McBride sees signs of stronger demand, but warns of price rises

(Sharecast News) - McBride said on Tuesday that trading at the start of its new financial year was in line with expectations, with early signs of stronger demand in some markets, although continued input-cost volatility could require further price increases.

The household cleaning products manufacturer said sales volumes during July and August were in line with internal forecasts, with some evidence of increased demand that could reflect inflationary pressure driving consumers towards private-label products.

However, McBride said the outlook for raw-material, packaging and fuel costs remained difficult to predict amid geopolitical tensions in the Middle East and Eastern Europe.

Pricing changes had been agreed with all customers, but further increases were "increasingly likely", with margins expected to recover during the second quarter, subject to input-cost developments.

For the year ended 30 June, revenue rose 0.8% to £934.2m, although adjusted operating profit fell 7.1% to £59.0m, reflecting a lag in recovering sharply higher costs following disruption in the Middle East.

Chief executive Chris Smith said: "We expect further input cost uncertainty as we start the new financial year, and we continue to monitor and be ready to respond to possible further rises."

McBride added that integration of its recently acquired Eurotab business had started well, while work was already underway on its new long-term manufacturing partnership with Vestacy.

The stock was up 1.6% at 195p by 1152 BST.

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