increasing the percentage of energy from renewable sources from 5.9% in 2020
to 70.0% in 2026. During the year, 54.9% (2023: 42.1%) of the Group's energy
came from renewable sources, surpassing the loan agreement target of 50.0% by
30 June 2024.
2. Recycled content: Plastics are a significant element in many of
McBride's final products. During the year, 98.8% (2023: 98.2%) of polyethylene
terephthalate (PET) plastic packaging sourced in manufacturing the Group's
products had post‑consumer recycled (PCR) content, exceeding the loan
agreement target of 84.0%. This also significantly exceeds the Company's own
target of 94.0% PCR by 2026.
3. Responsible sourcing: McBride aims to source all paper and card
components responsibly via FSC®-approved suppliers, with the percentage of
virgin carton sourced from FSC®-approved suppliers increasing from 50.0% in
2020 to 100.0% in 2026. By 30 June 2024, the percentage of FSC®-certified
skillets sourced was 78.9% (2023: 55.6%), slightly below the loan agreement
target of 80.0% by 30 June 2024. The limitation in the use of FSC®-sourced
board is due to product mix and transition impacts. McBride continues to focus
on improving recyclability via product design and working closely with
customers.
Successful achievement of all three annual targets results in a reduction of
0.05% of the margin of the facility.
At 30 June 2024, the Group had a number of facilities whereby it could borrow
against certain of its trade receivables. In the UK, the Group had a £20
million facility, committed until May 2026. In Germany and Denmark, the Group
had a €45 million facility, committed until May 2026. In France, Belgium and
Spain, the Group had an unlimited facility, committed until May 2026. The
Group can borrow from the provider of the relevant facility up to the lower of
the facility limit and the value of the qualifying receivables.
(1)Refer to note 19 for definition.
Pensions
In the UK, the Group operates a defined benefit pension scheme, which is
closed to new members and to future accrual.
A cash flow driven investment (CDI) strategy was implemented during the first
half of the financial year to 30 June 2020. Using credit/bond investments, the
CDI strategy was intended to deliver a stable, more certain, expected return
and reduce volatility. The strategy previously targeted a c.100% hedge of
interest rates and inflation. This strategy worked well until the UK
government bond crisis in 2022. Following that crisis, and the resultant
changes in liability-driven investment managers' collateral requirements, the
Trustee amended the strategy in October 2022 and, as an interim step, moved to
an unlevered government bond-based hedge with c.40% of interest rate and
inflation hedging. The investment strategy was then reviewed and hedging was
increased to c.65% of interest rates and inflation during October to December
2023 to broadly hedge the funding level of the Fund and strike a balance
between risk and return objectives and liquidity needs of the Fund.
At 30 June 2024, the Group recognised a deficit in the scheme of £27.5
million (30 June 2023: £24.7m). The increase in deficit is due to a reduction
in corporate bond yields over the year, leading to a decrease in the discount
rate used to value the Fund's liabilities, which has led to an increase in the
liabilities and a loss on assets in excess of interest income.
Following the triennial valuation at 31 March 2021, McBride and the Trustee
agreed a new deficit reduction plan based on the scheme funding deficit of
£48.4 million. The current level of deficit contributions of £4.0 million
per annum is payable until 31 March 2028. McBride separately agreed that, from
1 October 2024, conditional profit-related contributions of £1.7 million per
annum will be paid over the period to 31 March 2028. If adjusted operating
profit exceeds £35.0 million, additional annual deficit contributions of
£1.7 million will be due over the following year. If adjusted operating
profit is below £30.0 million then no profit-related contributions will be
due the following year. If reported adjusted operating profit is between
£30.0m and £35.0m, a proportion of the £1.7 million contribution will be
due over the following year, with incremental increases of £0.34 million of
additional contributions for each whole £1.0 million of adjusted operating
profit in excess of £30.0 million. As adjusted operating profit for the
twelve months ended 31 March 2024 exceeded £35.0 million, additional deficit
contributions of £0.14 million will be payable each month from 1 October
2024, with total additional payments for the year ended 30 June 2025 expected
to be £1.3 million. McBride also agreed to make additional contributions such
that the total deficit contributions in any year match the value of any
dividend paid. The funding arrangements and recovery plan will next be
reviewed by McBride and the Trustee as part of the 31 March 2024 valuation,
which has a statutory deadline for signing of 30 June 2025.
The Directors acknowledge the appeal judgement dated 25 July 2024 in the case
of NTL vs Virgin Media and will be reviewing the implications for the Group in
the coming months.
The Group has other post-employment benefit obligations outside the UK that
amounted to £1.9 million (30 June 2023: £1.9m).
Principal risks and uncertainties
The Group is subject to both internal and external risk factors to its
business and has a well-established set of risk management procedures. The
following risks and uncertainties are those that the Directors believe could
have the most significant impact on the Group's business:
· Changing market, customer and consumer dynamics;
· Disruption to systems and processes;
· Financing risks;
· Supply chain resilience;
· Safe and high-quality products;
· Health and safety;
· Climate change and environmental concerns;
· Challenges in attracting and retaining talent;
· Increased regulation;
· Economic, political and macro environment instability; and
· Business transformation challenges.
Consolidated Income Statement
Year ended 30 June 2024
2024 2023
Adjusting items Adjusting items
Adjusted Total Adjusted Total
Note £m £m £m £m £m £m
Revenue 3 934.8 - 934.8 889.0 - 889.0
Cost of sales (586.9) - (586.9) (625.4) - (625.4)
Gross profit 347.9 - 347.9 263.6 - 263.6
Distribution costs (81.3) - (81.3) (77.9) - (77.9)
Administrative costs (196.3) (2.8) (199.1) (168.4) (3.2) (171.6)
Impairment of trade receivables (1.6) - (1.6) (3.5) - (3.5)
Loss on disposal of property, plant and equipment
(1.4) - (1.4) (0.3) - (0.3)
Impairment of property, plant and equipment
(0.2) - (0.2) - - -
Operating profit/(loss) 67.1 (2.8) 64.3 13.5 (3.2) 10.3
Finance costs 6 (14.0) (3.8) (17.8) (13.2) (12.2) (25.4)
Profit/(loss) before taxation 53.1 (6.6) 46.5 0.3 (15.4) (15.1)
Taxation 7 (14.8) 1.6 (13.2) (0.3) 3.9 3.6
Profit/(loss) for the year 38.3 (5.0) 33.3 - (11.5) (11.5)
Earnings/(loss) per ordinary share attributable to the owners of the parent 8
during the year
Basic earnings/(loss) per share 19.3p (6.6)p
Diluted earnings/(loss) per share 18.8p (6.6)p
Consolidated Statement of Comprehensive Income
Year ended 30 June 2024
2024 2023
£m £m
Profit/(loss) for the year 33.3 (11.5)
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Currency translation differences of foreign subsidiaries 0.1 (0.6)
Gain on net investment hedges 0.8 0.4
(Loss)/gain on cash flow hedges in the year (1.3) 3.7
Cash flow hedges transferred to profit or loss (1.6) (1.4)
Taxation relating to the items above (0.6) (0.4)
(2.6) 1.7
Items that will not be reclassified to profit or loss:
Net actuarial loss on post‑employment benefits (5.6) (14.1)
Taxation relating to the items above 1.3 3.5
(4.3) (10.6)
Total other comprehensive expense (6.9) (8.9)
Total comprehensive income/(expense) 26.4 (20.4)
Consolidated Balance Sheet
At 30 June 2024
2024 2023
Note £m £m
Non-current assets
Goodwill 10 19.7 19.7
Other intangible assets 10 9.8 6.5
Property, plant and equipment 10 114.4 117.8
Derivative financial instruments 11 1.7 4.5
Right-of-use assets 10 8.1 8.5
Deferred tax assets 42.8 41.6
196.5 198.6
Current assets
Inventories 119.6 121.5
Trade and other receivables 148.8 145.7
Current tax assets 2.1 2.3
Derivative financial instruments 11 0.3 0.6
Cash and cash equivalents 12 9.3 1.6
280.1 271.7
Total assets 476.6 470.3
Current liabilities
Trade and other payables 220.1 219.6
Borrowings 11 67.4 49.3
Lease liabilities 11 3.1 3.5
Derivative financial instruments 11 0.4 1.8
Current tax liabilities 12.9 6.7
Provisions 14 2.2 2.7
306.1 283.6
Non-current liabilities
Borrowings 11 65.0 109.8
Lease liabilities 11 5.3 5.5
Pensions and other post-employment benefits 13 29.4 26.6
Provisions 14 1.4 2.6
Deferred tax liabilities 6.0 5.1
107.1 149.6
Total liabilities 413.2 433.2
Net assets 63.4 37.1
Equity
Issued share capital 16 17.4 17.4
Share premium account 68.6 68.6
Other reserves 76.3 78.9
Accumulated losses (98.9) (127.8)
Total equity 63.4 37.1
Consolidated Cash Flow Statement
Year ended 30 June 2024
2024 2023
Note £m £m
Operating activities
Profit/(loss) before tax 46.5 (15.1)
Finance costs 17.8 25.4
Exceptional items excluding finance costs 4 0.8 0.8
Share-based payments charge 1.6 0.5
Depreciation of property, plant and equipment 10 16.3 16.8
Depreciation of right-of-use assets 10 3.7 3.8
Loss on disposal of property, plant and equipment 1.4 0.3
Amortisation of intangible assets 10 2.0 2.4
Impairment of property, plant and equipment 0.2 -
Operating cash flow before changes in working capital and exceptional items 90.3 34.9
Increase in receivables (5.2) (1.3)
Decrease/(increase) in inventories 0.6 (2.7)
Increase in payables - 11.1
Operating cash flow after changes in working capital before exceptional items 85.7 42.0
Additional cash funding of pension scheme (4.0) (4.0)
Cash generated from operations before exceptional items 81.7 38.0
Cash outflow in respect of exceptional items (1.0) (1.4)
Cash generated from operations 80.7 36.6
Interest paid (10.9) (11.4)
Refinancing costs paid (5.5) (12.3)
Taxation paid (5.1) (1.8)
Net cash generated from operating activities 59.2 11.1
Investing activities
Purchase of property, plant and equipment (14.3) (10.3)
Purchase of intangible assets (5.3) (1.7)
Settlement of derivatives used in net investment hedges 1.1 0.4
Net cash used in investing activities (18.5) (11.6)
Financing activities
Drawdown/(repayment) of overdrafts 12 11.2 (6.2)
Drawdown/(repayment) of other loans 12 7.4 (4.9)
(Repayment)/drawdown of bank loans 12 (44.5) 13.7
Repayment of IFRS 16 lease obligations 12 (4.5) (4.3)
Purchase of own shares (2.8) -
Net cash used in financing activities (33.2) (1.7)
Increase/(decrease) in net cash and cash equivalents 7.5 (2.2)
Net cash and cash equivalents at the start of the year 1.6 4.5
Currency translation differences 0.2 (0.7)
Net cash and cash equivalents at the end of the year 9.3 1.6
Consolidated Statement of Changes in Equity
Year ended 30 June 2024
Other reserves
Issued Share Cash flow Currency Capital Accumulated Total
share premium hedge translation redemption losses equity
capital account reserve reserve reserve £m £m
£m £m £m £m £m
At 1 July 2023 17.4 68.6 3.7 (2.0) 77.2 (127.8) 37.1
Profit for the year - - - - - 33.3 33.3
Other comprehensive income/(expense)
Items that may be reclassified
to profit or loss:
Currency translation differences
of foreign subsidiaries - - - 0.1 - - 0.1
Gain on net investment hedges - - - 0.8 - - 0.8
Loss on cash flow hedges in the year - - (1.3) - - - (1.3)
Cash flow hedges transferred to profit or loss
- - (1.6) - - - (1.6)
Taxation relating to the items above - - (0.6) - - - (0.6)
- - (3.5) 0.9 - - (2.6)
Items that will not be reclassified
to profit or loss:
Net actuarial loss on
post‑employment benefits - - - - - (5.6) (5.6)
Taxation relating to the items above - - - - - 1.3 1.3
- - - - - (4.3) (4.3)
Total other comprehensive (expense)/income
- - (3.5) 0.9 - (4.3) (6.9)
Total comprehensive (expense)/income - - (3.5) 0.9 - 29.0 26.4
Transactions with owners of the parent
Purchase of own shares - - - - - (2.8) (2.8)
Share-based payments - - - - - 1.6 1.6
Taxation relating to the items above - - - - - 1.1 1.1
At 30 June 2024 17.4 68.6 0.2 (1.1) 77.2 (98.9) 63.4
Other reserves
Issued Share Cash flow Currency Capital Accumulated Total
share premium hedge translation redemption losses equity
capital account reserve reserve reserve £m £m
£m £m £m £m £m
At 1 July 2022 17.4 68.6 1.8 (1.8) 77.2 (106.2) 57.0
Loss for the year - - - - - (11.5) (11.5)
Other comprehensive income/(expense)
Items that may be reclassified
to profit or loss:
Currency translation differences
of foreign subsidiaries - - - (0.6) - - (0.6)
Gain on net investment hedges - - - 0.4 - - 0.4
Gain on cash flow hedges in the year - - 3.7 - - - 3.7
Cash flow hedges transferred to profit or loss
- - (1.4) - - - (1.4)
Taxation relating to the items above - - (0.4) - - - (0.4)
- - 1.9 (0.2) - - 1.7
Items that will not be reclassified
to profit or loss:
Net actuarial loss on
post‑employment benefits - - - - - (14.1) (14.1)
Taxation relating to the items above - - - - - 3.5 3.5
- - - - - (10.6) (10.6)
Total other comprehensive income/(expense)
- - 1.9 (0.2) - (10.6) (8.9)
Total comprehensive income/(expense) - - 1.9 (0.2) - (22.1) (20.4)
Transactions with owners of the parent
Share-based payments - - - - - 0.5 0.5
At 30 June 2023 17.4 68.6 3.7 (2.0) 77.2 (127.8) 37.1
At 30 June 2024, the accumulated losses include a deduction of £3.2 million
(2023: £0.4m) for the cost of own shares held in relation to employee share
schemes.
Notes to the Consolidated Financial Information
1. Corporate information
McBride plc ('the Company') is a public company limited by shares incorporated
and domiciled in the United Kingdom and registered in England and Wales. The
Company's ordinary shares are listed on the London Stock Exchange. The
registered office of the Company is Middleton Way, Middleton, Manchester M24
4DP. For the purposes of DTR 6.4.2R, the Home State of McBride plc is the
United Kingdom.
The Company and its subsidiaries (together, 'the Group') is Europe's leading
manufacturer and supplier of private label and contract manufactured products
for the domestic household and professional cleaning/hygiene markets. The
Company develops and manufactures products for retailers and brand owners in
Europe and the Asia-Pacific region.
2. Accounting policies
Basis of preparation
The financial information does not constitute statutory accounts of the Group
for the years ended 30 June 2024 and 2023 within the meaning of sections
434(3) and 435(3) of the Companies Act 2006 or contain sufficient information
to comply with the disclosure requirements of IFRS. The financial information
for 2023 is derived from the statutory accounts for 2023 which have been
delivered to the Registrar of Companies.
The statutory accounts for the year ended 30 June 2024 have been reported on
by the Company's auditors, PricewaterhouseCoopers LLP, and will be delivered
to the Registrar of Companies in due course. The auditors have reported on
those statutory accounts; their report was (i) unqualified, (ii) did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report and (iii) did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
The financial information has been prepared on the going concern basis in
accordance with UK-adopted International Financial Reporting Standards and
with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The financial statements have been prepared
under the historical cost convention, modified in respect of the revaluation
to fair value of financial assets and liabilities (derivative financial
instruments) at fair value through profit or loss, assets held for sale and
defined benefit pension plan assets. The financial information has been
prepared applying accounting policies that were applied in the preparation of
the Company's published consolidated financial statements for the year ended
30 June 2023.
Going concern
The Group's base case forecasts are based on the Board-approved budget and
three-year plan. They indicate sufficient liquidity, debt cover and interest
cover throughout the going concern review period to ensure compliance with
current banking covenants. The Group's base case scenario assumes:
· revenue growth of c.4% per annum, driven predominantly by volume
increases;
· raw material prices stabilising after the exceptional levels of input
cost inflation seen in the previous two years;
· interest rates reducing in line with current market expectations; and
· a Sterling to Euro exchange rate of £1:€1.15.
The Directors have considered the Group's principal risks with the highest
likelihood of occurrence or the severest impact, and the adverse effect this
would have on the Group's financial forecasts. Changing market, customer and
consumer dynamics could adversely impact revenue growth. Lack of supply chain
resilience influences raw material and packaging input costs. Economic,
political and macro environment instability potentially affects both revenue
growth and input costs, in addition to market interest rates and foreign
exchange rates. Considering these risks, together with the risk that the
Group's revolving credit facility is reduced as part of the upcoming
refinancing project, a severe but plausible downside scenario to stress test
the Group's financial forecasts has been modelled, with the following
assumptions:
· no revenue growth in 2025;
· revenue growth reducing to 1% in 2026, being half of the Group's
long-term target of 2%;
· an increase in raw material and packaging input costs compared to
latest forecasts;
· interest rates increasing by 100 basis points;
· Sterling appreciating significantly against the Euro to £1:€1.25;
and
· revolving credit facility reducing from €175 million to €150
million.
In the event that such a severe but plausible downside risk scenario occurs,
the Group would remain compliant with current banking covenants.
After reviewing the current liquidity position and financial forecasts, stress
testing for potential risks and considering the uncertainties described above,
and based on the currently committed funding facilities, the Directors have a
reasonable expectation that the Group has sufficient resources to continue in
operational existence and without significant curtailment of operations for
the foreseeable future. For these reasons, the Directors continue to adopt the
going concern basis of accounting in preparing the Group financial statements.
Viability statement
In accordance with the requirements of the UK Corporate Governance Code 2018,
the Directors have performed a robust assessment of the principal risks facing
the Group, including those that would threaten its business model, future
performance, solvency or liquidity. The Board has determined that a three-year
period to 30 June 2027 constitutes an appropriate period over which to provide
its viability statement. The strategic plan is based on detailed action plans
developed by the Group with specific initiatives and accountabilities. There
is inherently less certainty in the projections for years four and five.
The Group has a €175 million multi‑currency, sustainability-linked RCF,
with a tenor to May 2026, as well as a number of facilities whereby it could
borrow against certain of its trade receivables: in the UK a £20 million
facility, committed until May 2026; in Germany and Denmark a €45 million
facility, committed until May 2026; and in France, Belgium and Spain an
unlimited facility committed until May 2026. The Group can borrow from the
provider of the relevant facility up to the lower of the facility limit and
the value of the qualifying receivables. The Group's strategic plan assumes
that financing facilities will be available on an appropriate basis and as
required to meet the Group's capital investment and growth strategies for the
entire viability period.
In assessing the Group's viability, the Directors have considered the current
financial position of the Group and its principal risks and uncertainties. The
analysis considers a severe but plausible downside scenario, featuring the
principal risks from a financial and operational perspective, with the
resulting impact on key metrics, such as liquidity headroom and covenants. The
downside risk scenario assumes sensitivity around exchange rates and interest
rates, along with significant reductions in revenue and cash flow over the
three-year period. The Group's geographic footprint, product diversification
and access to external financing all provide resilience against these factors
and the other principal risks to which the Group is exposed.
Whilst the Group ends the year with net current liabilities of £26.0 million
(2023: £11.9m), the Directors conclude that the Group has access to
sufficient financing facilities in order to support this position.
After conducting their viability review, the Directors confirm that they have
a reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the three-year period of their
assessment to 30 June 2027.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the consolidated financial statements from which this
preliminary announcement is derived requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported assets, liabilities, income and expenses. Actual results may
differ from these estimates. The significant judgements made by management in
applying the Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated financial
statements for the year ended 30 June 2023.
Alternative performance measures (APMs)
The performance of the Group is assessed using a variety of adjusted measures
that are not defined under IFRS and are therefore termed non-GAAP measures.
APM Definition Source
Adjusted operating profit Operating profit before amortisation of intangible assets and exceptional Consolidated Income Statement
items
Adjusted EBITDA Adjusted operating profit before depreciation Consolidated Income Statement
Adjusted profit before tax Adjusted profit before tax is based on adjusted operating profit less adjusted Consolidated Income Statement
finance costs
Adjusted profit for the year Adjusted profit for the year is based on adjusted profit before tax less Consolidated Income Statement
taxation relating to non-adjusting items
Adjusted earnings per share Adjusted earnings per share is based on the Group's profit/(loss) for the year Note 8
adjusted for the items excluded from operating profit in arriving at adjusted
operating profit, and the tax relating to those items Consolidated Income Statement
Free cash flow Free cash flow is defined as cash generated before exceptional items Consolidated Cash Flow Statement
Cash conversion % Cash conversion % is defined as free cash flow as a percentage of adjusted Consolidated Income Statement
EBITDA (applicable only when adjusting EBITDA is positive)
Consolidated Cash Flow Statement
Adjusted return on capital employed (ROCE) Adjusted ROCE is defined as adjusted operating profit divided by the average Consolidated Income Statement
of opening and closing capital employed. Capital employed is defined as the
total of goodwill and other intangible assets, property, plant and equipment, Consolidated Balance Sheet
right-of-use assets, inventories, trade and other receivables less trade and
other payables.
Liquidity Liquidity means, at any time, without double counting, the aggregate of: (a) Consolidated Cash Flow Statement
cash; (b) cash equivalents; (c) the available facility at that time, which
comprises the headroom available in the RCF and other committed facilities; Note 19
and (d) the aggregate amount available for drawing under uncommitted
facilities.
Net debt Net debt consists of cash and cash equivalents, overdrafts, bank and other Consolidated Balance Sheet
loans and lease liabilities.
The APMs we use may not be directly comparable with similarly titled measures
used by other companies.
Adjusted measures
Adjusted measures exclude specific items that are considered to hinder
comparison of the trading performance of the Group's businesses either year on
year or with other businesses. This presentation is consistent with the way
that financial performance is measured by management and reported to the Board
and Executive Committee, and is used for internal performance analysis and in
relation to employee incentive arrangements. The Directors present these
adjusted measures in the financial statements in order to assist investors in
their assessment of the trading performance of the Group. Directors do not
regard these measures as a substitute for, or superior to, the equivalent
measures calculated and presented in accordance with IFRS.
During the years under review, the items excluded from operating profit in
arriving at adjusted operating profit were the amortisation of intangible
assets and exceptional items. Exceptional items and amortisation are excluded
from adjusted operating profit because they are not considered to be
representative of the trading performance of the Group's businesses during the
year.
See note 19 'Additional information' for further information on alternative
performance measures.
3. Segment information
Segmental reporting
Financial information is presented to the Board by business division for the
purposes of allocating resources within the Group and assessing the
performance of the Group. There are five separately managed and accountable
business divisions. The European business is managed as four divisions based
on product technology and the Asia Pacific division is based on geography:
· Liquids;
· Unit Dosing;
· Powders;
· Aerosols; and
· Asia Pacific.
Intra-group revenue from the sale of products is agreed between the relevant
customer-facing units and eliminated in the segmental presentation that is
presented to the Board, and therefore excluded from the reported figures. Most
overhead costs are directly attributed within the respective divisions' income
statements. Central overheads are allocated to a reportable segment
proportionally using an appropriate cost driver. Corporate costs, which
include the costs associated with the Board and the Executive Leadership Team,
governance and listed company costs. The costs of certain Group functions
(mostly associated with financial disciplines such as treasury) are reported
separately. Exceptional items are detailed in note 4 and are not allocated to
the reportable segments as this reflects how they are reported to the Board.
Finance expense and income are not allocated to the reportable segments,
as the Group Treasury function manages this activity, together with the
overall net debt position of the Group.
The Board uses adjusted operating profit to measure the profitability of the
Group's businesses. Adjusted operating profit is, therefore, the measure of
segment profit presented in the Group's segment disclosures. Adjusted
operating profit represents operating profit before specific items that are
considered to hinder comparison of the trading performance of the Group's
businesses either year on year or with other businesses. During the years
under review, the items excluded from operating profit in arriving at adjusted
operating profit were the amortisation of intangible assets and exceptional
items.
Liquids Unit Dosing Powders Aerosols Asia Pacific Corporate Group
Year ended 30 June 2024 £m £m £m £m £m £m £m
Segment revenue 532.8 233.6 92.8 50.9 24.7 - 934.8
Adjusted operating profit/(loss) 45.6 19.4 6.0 2.1 1.4 (7.4) 67.1
Amortisation of intangible assets (2.0)
Exceptional items (note 4) (0.8)
Operating profit 64.3
Finance costs (note 6) (17.8)
Profit before taxation 46.5
Inventories 61.2 31.3 14.1 10.3 2.7 - 119.6
Capital expenditure 10.3 7.7 2.0 0.6 0.3 - 20.9
Amortisation and depreciation 12.8 5.8 1.4 0.6 1.4 - 22.0
Liquids Unit Dosing Powders Aerosols Asia Pacific Corporate Group
Year ended 30 June 2023 £m £m £m £m £m £m £m
Segment revenue 497.9 234.2 85.9 46.2 24.8 - 889.0
Adjusted operating profit/(loss) 10.5 10.0 (0.7) 0.3 1.1 (7.7) 13.5
Amortisation of intangible assets (2.4)
Exceptional items (note 4) (0.8)
Operating profit 10.3
Finance costs (note 6) (25.4)
Loss before taxation (15.1)
Inventories 59.4 33.8 15.8 9.6 2.9 - 121.5
Capital expenditure 5.9 4.9 1.7 0.4 0.3 - 13.2
Amortisation and depreciation 13.2 6.3 1.4 0.6 1.5 - 23.0
Geographical information
Revenue Non-current assets
2024 2023 2024 2023
£m £m £m £m
United Kingdom 194.4 187.8 36.8 34.5
Germany 212.4 205.8 - -
France 201.5 188.0 9.8 9.1
Italy 78.4 73.9 14.4 14.3
Spain 41.2 35.1 9.5 9.6
Other Europe 177.5 169.5 77.6 80.2
Asia Pacific 25.4 25.7 3.9 4.8
Rest of the World 4.0 3.2 - -
Total 934.8 889.0 152.0 152.5
The geographical revenue information above is based on the location of the
customer.
Non-current assets for this purpose consist of goodwill, other intangible
assets, property, plant and equipment and right-of-use assets.
Revenue by major customer
In 2024 and 2023, no individual customer provided more than 10% of the Group's
revenue. During 2024, the top ten customers accounted for 52% of total Group
revenue (2023: 53%).
4. Exceptional items
Analysis of exceptional items
2024 2023
£m £m
Environmental remediation 0.8 0.8
Total charged to operating profit 0.8 0.8
Group refinancing:
Independent business review and refinancing costs 3.8 12.2
Total charged to finance costs 3.8 12.2
Total exceptional items before tax 4.6 13.0
Total exceptional items of £4.6 million were recorded during the year (2023:
£13.0m). The charge comprised the following:
· £0.8 million costs relating to the re-evaluation of the
environmental remediation provision (2023: £0.8m); and
· £3.8 million charged to finance costs (2023: £12.2m). The charge
primarily related to the termination of the upside sharing fee. As announced
on 25 October 2023, the Group agreed to make a one-off payment of £5.0
million to its lender group in respect of the upside sharing fee. As £1.5
million had already been recognised at 30 June 2023, a further £3.5 million
cost was recognised in the year. Costs of £12.2 million incurred in the prior
year related to the independent business review and amended RCF.
5. Operating profit
Operating profit is stated after charging:
2024 2023
£m £m
Cost of inventories (included in cost of sales)* 519.9 573.2
Employee costs 157.2 142.0
Amortisation of intangible assets (note 10) 2.0 2.4
Depreciation of property, plant and equipment (note 10) 16.3 16.8
Depreciation of right-of-use assets (note 10) 3.7 3.8
Impairment:
Property, plant and equipment (note 10) 0.2 -
Inventories 8.9 3.0
Trade receivables 1.6 2.6
Expense relating to short-term leases 0.2 0.3
Expense relating to low-value leases 0.1 0.1
Research and development costs not capitalised 10.0 7.3
Net foreign exchange loss 0.5 0.4
(*)Direct material costs only.
6. Finance costs
2024 2023
£m £m
Finance costs
Interest on bank loans and overdrafts 10.5 11.1
Interest on lease liabilities 0.3 0.3
Net foreign exchange loss/(gain) 0.7 (0.2)
Amortisation of facility fees 0.5 0.5
Non-utilisation and other fees 0.8 1.0
12.8 12.7
Post-employment benefits:
Net interest cost on defined benefit obligation (note 13) 1.2 0.5
Adjusted finance costs 14.0 13.2
Costs associated with independent business review and refinancing (note 4) 3.8 12.2
Total finance costs 17.8 25.4
Interest rate caps are used to manage the interest rate profile of the Group's
borrowings. Accordingly, interest income from interest rate caps of £1.6
million (2023: £0.5m) is included in interest on bank loans and overdrafts.
No interest costs were capitalised in the current year (2023: £nil).
7. Taxation
Income tax expense/(credit)
2024 2023
Total attributable to ordinary UK Overseas Total UK Overseas Total
shareholders £m £m £m £m £m £m
Current tax expense/(credit)
Current year 0.4 12.0 12.4 - 5.0 5.0
Adjustment for prior years - (0.8) (0.8) - (0.2) (0.2)
0.4 11.2 11.6 - 4.8 4.8
Deferred tax expense/(credit)
Origination and reversal of temporary differences
1.0 (0.3) 0.7 (8.8) 0.9 (7.9)
Adjustment for prior years 0.7 0.2 0.9 (0.2) (0.3) (0.5)
1.7 (0.1) 1.6 (9.0) 0.6 (8.4)
Income tax expense/(credit) 2.1 11.1 13.2 (9.0) 5.4 (3.6)
The current tax adjustment for the prior year was £0.5 million charge (2023:
£nil) and £0.2 million credit (2023: £0.2m credit) relating to the release
of provisions for uncertain tax treatments due to the expiry of statutes of
limitation.
Reconciliation to UK statutory tax rate
The total tax charge/(credit) on the Group's profit/(loss) before tax for the
year is higher (2023: higher) than the amount that would be charged at the UK
standard rate of corporation tax for the following reasons:
2024 2023
Total attributable to ordinary shareholders £m £m
Profit/(loss) before tax 46.5 (15.1)
Profit/(loss) before tax multiplied by the UK corporation tax rate of 25.0% 11.6 (3.1)
(2023: 20.5%)
Effect of tax rates in foreign jurisdictions 0.3 1.1
Non-deductible expenses 0.5 0.4
Change in tax rate - (1.6)
Other differences 0.7 0.3
Adjustment for prior years 0.1 (0.7)
Total tax charge/(credit) in profit or loss 13.2 (3.6)
Exclude adjusting items 1.6 3.9
Total tax charge in profit or loss before adjusting items 14.8 0.3
The taxation is provided at current rates on the profits earned for the year.
There have been no changes in applicable tax rates that have impacted the
current year tax charge.
The main rate of UK corporation tax applicable for the financial year is 25.0%
(2023: 20.5%, being the weighted average of 19.0% for nine months and 25.0%
for three months).
8. Earnings/(loss) per ordinary share
Basic earnings/(loss) per ordinary share is calculated by dividing the
profit/(loss) for the year attributable to owners of the Company by the
weighted average number of the Company's ordinary shares in issue during the
financial year. The weighted average number of the Company's ordinary shares
in issue excludes 1,372,779 shares (2023: 623,968 shares), being the weighted
average number of own shares held during the year in relation to employee
share schemes.
Reference 2024 2023
Weighted average number of ordinary shares in issue (million) a 172.7 173.4
Effect of dilutive share options (million) 4.2 2.5
Weighted average number of ordinary shares for calculating diluted b 176.9 175.9
earnings/(loss) per share (million)
Diluted earnings/(loss) per share is calculated by adjusting the weighted
average number of ordinary shares in issue assuming the conversion of all
potentially dilutive ordinary shares. Where potentially dilutive ordinary
shares would cause an increase in earnings per share, or a decrease in loss
per share, the diluted loss per share is considered equal to the basic loss
per share.
During the year, the Company had equity-settled awards with a nil exercise
price that are potentially dilutive ordinary shares.
Adjusted earnings per share measures are calculated based on profit/(loss) for
the year attributable to owners of the Company before adjusting items as
follows:
2024 2023
Reference £m £m
Profit/(loss) for calculating basic and diluted earnings/(loss) per share c 33.3 (11.5)
Adjusted for:
Amortisation of intangible assets (note 10) 2.0 2.4
Exceptional items (note 4) 4.6 13.0
Taxation relating to the items above (1.6) (3.9)
Profit for calculating adjusted earnings per share d 38.3 -
2024 2023
Reference pence pence
Basic earning/(loss) per share c/a 19.3 (6.6)
Diluted earnings/(loss) per share c/b((1)) 18.8 (6.6)
Adjusted basic earnings per share d/a 22.2 0.0
Adjusted diluted earnings per share d/b((1)) 21.7 0.0
(1)Diluted loss per share is considered equal to the basic loss per share as
potentially dilutive ordinary shares cause a decrease in the loss per share.
9. Payments to shareholders
Dividends paid and received are included in the Company financial statements
in the year in which the related dividends are actually paid or received or,
in respect of the Company's final dividend for the year, approved by
shareholders.
Under the terms of the amended RCF announced on 29 September 2022, the Company
may not, except with the consent of its lender group, declare, make or pay any
dividend or distribution to its shareholders prior to an 'exit event', being a
change of control, refinancing of the RCF in full, prepayment and cancellation
of the RCF in full, or upon the termination date of the RCF, being May 2026.
Hence, the Board is not recommending a final dividend for the financial year
ended 30 June 2024.
No payments to ordinary shareholders were made or proposed in respect of this
year or the prior year.
Furthermore, under the RCF the Company may not, except with the consent of its
lender group, redeem or repay any of its share capital prior to an exit event.
Therefore, the redemption of B Shares that would normally take place in
November each year will not take place. B Shares issued but not redeemed are
classified as current liabilities.
Movements in the number of B Shares outstanding were as follows:
Nominal
Number value
000 £'000
Issued and fully paid
At 1 July 2022, 30 June 2023 and 30 June 2024 665,888 666
B Shares carry no rights to attend, speak or vote at Company meetings, except
on a resolution relating to the winding up of the Company.
10. Intangible assets, property, plant and equipment and right-of-use assets
Goodwill
and other Property,
intangible plant and Right-of-use
assets equipment assets
£m £m £m
Net book value at 1 July 2023 26.2 117.8 8.5
Currency translation differences - (1.1) (0.1)
Additions 5.3 15.6 3.4
Disposal of assets - (1.4) -
Impairment - (0.2) -
Depreciation charge - (16.3) (3.7)
Amortisation charge (2.0) - -
Net book value at 30 June 2024 29.5 114.4 8.1
Included within goodwill and other intangible assets is goodwill of £19.7
million (2023: £19.7m), computer software of £5.0 million (2023: £5.6m) and
customer relationships of £0.2 million (2023: £0.6m).
Capital commitments at 30 June 2024 amounted to £5.7 million (2023: £5.5m).
At 30 June 2024, the Group was committed to future minimum lease payments of
£0.3 million (2023: £2.1m) in respect of leases which have not yet commenced
and for which no lease liability has been recognised.
11. Financial risk management
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk, fair value interest rate risk, cash flow interest
rate risk and price risk), credit risk and liquidity risk.
There have been no material changes in the Group's risk management policies in
either the 30 June 2024 or 30 June 2023 financial years.
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels have been defined as follows:
· Level 1 - unadjusted quoted prices in active markets for identical
assets or liabilities
· Level 2 - inputs other than Level 1 that are observable for the asset
or liability, either directly (prices) or indirectly (derived from prices)
· Level 3 - inputs that are not based on observable market data
(unobservable inputs).
At At
30 June 30 June
2024 2023
£m £m
Level 2 assets
Derivative financial instruments
Forward currency contracts - 0.2
Interest rate caps 2.0 4.9
Total financial assets 2.0 5.1
Level 2 liabilities
Derivative financial instruments
Forward currency contracts (0.4) -
Interest rate caps - (0.3)
Upside sharing fee - (1.5)
Total financial liabilities (0.4) (1.8)
Derivative financial instruments
Derivative financial instruments comprise the foreign currency derivatives and
interest rate derivatives that are held by the Group in designated hedging
relationships.
Foreign currency forward contracts are measured by reference to prevailing
forward exchange rates. Foreign currency options are measured using a variant
of the Monte Carlo valuation model. Interest rate caps are measured by
discounting the related cash flows using yield curves derived from prevailing
market interest rates.
In the prior year, an upside sharing fee was identified as an embedded
derivative. The amended RCF that the Group agreed with its lender group on 29
September 2022 included an upside sharing mechanism whereby a fee would become
payable by the Group to members of the lender group upon the occurrence of an
'exit event'. Such a fee was to be determined as the percentage of any
increase in the market capitalisation of the Group from 29 September 2022 to
the date of the exit event. At 30 June 2023, a valuation was performed using a
conventional Black-Scholes pricing model. As announced on 25 October 2023, the
Group agreed to make a one-off payment of £5.0 million to its lender group in
respect of the upside sharing fee, therefore the derivative was not recognised
in the current financial year.
Valuation levels and techniques
There were no transfers between levels during the year and no changes in
valuation techniques.
Financial assets and liabilities measured at amortised cost
The fair value of borrowings (including overdrafts and lease liabilities) are
as follows:
At At
30 June 30 June
2024 2023
£m £m
Current 70.5 52.8
Non-current 70.3 115.3
Total borrowings 140.8 168.1
The fair value of the following financial assets and liabilities approximate
to their carrying amount:
· trade and other receivables;
· other current financial assets;
· cash and cash equivalents; and
· trade and other payables.
12. Net debt
Movements in net debt were as follows:
IFRS 16 Currency
At 1 July non-cash Cash translation At 30 June
2023 movements((1)) flows differences 2024
£m £m £m £m £m
Overdrafts (0.6) - (11.2) - (11.8)
Bank loans (109.8) - 44.5 0.3 (65.0)
Other loans (48.7) - (7.4) 0.5 (55.6)
Lease liabilities (9.0) (3.7) 4.5 (0.2) (8.4)
Financial liabilities (168.1) (3.7) 30.4 0.6 (140.8)
Cash and cash equivalents 1.6 - 7.5 0.2 9.3
Net debt (166.5) (3.7) 37.9 0.8 (131.5)
(1)IFRS 16 non-cash movements includes additions £3.4 million, disposals of
£nil and interest charged of £0.3 million.
13. Pensions and post-employment benefits
The Group provides a number of post-employment benefit arrangements. In the
UK, the Group operates a closed defined benefit pension scheme and a defined
contribution pension scheme. Elsewhere in Europe, the Group has a number of
smaller post-employment benefit arrangements that are structured to accord
with local conditions and practices in the countries concerned. The Group also
recognises the assets and liabilities for all members of the defined
contribution scheme in Belgium, accounting for the whole defined contribution
section as a defined benefit scheme under IAS 19 'Employee Benefits', as there
is a risk the underpin will require the Group to pay further contributions to
the scheme.
At 30 June 2024, the Group recognised a deficit on its UK defined benefit
pension plan of £27.5 million (2023: £24.7m). The Group's post-employment
benefit obligations outside the UK amounted to £1.9 million (2023: £1.9m).
Non-governmental collected post-employment benefits had the following effect
on the Group's results and financial position:
2024 2023
£m £m
Profit or loss
Operating profit
Defined benefit schemes
Service cost and administration expenses (net of employee contribution) (0.6) (1.0)
Net charge to operating profit (0.6) (1.0)
Finance costs (0.5)
Net interest cost on defined benefit obligation (1.2)
Charge to profit/(loss) before taxation (1.8) (1.5)
Other comprehensive income/(expense)
Net actuarial loss (5.6) (14.1)
2024 2023
£m £m
Balance sheet
Defined benefit obligations
UK - funded (101.6) (98.1)
Other - unfunded (12.0) (12.4)
(113.6) (110.5)
Fair value of scheme assets
UK - funded 74.1 73.4
Other - unfunded 10.1 10.5
Deficit on the schemes (29.4) (26.6)
For accounting purposes, the UK scheme's benefit obligation as at 30 June 2024
has been calculated based on data gathered for the 2021 triennial actuarial
valuation and by applying assumptions made by the Company on the advice of an
independent actuary in accordance with IAS 19, 'Employee Benefits'.
Impact of NTL vs Virgin Media case, 25 July 2024
In June 2023, the High Court judged that amendments made to the Virgin Media
scheme were invalid because the scheme's actuary did not provide the
associated Section 37 certificate. The High Court's decision has wide-ranging
implications, affecting other schemes that were contracted out on a
salary-related basis and made amendments between April 1997 and April 2016.
The Fund was contracted out until 29 February 2016 and amendments were made
during the relevant period. As such, the ruling could have implications for
the Company. Following the Court of Appeal upholding the 2023 High Court
ruling on 25 July 2024, the Trustees initiated the process of investigating
any potential impact for the Fund.
As the detailed investigation is in progress, the Company considers that the
amount of any potential impact on the defined benefit obligation cannot be
confirmed and/or measured with sufficient reliability at the 2024 year end. We
are therefore disclosing this issue as a potential contingent liability at 30
June 2024 and will review again in 2025 based on the findings of the detailed
investigation.
14. Provisions
Reorganisation Independent
and Leasehold Environmental business
restructuring dilapidations remediation review Other Total
£m £m £m £m £m £m
At 1 July 2022 0.8 1.5 2.7 1.7 0.5 7.2
(Released)/charged to profit or loss (0.1) 0.2 0.7 1.0 - 1.8
Currency translation differences - - 0.1 - - 0.1
Utilisation (0.4) - (0.5) (2.6) (0.3) (3.8)
At 30 June 2023 0.3 1.7 3.0 0.1 0.2 5.3
(Released)/charged to profit or loss - (0.1) 0.8 3.8 - 4.5
Currency translation differences - - (0.2) - - (0.2)
Utilisation - (1.3) (0.8) (3.9) - (6.0)
At 30 June 2024 0.3 0.3 2.8 - 0.2 3.6
Analysis of provisions:
2024 2023
£m £m
Current 2.2 2.7
Non-current 1.4 2.6
Total 3.6 5.3
The closing provision for reorganisation and restructuring relates to the
Group's logistics transformation programme only. The provision is expected to
be fully utilised within twelve months of the balance sheet date.
The leasehold dilapidations provision relates to costs expected to be incurred
to restore leased properties to their original condition at the end of the
respective lease terms. A provision has been recognised for the present value
of the estimated expenditure required to undertake restoration works. Amounts
will be utilised as the respective leases end and restoration works are
carried out, within a period of approximately twelve months.
The environmental remediation provision relates to historical environmental
contamination at a site in Belgium. The additional costs in the year of
£0.8 million relate to a re-evaluation of the cost of environmental
remediation. The closing provision is expected to be utilised as the land is
restored within a period of approximately ten years, with £1.6 million
expected to be utilised within twelve months.
The independent business review provision related to the amendment of the
Group's revolving credit facility and banking covenants. The provision for
consultancy support for the independent business review programme was utilised
in the year.
Other provisions of £0.2 million are expected to be settled within a period
of approximately three years.
The amount and timing of all cash flows related to the provisions are
reasonably certain.
15. Exchange rates
The principal exchange rates used to translate the results, assets and
liabilities and cash flows of the Group's foreign operations into Sterling
were as follows:
Average rate Closing rate
2024 2023 2024 2023
Euro 1.16 1.15 1.18 1.17
US Dollar 1.26 1.20 1.26 1.27
Danish Krone 8.68 8.56 8.81 8.68
Polish Zloty 5.11 5.38 5.09 5.17
Czech Koruna 28.72 27.72 29.57 27.66
Hungarian Forint 449.75 453.41 466.81 433.34
Malaysian Ringgit 5.91 5.41 5.97 5.91
Australian Dollar 1.92 1.79 1.90 1.91
16. Share capital
Authorised, allotted and fully paid
Number £m
Ordinary shares of 10 pence each
At 1 July 2022, 30 June 2023 and 30 June 2024 174,057,328 17.4
Ordinary shares carry full voting rights and ordinary shareholders are
entitled to attend Company meetings and to receive payments to shareholders.
17. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties of the Company, have been eliminated on consolidation and therefore
are not required to be disclosed in these financial statements. Details of
transactions between the Group and other related parties are disclosed below.
Post-employment benefit plans
Contributions amounting to £7.0 million (2023: £6.5m) were payable by the
Group to pension schemes established for the benefit of its employees. At 30
June 2024, £0.5 million (2023: £0.6m) in respect of contributions due was
included in other payables.
Compensation of key management personnel
For the purposes of these disclosures, the Group regards its key management
personnel as the Directors and certain members of the senior executive team.
Compensation relating to key management personnel in respect of their services
to the Group was as follows:
2024 2023
£m £m
Short-term employee benefits 3.8 2.5
Post-employment benefits 0.1 0.1
Share-based payments 1.2 0.3
Total 5.1 2.9
18. Key performance indicators (KPIs)
Management uses a number of KPIs to measure the Group's performance and
progress against its strategic objectives. The most important of these are
noted and defined below:
Financial:
· Revenue: Revenue from contracts with customers from the sale of goods
is measured at the invoiced amount, net of sales rebates, discounts, value
added tax and other sales taxes.
· Transformation benefits: Net profit benefit achieved from the
implementation of the Transformation programmes.
· Adjusted EBITDA margin: The calculation of adjusted EBITDA, which
when divided by revenue gives this EBITDA margin, is defined in note 19.
· Free cash flow increase: Free cash flow is defined as cash generated
before exceptional items.
· Adjusted ROCE: Total adjusted operating profit divided by the average
of opening and closing capital employed. Capital employed is defined as the
total of goodwill and other intangible assets, property, plant and equipment,
right-of-use assets, inventories, and trade and other receivables, less trade
and other payables.
Non-financial:
· Lost time incident frequency rate: The number of lost time incidents
x 100,000 divided by total number of person-hours worked.
· Customer service level: The volume of products delivered in the
correct volumes and within requested timescales, as a percentage of total
volumes ordered by customers.
19. Additional information
Alternative performance measures
The performance of the Group is assessed using a variety of adjusted measures
that are not defined under IFRS and are therefore termed non-GAAP measures. A
reconciliation for each non-GAAP measure to the most directly comparable IFRS
measure is set out below.
Adjusted operating profit and adjusted EBITDA
Adjusted EBITDA means adjusted operating profit before depreciation. A
reconciliation between adjusted operating profit, adjusted EBITDA and the
Group's reported statutory operating profit is shown below:
2024 2023
£m £m
Operating profit 64.3 10.3
Exceptional items in operating profit (note 4) 0.8 0.8
Amortisation of intangibles (note 10) 2.0 2.4
Adjusted operating profit 67.1 13.5
Depreciation of property, plant and equipment (note 10) 16.3 16.8
Depreciation of right-of-use assets (note 10) 3.7 3.8
Adjusted EBITDA 87.1 34.1
Adjusted profit before tax and adjusted profit for the year
Adjusted profit before tax is based on adjusted operating profit less adjusted
finance costs. Adjusted profit for the year is based on adjusted profit before
tax less taxation relating to non-adjusting items. The table below reconciles
adjusted profit before tax to the Group's reported profit/(loss) before tax.
2024 2023
£m £m
Profit/(loss) before tax 46.5 (15.1)
Exceptional items (note 4) 4.6 13.0
Amortisation of intangibles (note 10) 2.0 2.4
Adjusted profit before tax 53.1 0.3
Taxation (note 7) (14.8) (0.3)
Adjusted profit for the year 38.3 -
Adjusted earnings/(loss) per share
Adjusted earning/(loss) per share is based on the Group's profit/(loss) for
the year adjusted for the items excluded from operating profit in arriving at
adjusted operating profit, and the tax relating to those items.
Free cash flow and cash conversion %
Free cash flow is one of the Group's KPIs by which our financial performance
is measured. It is primarily a liquidity measure; however free cash flow and
cash conversion % are also important indicators of overall operational
performance as they reflect the cash generated from operations. Free cash flow
is defined as cash generated before exceptional items. Cash conversion % is
defined as free cash flow as a percentage of adjusted EBITDA (applicable only
when adjusted EBITDA is positive). A reconciliation from net cash generated
from operating activities, the most directly comparable IFRS measure to free
cash flow, is set out as follows:
2024 2023
£m £m
Net cash generated from operating activities 59.2 11.1
Add back:
Taxation paid 5.1 1.8
Interest paid 10.9 11.4
Refinancing costs paid 3.8 12.3
Cash outflow in respect of exceptional items 2.7 1.4
Free cash flow 81.7 38.0
Adjusted EBITDA 87.1 34.1
Cash conversion % 94% 111%
Adjusted return on capital employed (ROCE)
Adjusted ROCE serves as an indicator of how efficiently we generate returns
from the capital invested in the business. It is a Group KPI that allows
management to evaluate the outcome of investment decisions. Adjusted ROCE is
defined as total adjusted operating profit divided by the average of opening
and closing capital employed. Capital employed is defined as the total of
goodwill and other intangible assets, property, plant and equipment,
right-of-use assets, inventories, trade and other receivables less trade and
other payables. There is no equivalent statutory measure within IFRS. Adjusted
ROCE is calculated as follows:
2024 2023 2022
£m £m £m
Goodwill (note 10) 19.7 19.7 19.7
Other intangible assets (note 10) 9.8 6.5 7.3
Property, plant and equipment (note 10) 114.4 117.8 122.9
Right-of-use assets (note 10) 8.1 8.5 11.3
Inventories 119.6 121.5 118.9
Trade and other receivables 148.8 145.7 145.4
Trade and other payables (220.1) (219.6) (206.9)
Capital employed 200.3 200.1 218.6
Average of opening and closing capital employed 200.2 209.4 214.0
Adjusted operating profit/(loss) 67.1 13.5 (24.5)
Adjusted ROCE % 33.5% 6.4% (11.4)%
Liquidity
Liquidity means, at any time, without double counting, the aggregate of:
(a) cash;
(b) cash equivalents;
(c) the available facility at that time, which comprises the headroom
available in the RCF and other committed facilities; and
(d) the aggregate amount available for drawing under uncommitted facilities.
The Company uses this measure to manage cash flow and ensure that financial
covenants are adhered to.
2024 2023
£m £m
Cash and cash equivalents 9.3 1.6
RCF headroom 82.9 40.0
Other committed facilities headroom - 17.5
Uncommitted facilities 6.1 0.2
Liquidity 98.3 59.3
Net debt
Net debt consists of cash and cash equivalents, overdrafts, bank and other
loans and lease liabilities.
Net debt is a key indicator used by management to assess the Group's
indebtedness and overall balance sheet strength.
Net debt is an alternative performance measure as it is not defined in IFRS. A
reconciliation from loans and other borrowings, lease liabilities and cash and
cash equivalents, the most directly comparable IFRS measures to net debt is
set out below:
2024 2023
£m £m
Current assets
Cash and cash equivalents 9.3 1.6
Current liabilities
Borrowings (67.4) (49.3)
Lease liabilities (3.1) (3.5)
(70.5) (52.8)
Non-current liabilities
Borrowings (65.0) (109.8)
Lease liabilities (5.3) (5.5)
(70.3) (115.3)
Net debt (131.5) (166.5)
Net debt cover ratio (banking basis)
The net debt cover ratio (banking basis) is an indicator of the Company's
ability to repay its debts. Under the RCF it is calculated as net debt (as
defined in the RCF agreement) divided by EBITDA (as defined in the RCF
agreement). The Company uses the ratio to ensure compliance with the RCF
financial covenants that will be tested quarterly from 30 September 2024.
2024 2023
£m £m
Net debt (as defined above) (131.5) (166.5)
Invoice discounting facilities 55.6 48.7
B Shares (note 9) (0.7) (0.7)
Lease liabilities 8.4 9.0
Adjustment for average exchange rates (0.9) (0.7)
Net debt banking basis (as defined in the RCF agreement) (69.1) (110.2)
Adjusted EBITDA 87.1 34.1
Net interest cost on defined benefit obligation (note 6) (1.2) (0.5)
Loss on disposal of property, plant and equipment (note 10) 1.4 0.3
Lease payments 4.5 4.3
EBITDA banking basis (as defined in the RCF agreement) 91.8 38.2
Net debt cover ratio (banking basis) 0.8x 2.9x
Interest cover ratio (banking basis)
The interest cover ratio (banking basis) is a measure of the Company's ability
to pay the interest on its outstanding debts. Under the RCF it is calculated
as EBITDA (as defined in the RCF agreement) divided by adjusted finance costs
(excluding net interest cost on defined benefit obligation). The Company uses
the ratio to ensure compliance with the RCF financial covenants that will be
tested quarterly from 30 September 2024.
2024 2023
£m £m
EBITDA banking basis (as defined in the RCF agreement) 91.8 38.2
Lease payments (4.5) (4.3)
EBITDA banking basis (as defined in the RCF agreement) 87.3 33.9
Adjusted finance costs excluding net interest cost on defined benefit 12.8 12.7
obligation (note 6)
Interest cover ratio (banking basis) 6.8x 2.7x
Annual General Meeting
The Annual General Meeting will be held on 12 November 2024.
Annual Report and Accounts
The Annual Report and Accounts will be published on the McBride plc website by
no later than 30 September 2024. Reflecting McBride's commitment to the
environment, a small number of printed copies will be sent to shareholders in
October 2024, on a 'by request only' basis.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FLFLAALIRLISRecent news on McBride
See all newsREG - McBride PLC - Holding(s) in Company
AnnouncementREG - McBride PLC - Holding(s) in Company
AnnouncementREG - McBride PLC - Holding(s) in Company
AnnouncementREG - McBride PLC - Holding(s) in Company
AnnouncementREG - McBride PLC - Half-year Report
Announcement