5th Sep 2019 11:10
(Alliance News) - Household goods firm McBride PLC reported a decline in annual profit, despite solid revenue growth in the year.
McBride's pretax profit for the 12 months to June was GBP22.0 million, 17% lower year-on-year, with the adjusted figure falling 26% to GBP24.5 million.
The company posted revenue growth of 4.6%, or 5.0% at constant currency, to GBP721.3 million.
McBride faced its third year in a row of "significant" cost and logistics inflation, and margins were protected by increasing prices. However, the operating margin did weaken to 3.7% from 4.6%.
McBride is paying a 1.8 pence final dividend, taking the year's total to 3.3p, down from 4.3p the year before.
McBride had in July warned on a weaker second half of the year than expected, with performance in France and the UK particularly weak. This weakness had carried over from the end of June, it added.
"As previously announced, the past year has seen a shortfall in profit performance versus our core ambitions. The actions taken over the past three years have enabled the Group to improve its competitive advantage and market share in most product ranges, despite difficult trading conditions," said interim Chief Executive Chris Smith.
"Our teams have completed a number of key actions towards our strategic plan, including the integration of Danlind, the disposal of our loss-making Personal Care Liquids business and downsizing of Aerosol operations. This now allows us to focus on our core Household activities in Europe, together with realising our ambitions for our Asian business."
"The margin environment remains challenging, and whilst we see certain input costs stabilising we will continue to be vigilant on overhead costs and continue to pursue growth opportunities in line with our strategic plans," he continued.
Segmentally, core Household revenue increased by 5.8% to GBP673.6 million, but the unit faced "a prolonged period" of service issues as well as higher costs, leading to a fall in profit.
Aerosols revenue fell slightly, and the unit's loss widened, with the year "dominated" by developing a standalone operation in France while shutting down UK manufacturing in Hull.
Looking ahead, McBride reiterated guidance given in July, with Household revenue to be flat for the year to June 2020 and earnings to fall slightly.
McBride shares were 0.2% lower on Thursday morning at a price of 50.90p each.
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