30th Jun 2014 11:43
LONDON (Alliance News) - McBride PLC Monday said it will restructure its struggling UK business, a move which will see the household and personal-care products company shed a quarter of its UK staff, as it tries to restore the business to profitability.
Back in April, the company known for brands including Ovenpride and Limelite, said that it was unlikely that it would meet market expectations for the year ended June 30, citing weak demand in the UK and Italy and ongoing difficult trading conditions.
It said revenue for the year was down 3% on a constant currency basis, as revenue from its Private Label customers was flat, and contract revenue declined by 20% due to the winding down of some contracts.
At the time, McBride also announced that due to weak UK sales, it was carrying out a strategic review of its UK operations, which it said was likely to lead to a significant restructuring of its activities and a reduction in capacity.
McBride said in a trading update Monday that it will restructure the group's activities, remove unprofitable business and reduce capacity in the UK in order to improve profitability, a move it said will make around a quarter of its employees within its UK business redundant and save around GBP12 million by June 2016.
"We will exit some business in non-core un-profitable categories, but our capacity to meet growth opportunities in our core categories remains unaffected," said Chief Executive Chris Bull in a statement Monday.
It said roughly 400 positions will be made redundant out of 1,600 employees that currently work within the UK business.
"Savings of around GBP12 million are expected to be delivered in full by June 2016 with around GBP3 million benefiting the financial year 2015. Associated cash implementation costs are expected to be around GBP14 million," the company said.
McBride said that it will book GBP6 million of goodwill impairment costs in the financial year just starting, as well as a number of other material one-off costs.
"Total exceptional charges will amount to around GBP37 million in FY14 and GBP7 million in FY15, including the impairment and final costs in relation to existing savings programmes," the company said.
Going forward, McBride said its expected underlying revenues to grow 2% in the financial year ahead, although it said that growth will be offset by the costs of restructuring its UK business.
"We are announcing a robust plan that will help restore our UK profitability," said Bull.
McBride said it will announced its full year results for the year ended June 30 on September 10.
McBride shares were down 0.8% at 94.75 pence at midday Monday.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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