REG - McBride PLC - Half-year Report
25/02/2025 07:00
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RNS Number : 2779Y McBride PLC 25 February 2025
McBride plc
('McBride' or the 'Group')
Intention to reinstate annual dividends following continued revenue growth,
profitability improvement and net debt reduction
25 February 2025
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 unaudited interim results for the six
months ended 31 December 2024 (the 'period').
Capitalising on the Group's higher performance levels
· Ongoing consumer and retailer switch to high-quality, excellent-value
private label products supporting continued growth across the Group
· Total volume growth of 5.9%, with private label volumes increasing by
2.4% and contract manufacturing volumes rising 69.0% following launch of two
key contracts
· Profitable performance delivered by all five divisions
· Effective cash management sees further net debt reduction of £13.9m
since 30 June 2024
· Transformation programme progressing well and on track to deliver
target of £50m net benefits over five years
· Significant progress with the Science Based Target initiative (SBTi)
commitment as part of a wider sustainability agenda
· Intention to reinstate annual dividends post final 2025 results
Financial highlights
· Revenue of £471.4m (2023: £468.0m), up 0.7% (2.9% at constant
currency((1)))
· Adjusted operating profit((2)) of £32.0m (2023: £30.5m), up 7.9% at
constant currency((1))
· Operating profit of £31.0m (2023: £29.5m)
· Adjusted profit before taxation((2)) of £26.7m (2023: £22.4m)
· Profit before taxation of £25.7m (2023: £17.4m)
· Adjusted basic earnings per share of 11.9p (2023: 9.5p), up 25.3%
· Net debt((2)) at £117.6m (2023: £145.7m), representing 1.3x rolling
twelve months adjusted EBITDA((2))
Positive outlook supported by market conditions and operational delivery
· Full-year earnings on track to be in line with internal expectations
· Private label markets expected to maintain higher share penetration
as cost-of-living challenges continue
· Materials costs mostly stable going into the second half; other
inflation remains a headwind
· Transformation initiatives maturing over the next twelve months,
delivering further benefits
· Normalised funding position, providing the Group with optionality for
value creation
Half year Half year Constant
to 31 Dec to 31 Dec Reported currency
£m unless otherwise stated 2024 2023 change change((1))
Revenue 471.4 468.0 0.7% 2.9%
Adjusted operating profit((2)) 32.0 30.5 1.5 2.4
Operating profit 31.0 29.5 1.5
Adjusted profit before taxation((2)) 26.7 22.4 4.3 5.2
Profit before taxation 25.7 17.4 8.3
Adjusted basic earnings per share((3)) 11.9p 9.5p 2.4p
Diluted earnings per share 10.9p 7.0p 3.9p
Net debt((2)) 117.6 145.7 (28.1)
Adjusted return on capital employed((2)) 34.8% 22.8% 12.0ppts
((1))Comparatives translated at six months to 31 December 2024 exchange rates.
((2))Refer to note 2 for definition.
((3))See note 6.
Chris Smith, Chief Executive Officer, commented:
"McBride today reports excellent half-year results, which are in line with our
new elevated financial performance expectations and on track with the
medium-term targets outlined at our Capital Markets Day in March 2024. Our
divisional teams continue to execute their respective strategies, with all
five divisions healthily profitable. These results demonstrate a business
delivering a consistently improved performance.
With the Group's prospects in a much healthier position and with a more
normalised debt position, the Board recently announced its intention to
reinstate an annual dividend, details of which will be communicated at the
time of the final results in September 2025.
Our focus remains on driving performance excellence and maintaining the
momentum we have built, whilst continuing the Transformation programme and
achieving our sustainability targets. I would like to extend my gratitude to
our employees for their hard work and to our investors for their continued
support. Together, we are building a strong, resilient and reset McBride,
poised for future success."
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 020 7457 2020
Hannah Scott
Gus Chipungu
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
McBride built on the momentum of the last financial year and delivered a solid
performance both financially and operationally, demonstrating further evidence
of the Group's higher performance levels. Despite the backdrop of inflation,
strong operational delivery, careful management of costs and tight management
of margins have contributed to a period of steady, sustainable growth.
At a Group level, revenue increased by 0.7% to £471.4 million, up 2.9% on a
constant currency basis, with profit before taxation significantly up 47.7% at
£25.7 million (2023: £17.4m).
Group volumes increased by 5.9%, with continued progress in our core strategic
focus areas of Germany and laundry. During the period, the market continued to
show a consumer trend towards high-quality private label products to mitigate
cost-of-living pressures. Private label share in the overall household
cleaning products market in Europe is estimated to have risen to 35.6% by
volume, up 0.9ppts since 2023. In the past twelve months, McBride private
label volumes in laundry and dishwash outperformed the market and contract
manufacturing volumes increased by 69.0%, driven mostly by the launches of two
new multi-year contracts with large FMCG clients. This resulted in contract
manufacturing making up 13.4% of total revenue, up 1.9% on the same period
last year. Our medium-term target is to grow this proportion to 25%.
Customer service levels continued to improve, supported by our Transformation
programme and an ongoing focus across the business. This critical performance
improvement has ensured we are better serving customers, delivering increased
volumes and supporting further opportunities for strategic partnerships with
key customers.
The Group continued its progress on debt management, with net debt of £117.6
million at the end of the period, a year-on-year reduction of £28.1 million.
In November, McBride announced new long-term financing facilities, lifting the
block on shareholder distributions, allowing the normalisation of its capital
allocation options and providing it with a strong financial platform for the
coming years. With lower debt levels and improved rates and margins, adjusted
profit before tax improved by 19.2% and adjusted basic earnings per share rose
by 25.3% to 11.9 pence.
McBride's Transformation agenda continues to progress well and remains on
track to deliver £50 million net benefits over five years. The Commercial
Excellence programme is now live and the Service Excellence and SAP S/4HANA
programmes continue at pace, with the latter having progressed into the build
phase. The programmes in delivery provided a net benefit of £0.7 million
during the period.
Outlook
The Group's full-year adjusted operating profit estimate remains in line with
internal expectations. Consumer cost-of-living challenges persist, supporting
the ongoing strength of underlying private label demand across the Group's
main markets. Materials costs are generally flat, with the rises in certain
materials costs seen in the second quarter expected to moderate in the second
half, but other inflation remains evident across our activities. Momentum in
the business continues well, with a strong focus on growth, service
excellence, cost management and margin delivery to support our medium-term
financial performance and cash generation potential. The Transformation
programme will intensify over the next twelve months with projects maturing
and becoming embedded across the Group, leading to the delivery of the
expected net benefits. Our normalised financial position now provides
optionality on capital deployment, including the return of an annual divided.
Divisional performance review
Half year to Half year to Constant
31 Dec 31 Dec Reported currency
2024 2023 change change
Revenue £m £m % %
Liquids 268.9 266.4 0.9% 3.0%
Unit Dosing 118.1 116.5 1.4% 3.7%
Powders 44.0 47.2 (6.8)% (4.6)%
Aerosols 28.7 25.4 13.0% 16.2%
Asia Pacific 11.7 12.5 (6.4)% (7.1)%
Group 471.4 468.0 0.7% 2.9%
Half year to Half year to Constant
31 Dec 31 Dec Reported currency
2024 2023 change change
Adjusted operating profit/(loss) £m £m £m £m
Liquids 19.4 22.8 (3.4) (2.8)
Unit Dosing 10.7 7.9 2.8 2.9
Powders 4.1 3.2 0.9 1.1
Aerosols 1.6 0.5 1.1 1.1
Asia Pacific 0.7 0.7 - 0.1
Corporate (4.5) (4.6) 0.1 -
Group 32.0 30.5 1.5 2.4
Liquids performance review
Liquids revenue grew to £268.9 million (2023: £266.4m), a 3.0% increase on a
constant currency basis, generating an adjusted operating profit of £19.4
million (2023: £22.8m) and resulting in an adjusted operating profit margin
of 7.2% (2023: 8.6%).
This performance was driven by sales volume growth of 5.3%, with significant
growth in contract manufacturing, offset by lower gross margins resulting from
moderate input cost inflation and adverse product mix.
Contract manufacturing revenue increased by 58.5%, driven by the launch of a
new long-term customer contract at the end of the previous financial year.
Contract manufacturing share of total volumes doubled as a result.
Private label revenue increased by 0.9%, driven by volume growth of 1.5% as
markets remained largely positive and the division's performance continued to
outgrow the market. Private label volumes in the laundry category increased by
5.8%.
Volumes grew in key markets as the business continued to support its main
customers in growing and developing their private label offering.
Several structural, transformational and R&D investments were made in the
reporting period to set the business up for future innovation and growth.
Capital investments in automation and capacity expansion are due to come
online in the second half.
Unit Dosing performance review
Unit Dosing revenue grew to £118.1 million (2023: £116.5m), a 3.7% increase
on a constant currency basis, generating an adjusted operating profit of
£10.7 million (2023: £7.9m) and resulting in an adjusted operating profit
margin of 9.1% (2023: 6.8%).
The result was realised through a combination of volume leverage, improving
production efficiencies and effective control of overhead costs.
Sales volume in doses increased by 6.6% in the period, with growth in both
private label and contract manufacturing. Both dishwash and laundry categories
showed a positive doses volume development against the prior year. Production
in doses increased by 10.9%, allowing the division to improve inventory
composition and levels, supporting improved customer service performance.
The division continues to make good progress in finding the optimal balance
between portfolio renewal and the introduction of new products, with further
product launches planned in 2025.
Powders performance review
Powders revenue decreased to £44.0 million (2023: £47.2m), down 4.6% on a
constant currency basis. However, adjusted operating profit increased by £0.9
million to £4.1 million (2023: £3.2m) and adjusted operating profit margin
increased to 9.3% (2023: 6.8%).
Strong volume growth in Germany and consolidation of contract wins from the
previous financial year were partially offset by a slowdown in demand from the
UK. Against a competitive backdrop, private label laundry volumes grew in line
with the market, supported by a number of long-term contract wins.
Delivery of growth in adjusted operating profit for Powders was achieved
through strict cost controls and operational improvements. The division
remains focused on implementing further improvements to operational delivery
and is combining this with a focus on innovation, aligned to the specialist
strategy to ensure we meet customer needs well into the future.
Aerosols performance review
Aerosols revenue grew to £28.7 million (2023: £25.4m), a 16.2% increase on a
constant currency basis, generating adjusted operating profit of £1.6 million
(2023: £0.5m) and resulting in an adjusted operating profit margin of 5.6%
(2023: 2.0%).
The strong performance was supported by volume growth in the personal care
category, led by product cost initiatives and product innovation, with the
division gaining share across its key markets.
Capital investments to increase production capacity and flexibility,
especially in the personal care business, are underway, with the first
benefits being delivered in 2025. The division remains committed to building
on its existing strong relationships with customers, continuing to drive
operational excellence and developing products with high levels of
sustainability.
Asia Pacific performance review
Asia Pacific revenue decreased to £11.7 million (2023: £12.5m), down 7.1% on
a constant currency basis. The division delivered adjusted operating profit of
£0.7 million (2023: £0.7m) and an adjusted operating profit margin of 6.0%
(2023: 5.6%).
Despite volumes growing 8.5% due to active business development in the region
and an increase in contract manufacturing activity, revenue and margins were
impacted by adverse currency fluctuations. The division continues to focus on
driving efficiencies to best serve the needs of its customers.
Group operating results
Operating profit of £31.0 million was £1.5 million higher than the prior
year (2023: £29.5m).
Adjusted operating profit of £32.0 million was £1.5 million higher than the
prior year (2023: £30.5m), with the adjusted operating profit margin
increasing to 6.8% (2023: 6.5%).
Half-year adjusted EBITDA of £41.7 million (2023: £40.9m) reflected the
Group's continued strong trading and operational performance and focus on
margin management.
Exceptional items
No exceptional costs were incurred and recognised during the period (2023:
£4.0m). The prior year charge related primarily to the termination of the
upside sharing fee agreed on 25 October 2023.
Finance costs
At £5.3 million, adjusted finance costs((1)) were £2.8 million lower than
the prior year (2023: £8.1m), driven by decreases in overall market interest
rates and a reduction in the cost of borrowing resulting from the lower levels
of debt within the Group.
((1))Total finance costs less finance costs relating to exceptional items.
Taxation
Reported profit before taxation was £25.7 million (2023: £17.4m). Adjusted
profit before taxation was £26.7 million (2023: £22.4m). The tax charge on
adjusted profit before taxation for the period was £6.5 million (2023:
£6.0m) and the effective tax rate was 25% (2023: 27%). The reduction in the
effective tax rate was due to the overall increased profitability of the
Group, allowing the utilisation of brought forward losses, mainly in the UK,
as well as group relief of losses in the period.
The total tax charge was £6.3 million (2023: £4.7m) and the statutory
effective tax rate for the period was 25% (2023: 27%).
Earnings per share
On an adjusted basis, basic earnings per share was 11.9 pence (2023: 9.5p).
Total adjusted diluted earnings per share((1)) was 11.4 pence (2023: 9.1p),
with basic earnings per share at 11.4 pence (2023: 7.3p).
((1))See note 6.
Payments to shareholders
As announced previously, the Board's intention is to reinstate dividends at
the end of the financial year. Further details will be communicated at the
time of the final results in September 2025.
Cash flow and balance sheet
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Adjusted EBITDA 41.7 40.9 87.1
Working capital excluding provisions and pensions (1.7) 8.6 (4.6)
Share-based payments 0.8 0.6 1.6
Loss on disposal of property, plant and equipment 0.1 0.3 1.4
(Reversal of impairment)/impairment of property, plant and equipment (0.2) 0.2 0.2
Pension deficit reduction contributions (2.4) (2.0) (4.0)
Free cash flow((1)) 38.3 48.6 81.7
Exceptional items (0.3) (0.5) (1.0)
Interest on borrowings and lease liabilities less interest receivable (3.5) (6.2) (10.9)
Refinancing costs paid (1.4) (5.6) (5.5)
Taxation paid (7.1) (2.6) (5.1)
Net cash generated from operating activities 26.0 33.7 59.2
Net capital expenditure((2)) (12.0) (8.4) (19.6)
Repayment of lease liabilities (1.9) (2.1) (4.5)
Debt financing activities (9.8) (10.4) (25.9)
Settlement of derivatives 1.2 (0.4) 1.1
Free cash flow to equity((3)) 3.5 12.4 10.3
Purchase of own shares (2.4) - (2.8)
Net increase in cash and cash equivalents 1.1 12.4 7.5
Free cash flow in the period was £38.3 million (2023: £48.6m), mostly
attributable to the strong performance in adjusted EBITDA. Continued focus on
working capital cash management resulted in a broadly neutral cash flow from
changes in working capital.
Refinancing costs paid of £1.4 million (2023: £5.6m) relate to the
renegotiation of the Group's Revolving Credit Facility (RCF) during the
period. The increase in tax paid to £7.1 million (2023: £2.6m) reflects the
return to taxable profit across the tax jurisdictions in which the Group
operates.
During the period, net capital expenditure was £12.0 million (2023: £8.4m)
in cash terms. The Group continues to prioritise capital expenditure to
support divisional growth objectives and the SAP S/4HANA programme, with the
increase reflecting a return to more normal levels of capital expenditure
after a period of careful cash flow management to mitigate increases in net
debt.
The Group's net assets increased to £81.0 million (30 June 2024: £63.4m).
Gearing((4)) decreased to 60.6% (30 June 2024: 66.0%) as net debt levels
continued to fall. Adjusted return on capital employed((1)) of 34.8% was
higher than the prior year (2023: 22.8%), driven by the improvement in
profitability over the past twelve months.
((1)) Refer to note 2 for definition.
((2)) Net capital expenditure is capital expenditure less proceeds from the
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 period-end capital,
being total equity plus net debt.
Bank facilities and net debt
Net debt at 31 December 2024 was £117.6 million (2023: £145.7m).
During the period, the Group renegotiated its €175 million multi-currency,
sustainability-linked RCF, increasing the facility size to €200 million and
securing a four-year term to November 2028, with the option to extend by up to
two years. This facility ensures the Group continues to have significant
levels of liquidity headroom.
Additionally, the Group now also has access to a €75 million accordion
facility.
At 31 December 2024, liquidity((1)) was £117.6 million (30 June 2024:
£98.3m). This measure will continue to be monitored by the Group but is no
longer a covenant requirement of the RCF.
At 31 December 2024, the net debt cover ratio((1)), as defined under the RCF
funding arrangements, was 0.6x (30 June 2024: 0.8x) and the interest
cover((1)) was 8.8x (30 June 2024: 6.8x). The amount undrawn on the facility
was £107.0 million (30 June 2024: £82.9m).
At 31 December 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; in Germany and Denmark the Group had a €45 million
facility; and in France, Belgium and Spain the Group had an unlimited
facility. All such facilities are 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 2 for definition.
Pensions
In the UK, the Group operates a defined benefit pension scheme, which is
closed to new members and 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 31 December 2024, the Group recognised a deficit in the scheme of £25.9
million (30 June 2024: £27.5m). The decrease in deficit is due to deficit
reduction contributions, an increase in discount rate placing a lower value on
the liabilities and lower-than-expected inflation. These were offset to some
extent by interest on the deficit and a decrease in asset values due to
liability-matching assets that the Fund invests in.
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
£30.0 million and £35.0 million, 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 have been paid each month
from 1 October 2024, with total additional payments for the year ending 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 ongoing 31 March
2024 valuation, which has a statutory deadline for signing of 30 June 2025.
Discussions are currently ongoing.
As detailed in note 22 (page 165) of McBride plc's Annual Report and Accounts
2024, the NTL vs Virgin Media case 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 as
at 31 December 2024. The Company is therefore disclosing this issue as a
potential contingent liability at 31 December 2024 and will review again in
conjunction with the 2025 year end, based on the findings of the detailed
investigation.
The Group had other post-employment benefit obligations outside the UK that
amounted to £1.9 million (30 June 2024: £1.9m).
Sustainability
A commitment to sustainability that is relevant and aligned with the needs of
stakeholders and wider society is core to the Group's strategy and corporate
proposition.
McBride's dedicated sustainability team continues to drive environmental
impact reduction, with highlights in the first half including improvements in
energy efficiency, increasing the use of PCR in PET from 66.0% to 68.4%,
engaging with suppliers to understand their carbon maturity and emission
reduction plans and facilitating internal training in carbon literacy.
Research and development teams continue to work to ensure that each new
product launched is less carbon intense than the one it replaces.
As a listed company, McBride operates strong levels of governance and
continues to engage with its workforce and local communities. The Employee
Voice engagement surveys, introduced in December 2023, provide ongoing
insights into employee experience and a greater understanding of how
improvements can be made. McBride remains committed to recruiting, developing
and rewarding colleagues based on performance and role, regardless of
identity, background or circumstance.
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.
Responsibility statement
The Directors confirm that to the best of their knowledge:
• The condensed set of financial statements has been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting' and gives a
true and fair view of the assets, liabilities, financial position and profit
or loss of the issuer, or the undertakings included in the consolidation as a
whole as required by DTR 4.2.4 of the Disclosure and Transparency Rules.
• The interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7 of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8 of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any material
changes in the related party transactions described in the last annual report
that could do so.
Chris
Smith
Mark Strickland
Chief Executive
Officer
Chief Financial Officer
25 February 2025
Condensed Interim Consolidated Income Statement
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
Note £m £m £m
Revenue 3 471.4 468.0 934.8
Cost of sales (297.1) (297.1) (586.9)
Gross profit 174.3 170.9 347.9
Distribution costs (44.1) (40.8) (81.3)
Administrative costs (98.0) (96.5) (199.1)
Impairment of trade receivables (1.3) (3.6) (1.6)
Loss on disposal of property, plant and equipment (0.1) (0.3) (1.4)
Reversal of impairment/(impairment) of property, plant and equipment 0.2 (0.2) (0.2)
Operating profit 31.0 29.5 64.3
Finance costs (5.3) (12.1) (17.8)
Profit before taxation 25.7 17.4 46.5
Taxation 5 (6.3) (4.7) (13.2)
Profit for the period 19.4 12.7 33.3
Earnings per ordinary share attributable to the owners of the parent during
the period
Basic earnings per share 6 11.4p 7.3p 19.3p
Diluted earnings per share 6 10.9p 7.0p 18.8p
Condensed Interim Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Profit for the period 19.4 12.7 33.3
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Currency translation differences of foreign subsidiaries (0.4) 1.0 0.1
Gain/(loss) on net investment hedges 1.3 (0.6) 0.8
Loss on cash flow hedges in the period (0.8) (1.5) (1.3)
Cash flow hedges transferred to profit or loss (0.5) (0.8) (1.6)
Taxation relating to the items above 0.3 0.6 (0.6)
(0.1) (1.3) (2.6)
Items that will not be reclassified to profit or loss:
Net actuarial loss on post-employment benefits (0.2) (7.3) (5.6)
Taxation relating to item above 0.1 1.8 1.3
(0.1) (5.5) (4.3)
Total other comprehensive expense (0.2) (6.8) (6.9)
Total comprehensive income 19.2 5.9 26.4
Condensed interim consolidated balance sheet
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
Note £m £m £m
Non-current assets
Goodwill 8 19.7 19.8 19.7
Other intangible assets 8 12.1 6.1 9.8
Property, plant and equipment 8 110.7 115.8 114.4
Derivative financial instruments 9 0.6 1.6 1.7
Right-of-use assets 8 7.2 8.7 8.1
Deferred tax assets 42.4 45.3 42.8
192.7 197.3 196.5
Current assets
Inventories 115.2 109.4 119.6
Trade and other receivables 137.1 147.7 148.8
Current tax assets 2.1 2.0 2.1
Derivative financial instruments 9 0.1 0.8 0.3
Cash and cash equivalents 10 10.6 14.3 9.3
265.1 274.2 280.1
Total assets 457.8 471.5 476.6
Current liabilities
Trade and other payables 200.1 215.5 220.1
Borrowings 9 62.3 63.2 67.4
Lease liabilities 9 3.3 3.3 3.1
Derivative financial instruments 9 0.3 0.1 0.4
Current tax liabilities 11.7 10.3 12.9
Provisions 1.9 2.2 2.2
279.6 294.6 306.1
Non-current liabilities
Borrowings 9 58.3 87.6 65.0
Lease liabilities 9 4.3 5.9 5.3
Pensions and other post-employment benefits 11 27.8 32.6 29.4
Provisions 1.4 2.6 1.4
Deferred tax liabilities 5.4 4.6 6.0
97.2 133.3 107.1
Total liabilities 376.8 427.9 413.2
Net assets 81.0 43.6 63.4
Equity
Issued share capital 17.4 17.4 17.4
Share premium account 68.6 68.6 68.6
Other reserves 76.2 77.6 76.3
Accumulated losses (81.2) (120.0) (98.9)
Total equity 81.0 43.6 63.4
Condensed Interim Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
Note £m £m £m
Operating activities
Profit before taxation 25.7 17.4 46.5
Finance costs 5.3 12.1 17.8
Exceptional items excluding finance costs 4 - - 0.8
Share-based payments charge 0.8 0.6 1.6
Depreciation of property, plant and equipment 8 7.8 8.6 16.3
Depreciation of right-of-use assets 8 1.9 1.8 3.7
Loss on disposal of property, plant and equipment 0.1 0.3 1.4
Amortisation of intangible assets 8 1.0 1.0 2.0
(Reversal of impairment)/impairment of property, plant and equipment (0.2) 0.2 0.2
Operating cash flow before changes in working capital and exceptional items 42.4 42.0 90.3
Decrease/(increase) in receivables 9.0 (0.6) (5.2)
Decrease in inventories 2.6 13.5 0.6
Decrease in payables (13.3) (4.3) -
Operating cash flow after changes in working capital before exceptional items 40.7 50.6 85.7
Additional cash funding of pension schemes (2.4) (2.0) (4.0)
Cash generated from operations before exceptional items 38.3 48.6 81.7
Cash outflow in respect of exceptional items (0.3) (0.5) (1.0)
Cash generated from operations 38.0 48.1 80.7
Interest paid (3.5) (6.2) (10.9)
Refinancing costs paid (1.4) (5.6) (5.5)
Taxation paid (7.1) (2.6) (5.1)
Net cash generated from operating activities 26.0 33.7 59.2
Investing activities
Purchase of property, plant and equipment (8.7) (7.8) (14.3)
Purchase of intangible assets (3.3) (0.6) (5.3)
Settlement of derivatives used in net investment hedges 1.2 (0.4) 1.1
Net cash used in investing activities (10.8) (8.8) (18.5)
Financing activities
(Repayment)/drawdown of overdrafts 10 (11.8) 9.9 11.2
Drawdown of other loans 10 7.7 3.0 7.4
Repayment of bank loans 10 (64.0) (23.3) (44.5)
Drawdown of bank loans 10 58.3 - -
Repayment of IFRS 16 lease obligations 10 (1.9) (2.1) (4.5)
Purchase of own shares (2.4) - (2.8)
Net cash used in financing activities (14.1) (12.5) (33.2)
Increase in net cash and cash equivalents 1.1 12.4 7.5
Net cash and cash equivalents at the start of the period 9.3 1.6 1.6
Currency translation differences 0.2 0.3 0.2
Net cash and cash equivalents at the end of the period 10.6 14.3 9.3
Condensed Interim Consolidated Statement of Changes in Equity
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 2024 17.4 68.6 0.2 (1.1) 77.2 (98.9) 63.4
Profit for the period - - - - - 19.4 19.4
Other comprehensive income/(expense)
Items that may be reclassified
to profit or loss:
Currency translation differences
of foreign subsidiaries - - - (0.4) - - (0.4)
Gain on net investment hedges - - - 1.3 - - 1.3
Loss on cash flow hedges in the period - - (0.8) - - - (0.8)
Cash flow hedges transferred to profit or loss
- - (0.5) - - - (0.5)
Taxation relating to the items above - - 0.3 - - - 0.3
- - (1.0) 0.9 - - (0.1)
Items that will not be reclassified
to profit or loss:
Net actuarial loss on
post‑employment benefits - - - - - (0.2) (0.2)
Taxation relating to item above - - - - - 0.1 0.1
- - - - - (0.1) (0.1)
Total other comprehensive (expense)/income
- - (1.0) 0.9 - (0.1) (0.2)
Total comprehensive (expense)/income - - (1.0) 0.9 - 19.3 19.2
Transactions with owners of the parent
Purchase of own shares - - - - - (2.4) (2.4)
Share-based payments - - - - - 0.8 0.8
At 31 December 2024 (unaudited) 17.4 68.6 (0.8) (0.2) 77.2 (81.2) 81.0
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 period - - - - - 12.7 12.7
Other comprehensive income/(expense)
Items that may be reclassified
to profit or loss:
Currency translation differences
of foreign subsidiaries - - - 1.0 - - 1.0
Loss on net investment hedges - - - (0.6) - - (0.6)
Loss on cash flow hedges in the period - - (1.5) - - - (1.5)
Cash flow hedges transferred to profit or loss
- - (0.8) - - - (0.8)
Taxation relating to the items above - - 0.6 - - - 0.6
- - (1.7) 0.4 - - (1.3)
Items that will not be reclassified
to profit or loss:
Net actuarial loss on
post‑employment benefits - - - - - (7.3) (7.3)
Taxation relating to item above - - - - - 1.8 1.8
- - - - - (5.5) (5.5)
Total other comprehensive (expense)/income
- - (1.7) 0.4 - (5.5) (6.8)
Total comprehensive (expense)/income - - (1.7) 0.4 - 7.2 5.9
Transactions with owners of the parent
Share-based payments - - - - - 0.6 0.6
At 31 December 2023 (unaudited) 17.4 68.6 2.0 (1.6) 77.2 (120.0) 43.6
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 (audited) 17.4 68.6 0.2 (1.1) 77.2 (98.9) 63.4
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 interim financial information for the six months period ended 31 December
2024 has been prepared on the basis of the accounting policies set out in the
2024 Annual Report and Accounts and in accordance with UK-adopted IAS 34
'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the UK's Financial Conduct Authority.
This interim financial information should be read in conjunction with the
annual consolidated financial statements for the year ended 30 June 2024,
which were prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006. The financial
statements have been prepared under the historical cost convention, modified
in respect of financial assets and liabilities (derivative financial
instruments) at fair value through profit or loss, assets held for sale and
defined benefit pension scheme assets.
The results for each half year are unaudited and do not represent the Group's
statutory accounts within the meaning of section 434 of the Companies Act
2006. The interim financial information has not been reviewed or audited. The
Group's statutory accounts were approved by the Directors on 16 September 2024
and have been reported on by PricewaterhouseCoopers LLP and delivered to the
Registrar of Companies. The report of PricewaterhouseCoopers LLP was (i)
unqualified and (ii) did not contain a statement under section 498 of the
Companies Act 2006.
Going concern
In determining the appropriate basis of preparation of the financial
statements for the six months to 31 December 2024, the Directors are required
to consider whether the Group can continue in operational existence for the
foreseeable future.
The Group meets its funding requirements through internal cash generation and
bank credit facilities. The Group has access to a €200 million
multi-currency RCF, with covenants in respect of debt cover and interest
cover. The Group also has facilities whereby it can borrow against certain of
its trade receivables. At 31 December 2024, liquidity, as detailed in note 16,
amounted to £117.6 million.
In assessing the going concern assumptions, the Board has reviewed the Group's
base case scenario and considered severe but plausible downside scenarios.
The Group's base case scenario to 30 June 2026 assumes:
· revenue growth driven predominantly by volume increases resulting from
net contract wins;
· interest rates remaining unchanged from current levels; and
· Sterling: Euro exchange rate of £1:€1.15.
The Directors have considered severe but plausible downside scenarios to
stress test the Group's financial forecasts, with the following assumptions:
· no year-on-year revenue growth for the remainder of 2025;
· revenue growth in 2026 reducing to 1%, being half of the Group's
long-term target;
· interest rates increasing by 100 basis points; and
· Sterling appreciating significantly against the Euro to £1:€1.30.
If such a severe but plausible downside risk scenario were to occur, the Group
would remain within low-risk levels of liquidity and be compliant with current
banking covenants.
After reviewing the current liquidity position, financial forecasts, stress
testing of 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.
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 2024.
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 period Adjusted profit for the period 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 for the period Note 6
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 rolling twelve months total adjusted operating Consolidated Income Statement
profit divided by the average period-end capital employed. Capital employed is
defined as the total of goodwill and other intangible assets, property, plant Consolidated Balance Sheet
and equipment, right-of-use assets, inventories and 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 16
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.
Net debt cover ratio (banking basis) The net debt cover ratio (banking basis) is an indicator of the Company's Note 16
ability to repay its debts.
Interest cover ratio (banking basis) The interest cover ratio (banking basis) is a measure of the Company's ability Note 16
to pay the interest on its outstanding debts.
The APMs used 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. It is used for internal performance analysis and
assessment of 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 16 '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 and include costs of certain
Group functions (mostly associated with financial disciplines such as
treasury). Corporate costs include the costs associated with the Board and the
Executive Leadership Team, governance and being a listed company. 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
Period ended 31 December 2024 (unaudited) £m £m £m £m £m £m £m
Segment revenue 268.9 118.1 44.0 28.7 11.7 - 471.4
Adjusted operating profit/(loss) 19.4 10.7 4.1 1.6 0.7 (4.5) 32.0
Amortisation of intangible assets (1.0)
Operating profit 31.0
Finance costs (5.3)
Profit before taxation 25.7
Inventories 59.1 29.9 13.1 10.2 2.9 - 115.2
Capital expenditure 4.0 3.8 0.6 0.9 - - 9.3
Amortisation and depreciation 6.0 3.1 0.6 0.3 0.7 - 10.7
Liquids Unit Dosing Powders Aerosols Asia Pacific Corporate Group
Period ended 31 December 2023 (unaudited) £m £m £m £m £m £m £m
Segment revenue 266.4 116.5 47.2 25.4 12.5 - 468.0
Adjusted operating profit/(loss) 22.8 7.9 3.2 0.5 0.7 (4.6) 30.5
Amortisation of intangible assets (1.0)
Operating profit 29.5
Finance costs (12.1)
Profit before taxation 17.4
Inventories 60.1 24.7 13.3 8.9 2.4 - 109.4
Capital expenditure 2.5 3.1 0.5 0.1 - - 6.2
Amortisation and depreciation 6.7 3.0 0.7 0.3 0.7 - 11.4
Liquids Unit Dosing Powders Aerosols Asia Pacific Corporate Group
Year ended 30 June 2024 (audited) £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 (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
4. Exceptional items
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Environmental remediation - - 0.8
Total charged to operating profit - - 0.8
Group refinancing:
Independent business review and refinancing costs - 4.0 3.8
Total charged to finance costs - 4.0 3.8
Total exceptional items before tax - 4.0 4.6
No exceptional costs were incurred and recognised during the period (2023:
£4.0m). The prior year and prior year end charge primarily relate to the
termination of the upside sharing fee agreed on 25 October 2023.
5. Taxation
Reported profit before taxation was £25.7 million (2023: £17.4m). Adjusted
profit before taxation was £26.7 million (2023: £22.4m).
The tax charge on adjusted profit before taxation for the period was £6.5
million (2023: £6.0m) and the effective tax rate was 25% (2023: 27%).
The Group forecasts an adjusted effective tax rate for the full year of 27%,
before discrete items, which is higher than the UK corporation tax rate of 25%
due to non-UK tax rates, non-deductible items and local taxes payable.
6. Earnings per ordinary share
Basic earnings per ordinary share is calculated by dividing the profit for the
period attributable to owners of the Company by the weighted average number of
the Company's ordinary shares in issue during the financial period.
The weighted average number of the Company's ordinary shares in issue
excludes 4,207,173 shares (2023: 501,172 shares), being the weighted average
number of own shares held during the year in relation to employee share
schemes.
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
Reference 2024 2023 2024
Weighted average number of ordinary shares in issue (million) a 169.8 173.6 172.7
Effect of dilutive share options (million) 7.9 7.1 4.2
Weighted average number of ordinary shares for calculating
diluted earnings per share (million) b 177.7 180.7 176.9
Diluted earnings 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 period, 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 for the
period attributable to owners of the Company before adjusting items as
follows:
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
Reference £m £m £m
Profit for calculating basic and diluted earnings per share c 19.4 12.7 33.3
Adjusted for:
Amortisation of intangible assets (note 8) 1.0 1.0 2.0
Exceptional items (note 4) - 4.0 4.6
Taxation relating to the above items (0.2) (1.3) (1.6)
Profit for calculating adjusted earnings per share d 20.2 16.4 38.3
( )
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
Reference pence pence pence
Basic earnings per share c/a 11.4 7.3 19.3
Diluted earnings per share c/b 10.9 7.0 18.8
Adjusted basic earnings per share d/a 11.9 9.5 22.2
Adjusted diluted earnings per share d/b 11.4 9.1 21.7
7. 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.
No payments to ordinary shareholders were made or proposed in respect of this
period or the prior year. As announced previously, the Board's intention is to
reinstate dividends at the end of the financial year. Further details will be
communicated at the time of the final results in September 2025.
B Shares issued but not redeemed are classified as current liabilities.
Nominal
Number value
000 £m
At 31 December 2023 (unaudited), 30 June 2024 (audited) and 31 December 2024 665,888 0.7
(unaudited)
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.
8. 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 2024 (audited) 29.5 114.4 8.1
Currency translation differences - (2.0) 0.1
Additions 3.3 6.0 0.9
Disposal of assets - (0.1) -
Reversal of impairment - 0.2 -
Depreciation charge - (7.8) (1.9)
Amortisation charge (1.0) - -
Net book value at 31 December 2024 (unaudited) 31.8 110.7 7.2
Included within goodwill and other intangible assets is goodwill of £19.7
million (30 June 2024: £19.7m), computer software of £4.7 million (30 June
2024: £5.0m) and customer relationships of £nil (30 June 2024: £0.2m).
Capital commitments as at 31 December 2024 amounted to £2.2 million (30 June
2024: £5.7m). At 31 December 2024, the Group was committed to future minimum
lease payments of £1.4 million (30 June 2024: £0.3m) in respect of leases
which have not yet commenced and for which no lease liability has been
recognised.
9. 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.
The condensed interim financial information does not include all financial
risk management information and disclosures required in the annual financial
statements and they should be read in conjunction with the Group's Annual
Report and Accounts 2024. There have been no material changes in the risk
management policies since the year end.
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);
and
• Level 3 - inputs that are not based on observable market data
(unobservable inputs).
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Level 2 assets
Derivative financial instruments
Forward currency contracts 0.1 - -
Interest rate caps 0.6 2.4 2.0
Total financial assets 0.7 2.4 2.0
Level 2 liabilities
Derivative financial instruments
Forward currency contracts (0.3) (0.1) (0.4)
Total financial liabilities (0.3) (0.1) (0.4)
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.
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:
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Current 65.6 66.5 70.5
Non-current 62.6 93.5 70.3
Total borrowings 128.2 160.0 140.8
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.
10. Net debt
Movements in net debt were as follows:
IFRS 16 Currency Unaudited
At 1 Jul non-cash Cash translation At 31 Dec
2024 movements((1)) flows differences 2024
£m £m £m £m £m
Overdrafts (11.8) - 11.8 - -
Bank loans (65.0) - 5.7 1.0 (58.3)
Other loans (55.6) - (7.7) 1.0 (62.3)
Lease liabilities (8.4) (1.1) 1.9 - (7.6)
Financial liabilities (140.8) (1.1) 11.7 2.0 (128.2)
Cash and cash equivalents 9.3 - 1.1 0.2 10.6
Net debt (131.5) (1.1) 12.8 2.2 (117.6)
((1))IFRS 16 non-cash movements includes additions (£0.9 million) and
interest charged (£0.2 million).
11. 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 31 December 2024, the Group recognised a deficit on its UK defined benefit
pension scheme of £25.9 million (30 June 2024: £27.5m). The Group's
post-employment benefit obligations outside the UK amounted to £1.9 million
(30 June 2024: £1.9m).
Non-governmental collected post-employment benefits had the following effect
on the Group's results and financial position:
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Profit or loss
Service cost and administrative expenses (net of employee contributions) (0.2) (0.4) (0.6)
Net charge to operating profit (0.2) (0.4) (0.6)
Net interest cost on defined benefit obligation (0.6) (0.6) (1.2)
Net charge to profit before taxation (0.8) (1.0) (1.8)
Other comprehensive expense
Net actuarial loss (0.2) (7.3) (5.6)
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Balance sheet
Defined benefit obligations
UK - funded (98.1) (107.6) (101.6)
Other - unfunded (12.0) (12.5) (12.0)
(110.1) (120.1) (113.6)
Fair value of scheme assets
UK - funded 72.2 77.0 74.1
Other - unfunded 10.1 10.5 10.1
Deficit on the schemes (27.8) (32.6) (29.4)
For accounting purposes, the UK scheme's benefit obligation as at 31 December
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'.
12. Share capital
Allotted and fully paid
Number £m
Ordinary shares of 10 pence each
At 31 December 2023 (unaudited), 30 June 2024 (audited) and 31 December 2024 174,057,328 17.4
(unaudited)
Ordinary shares carry full voting rights and ordinary shareholders are
entitled to attend Company meetings and to receive payments to shareholders.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties of the Company, are eliminated on consolidation and, therefore, are
not required to be disclosed in these financial statements.
Key management compensation and transactions with the Group's pension and
post-employment schemes for the financial year ended 30 June 2024 are detailed
in note 27 (page 170) of McBride plc's Annual Report and Accounts 2024. A copy
of McBride plc's Annual Report and Accounts 2024 is available on McBride's
website at www.mcbride.co.uk (www.mcbride.co.uk) .
14. 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:
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
Average rate:
Euro 1.19 1.16 1.16
US Dollar 1.29 1.25 1.26
Polish Zloty 5.12 5.17 5.11
Danish Krone 8.89 8.64 8.68
Malaysian Ringgit 5.72 5.84 5.91
Australian Dollar 1.95 1.92 1.92
Closing rate:
Euro 1.21 1.15 1.18
US Dollar 1.25 1.27 1.26
Polish Zloty 5.16 4.99 5.09
Danish Krone 8.99 8.58 8.81
Malaysian Ringgit 5.60 5.84 5.97
Australian Dollar 2.02 1.87 1.90
15. 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: Adjusted EBITDA, as defined in note 16, divided
by revenue.
· Free cash flow increase: Free cash flow is defined as cash generated
before exceptional items.
· Adjusted ROCE: Rolling twelve months total adjusted operating profit
divided by the average period-end 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.
16. 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:
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Operating profit 31.0 29.5 64.3
Exceptional items in operating profit (note 4) - - 0.8
Amortisation of intangibles (note 8) 1.0 1.0 2.0
Adjusted operating profit 32.0 30.5 67.1
Depreciation of property, plant and equipment (note 8) 7.8 8.6 16.3
Depreciation of right-of-use assets (note 8) 1.9 1.8 3.7
Adjusted EBITDA 41.7 40.9 87.1
Adjusted profit before tax and adjusted profit for the period
Adjusted profit before tax is based on adjusted operating profit less adjusted
finance costs. Adjusted profit for the period 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 before
tax.
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
Profit before tax 25.7 17.4 46.5
Exceptional items (note 4) - 4.0 4.6
Amortisation of intangibles (note 8) 1.0 1.0 2.0
Adjusted profit before tax 26.7 22.4 53.1
Taxation (6.5) (6.0) (14.8)
Adjusted profit for the period 20.2 16.4 38.3
Adjusted earnings per share
Adjusted earnings per share is based on the Group's profit for the period,
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 key performance indicators 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:
Unaudited Unaudited Audited
Half year to Half year to Year ended
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Net cash generated from operating activities 26.0 33.7 59.2
Add back:
Taxation paid 7.1 2.6 5.1
Interest paid 3.5 6.2 10.9
Refinancing costs paid 1.4 5.6 3.8
Cash outflow in respect of exceptional items 0.3 0.5 2.7
Free cash flow 38.3 48.6 81.7
Adjusted EBITDA 41.7 40.9 87.1
Cash conversion % 92% 119% 94%
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 rolling twelve months total adjusted operating profit divided by
the average period-end 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. There is no equivalent statutory measure within IFRS.
Adjusted ROCE is calculated as follows:
Unaudited Unaudited Unaudited Audited
As at As at As at As at
31 Dec 31 Dec 31 Dec 30 Jun
2024 2023 2022 2024
£m £m £m £m
Goodwill (note 8) 19.7 19.8 19.8 19.7
Other intangible assets (note 8) 12.1 6.1 6.5 9.8
Property, plant and equipment (note 8) 110.7 115.8 121.1 114.4
Right-of-use assets (note 8) 7.2 8.7 9.9 8.1
Inventories 115.2 109.4 128.2 119.6
Trade and other receivables 137.1 147.7 131.1 148.8
Trade and other payables (200.1) (215.5) (211.9) (220.1)
Capital employed 201.9 192.0 204.7 200.3
Average period-end capital employed 197.0 198.4 199.8 200.2
Rolling twelve months' adjusted operating profit/(loss) 68.6 45.3 (11.0) 67.1
Adjusted return on capital employed % 34.8% 22.8% (5.5)% 33.5%
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.
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Cash and cash equivalents 10.6 14.3 9.3
RCF headroom 107.0 64.2 82.9
Other committed facilities headroom - 6.5 -
Uncommitted facilities - - 6.1
Liquidity 117.6 85.0 98.3
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:
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Current assets
Cash and cash equivalents 10.6 14.3 9.3
Current liabilities
Borrowings (note 9) (62.3) (63.2) (67.4)
Lease liabilities (3.3) (3.3) (3.1)
(65.6) (66.5) (70.5)
Non-current liabilities
Borrowings (note 9) (58.3) (87.6) (65.0)
Lease liabilities (4.3) (5.9) (5.3)
(62.6) (93.5) (70.3)
Net debt (117.6) (145.7) (131.5)
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.
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Net debt (as defined above) (117.6) (145.7) (131.5)
Invoice discounting facilities 62.3 52.2 55.6
B Shares (note 7) (0.7) (0.7) (0.7)
Lease liabilities 7.6 9.2 8.4
Adjustment for average exchange rates (0.3) 0.5 (0.9)
Net debt banking basis (as defined in the RCF agreement) (48.7) (84.5) (69.1)
Rolling twelve months adjusted EBITDA 87.9 66.2 87.1
Rolling twelve months net interest cost on defined benefit obligation (1.2) (0.8) (1.2)
Rolling twelve months loss on disposal of property, plant and equipment 1.2 0.6 1.4
Rolling twelve months lease payments N/A 4.1 4.5
Rolling twelve months EBITDA banking basis (as defined in the RCF agreement) 87.9 70.1 91.8
Net debt cover ratio (banking basis) 0.6x 1.2x 0.8x
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.
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2024 2023 2024
£m £m £m
Rolling twelve months EBITDA banking basis (as defined in the RCF agreement) 87.9 70.1 91.8
Rolling twelve months lease payments N/A (4.1) (4.5)
Rolling twelve months EBITDA banking basis (as defined in the RCF agreement) 87.9 66.0 87.3
Rolling twelve months adjusted finance costs excluding net interest cost on 10.0 13.9 12.8
defined benefit obligation
Interest cover ratio (banking basis) 8.8x 4.7x 6.8x
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