23rd Dec 2021 20:22
(Alliance News) - Shares in McBride PLC extended gains on Thursday after its banking partners waived December 2021 covenant tests.
The stock rose 5.9% to 61.00 pence on Thursday, after advancing 4.7% on Wednesday. However, the stock remains 26% lower since the start of 2021.
The Manchester-based cleaning and hygiene product manufacturer on Wednesday said as part of the pact, it has agreed to maintain liquidity of at least GBP40 million, noting it holds a "strong" liquidity position as of mid-December of about GBP80 million.
Peel Hunt retained its Add rating in the wake of the news, believing McBride's challenges should subside soon.
"This has been a very difficult period for the company, with escalating cost increases now reaching GBP130m. Hopefully, we are nearing peak cost increase and the company is able to complete its pricing negotiations successfully," said Peel Hunt.
The covenant waiver news helped to perk up the stock after McBride last week said it expects an adjusted loss before interest, tax and amortisation of between GBP14 million and GBP17 million for the six months to the end of December, due to rising input costs and the timing of pricing agreements, as well as delays with some customers.
For the first half of its previous financial year, McBride posted an adjusted pretax profit of GBP16.9 million.
By Lucy Heming; [email protected]
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