McBride’s share price leaps as turnaround plan boosts profits
Europe’s leading manufacturer of own-brand household and personal care goods McBride cheered investors after reporting a better-than-expected jump in profits, sending shares soaring by 10.2 per cent.
The company, which supplies supermarkets with household goods such as washing liquid and dishwasher tablets, posted a 56.3 per cent jump in adjusted pre-tax profits for the six months to 31 December as a turnaround of its UK business paid off.
Group revenues rose 0.4 per cent on a constant currency basis but reported revenues fell 5.6 per cent due to the weaker Euro.
Sales in its household good division rose by 0.9 per cent, with growth across most regions except in the UK, where sales slumped 8.2 per cent due to lower private label sales.
Germany and Spain experienced good growth, while France also performed well, the company said.
McBride has suffered as a result of the fierce supermarket price wars, which has driving prices of own-branded products lower and sparked greater competition with branded goods suppliers.
In September, the company launched a five-year plan to cut costs and simplify its operations in a bid to boost returns. This includes an overhaul of its UK business, which McBride said is on track to deliver annualised savings of £12m by 30 June 2016.
Chief executive Rik De Vos said that although second half sales will be lower as a result of its restructuring efforts, it expects profits to improve.
“As a consequence, the board is now expecting full year results to be modestly ahead of its previous expectations,” he said.