McBride revenue rises in first quarter, FY expectations backed
McBride posted a jump in first-quarter revenues on Tuesday as it backed its full-year expectations.
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The company, which makes and supplies private label products for the domestic household and professional cleaning and hygiene markets, said revenues rose 15.4% at constant currency and 5.5% on an underlying basis, excluding the benefit of revenues from recently-acquired Danlind.
Underlying household division sales were up 5.3%, mostly thanks to higher sales in the East and UK regions, up 20.8% and 11.3%, respectively, and McBride said its expectations for full-year revenues are unchanged.
During the quarter, raw material and packaging costs together with logistics costs, especially in northern Europe, were slightly higher than expected, but this was mitigated by improved sales volumes and lower overheads.
McBride highlighted increased volatility and uncertainty around future raw material and packaging cost levels and said that while it will always seek to recover or mitigate any increased input inflation, the timing of these actions typically lag their impact.
"In the absence of further near term raw material and packaging cost rises, the board expects full year earnings to be in line with expectations."
Chief executive Rik De Vos said: "The group is busy completing the sale of PC Liquids, integrating Danlind and managing revenue growth to expectations. Margins continue to be a key focus especially against the backdrop of potentially further increased input costs.
"We continue to outperform our sector both financially and operationally in what is a particularly challenging environment and the group is strongly positioned to exploit further growth and margin opportunities in the coming year and beyond."
Liberum said the 5.5% organic revenue growth was in line with expectations.
"We believe European retail customers remain tough negotiators and price increases needed to mitigate the impact on 2019 profits will remain a challenge and could come at the cost of volumes. However, at the current valuation of 9.3x 12m forward price-to-earnings, the risk reward balance is in favour of the shares and we retain our buy rating with a 170p target price," the brokerage said.
At 0955 BST, the shares were down 1.4% to 136.80p.