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McBride first-half profit falls after revenue drop

Thu 20 February 2020 10:25 | A A A

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(Sharecast News) - McBride's first-half profit fell heavily as the maker of own-label household products suffered a sharp drop in revenue at the end of the period.

Adjusted pretax profit fell 33% to £9.7m in the six months to the end of December as revenue fell 5.1% to £350.4m. Reported pretax profit halved to £6.6m.

The company said it suffered a marked revenue slowdown in the last two months of the period, especially in the UK and Germany and eastern Europe. McBride shares fell 4.1% to 63.3p at 10:50 GMT.

UK household revenue fell 12.9% in the second quarter because of lost contracts, lower retail footfall and promotions by branded goods that compete with McBride's own-label products. In Germany and eastern Europe household revenue rose 9.8% in the first quarter but then slumped 5.9% in the second because of contract losses.

Household revenue in France fell 6.8% in the first half to £59.4m as brands stepped up promotions and customers rejected price increases. Group administrative expenses rose to £80.8m from £77.4m as sales costs fell to £232m from £248m.

McBride makes own-brand household cleaning products for retailers such as Sainsbury's and Tesco. It also has a handful of its own brands including Oven Pride and Planet Clean. The company has issued two profit warnings in the past year and recruited Ludwig de Mot as chief executive in November from miner Arcelor Mittal.

De Mot said: "Our third quarter revenue run rates are as expected. Our revenue outlook remains in line with our expectations despite our markets remaining challenging. Material costs are tracking consistently with the first half year. The board's expectations for the full year remain in line with our January trading update. "

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