21st Feb 2019 09:43
LONDON (Alliance News) - McBride PLC held its interim dividend Thursday after first half profit flatlined on rising costs, despite strong growth in revenue.
The white label household products maker also said that rising costs will lead to lower year-on-year profit.
For the six months ended December 31, pretax profit rose modestly to GBP13.3 million from GBP13.2 million the year prior. This was after revenue rose 11% to GBP369.2 million from GBP334.1 million the year before.
Profit performance was held back by a rise in costs during the period. Cost of sales rose faster than revenue at 13% to GBP248.2 million from GBP219.4 million the year prior, similarly distribution costs rose 24% to GBP28.0 million from GBP22.6 million the year before.
McBride Chief Executive Officer Rik De Vos explained the firm continued to face "pressure on its cost base."
"We continue to expect the overall raw material pricing outlook to show improvements in the second half, but not to the extent anticipated in early January," De Vos added. "In addition, distribution costs continue to rise beyond our previous estimates due to market rates and efficiency challenges driven by logistics capacity shortfalls and internal service gaps."
"Accordingly, although the group continues to anticipate further good sales growth in the second half year, the board now expects full year adjusted profits before tax to be approximately 10% to 15% lower than the prior financial year," De Vos explained.
For the year ended June 2018, the firm generated GBP33.2 million in adjusted pretax profit on revenue of GBP689.8 million. Reported pretax profit stood at GBP26.5 million.
"The group made significant strategic progress in the period, delivering strong growth in revenues whilst completing the European PC Liquids sale and the integration of Danlind onto the McBride IT systems," De Vos added. "In order to seek to mitigate the effect of rising costs, the business has been implementing price increases and continues with further supply chain efficiency measures and overhead rationalisation actions to counter continuing cost inflation."
McBride proposed a 1.5 pence per share interim dividend, unchanged on the year prior.
"Given McBride's market leadership, sound financial position and continued growth prospects, the group remains well placed in the current difficult trading environment to make further progress against its strategic ambitions", De Vos added.
Shares in McBride were 1.4% higher at 88.00 pence on Thursday.
Related Shares:
Mcbride