29th Sep 2022 14:43
(Alliance News) - McBride PLC on Thursday reported a swing to an annual loss as revenue fell and sale costs widened amid "rampant and significant cost inflation".
McBride shares rose 12% to 26.50 pence each in London on Thursday afternoon.
The Manchester-based manufacturing company posted a pretax loss in the year that ended June 30 at GBP35.3 million compared to a profit of GBP11.3 million a year prior. Revenue fell slightly to GBP678.3 million from GBP682.3 million. Cost of sales widened by 9.5% to GBP487.5 million from GBP445.3 million.
"The group has experienced an exceptional set of challenges this last year, with rampant and unpredictable inflation, supply chain disruptions, residual Covid-19 impacts, staff shortages and weak demand levels. The McBride team has worked tirelessly at the various mitigations in a very uncertain and difficult environment for the group and its customers. As we start the new financial year, our trading performance is improving, market dynamics are favouring private label and, with the support of our lenders, we have a reset funding arrangement to provide a clear runway for the group to pursue its strategic objectives," said Chief Executive Officer Chris Smith.
Looking ahead, the firm said trading in the new financial year is in line with internal plans and that volumes are recovering slowly "against a backdrop of an environment that should favour private label products".
Earlier on Thursday, McBride said it amended some parts of its EUR175 million revolving credit facility.
While the sustainability-linked revolving credit facility remains in place until May 2026, no covenant tests will be conducted until September 2024. Further, overdrafts of GBP5 million and EUR15 million will become ancillary facilities under the RCF until September 2024.
Chief Financial Officer Mark Strickland said: "This reset of our financing agreements is the culmination of detailed reviews of the business prospects by the board, its financial advisors and the lender group, and is an excellent outcome following the very difficult trading period over the past 12 to 18 months. It provides the business with funding certainty as our trading prospects recover and we refocus our teams on the improvements anticipated through the Compass strategies."
The company added that it will pay no dividend until the RCF is refinanced.
By Tom Budszus; [email protected]
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