McBride Plc – Half-Year Report ended Dec 2021

McBride plc (“McBride”, the “Company” or the “Group”)

Significant price increases now being delivered following rapid and massive input cost inflation

22 February 2022

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 2021.

Headlines

Business

• Exceptional input cost inflation continued to build across the period, driven by Covid-19 shocks to the global supply chain and rapid and exceptional inflation of key feedstocks
• Early price actions now being supplemented with ongoing price discussions
• 'Programme Compass' cost savings are on track, £10m expected in current financial year
• Covid-19 continues to impact demand e.g. laundry volumes remain lower compared to historic levels
• First half revenues at constant currency down 6.6%, with all divisions posting declines compared to Covid-19 affected previous yea
• Good progress being made towards achieving our 2025 product sustainability targets and defining our wider environmental, social and governance approach

Financial

• Group revenues of £323.4m (2020: £362.9m), 10.9% lower (6.6% lower at constant currency)
• Adjusted operating loss⁽²⁾ from continuing operations of £14.8m (2020: £19.0m profit)
• Operating loss from continuing operations of £14.7m (2020: £15.6m profit)
• Adjusted loss before tax from continuing operations of £16.9m (2020: £16.9m profit)
• Loss before tax from continuing operations of £16.8m (2020: £13.5m profit)
• Adjusted diluted EPS⁽³⁾ from continuing operations (8.1)p (2020: 7.1p)
• Diluted EPS from continuing operations (8.0)p (2020: 5.4p)
• Dividends: £nil (2020: £nil)
• Net debt⁽⁴⁾ at £124.9m (30 June 2021: £118.4m)
• Net debt/adjusted EBITDA⁽⁶⁾ 10.5x accounting basis (30 June 2021: 2.6x); 4.3x banking covenant basis (30 June 2021: 1.5x). Banking group waived the December 2021 covenant tests.

Chris Smith, Chief Executive Officer, commented:

“The Group is experiencing the most extreme inflationary cost environment probably ever to hit this sector.  As we progress through the first part of 2022 it is encouraging that we expect the final quarter of our financial year to see our pricing actions getting closer to maturity and the business returning to close to break-even at an EBITA level and cash-flow neutral.

The outlook is of course heavily dependent on our actions to deliver the outstanding essential price increases currently in discussion with our customers, as well as other external  factors such as the development of input costs and other inflationary pressures, and continuing supply chain disruptions.

The Group's core activities remain strong and the dedication of the entire McBride team to resolve the challenges confronting us is a strong demonstration of our values and the commitment to return the Group to profitability.”

The results presentation will be available on the McBride plc investor relations website from 1.00pm today.