Private label household goods manufacturer McBride (MCB) has announced a slump in first half sale and profits after a weak second quarter amid “difficult” market conditions.
McBride, which posted its latest profits warning in January, said sales from continuing operations fell 5.1% (4.4% down on constant currency) to £350.4m in the six months to 31 December.
Sales were hit by a “marked slowdown” in last two months of the period. Revenue growth in its South, East and Asia regions, were offset by sales declines in UK, France and North.
During the prior financial year, the Group successfully completed the sale of the European Personal Care Liquids business – meaning on a total basis sales were down 10.4%.
Adjusted operating profit fell by £5.2m to £11.6m, which overall operating profits slumped 45% from £15.6m to £8.5m.
Profit before tax more than halved to £6.6m from £13.3m.
New CEO Ludwig de Mot commented: “Since joining McBride in November I have visited all of our sites and met many of our people and been impressed by their commitment to making McBride a successful business. McBride has a strong market position but the group’s recent performance has been disappointing.
“Our third quarter revenue run rates are as expected. Our revenue outlook remains in line with our expectations despite our markets remaining challenging. Material costs are tracking consistently with the first half year. The board’s expectations for the full year remain in line with our January trading update. ”
De Mot has instigated a full review of the company’s strategy, organisation and operations, with the results expected September 2020 alongside full year results.
In the UK, household revenues of £82.3m were 7.9% lower versus prior year, with Q2 down 12.9% on prior year. This was due in part to lost contracts as well as weaker private label activity caused by a higher level of branded promotions and lower retail footfall in December than in previous years.
Overall household revenues decreased 2.1% to £334.4m, with volume decreases partially offset by the full-year effect of the customer pricing programme implemented in the last financial year.
Packaging giant DS Smith has announced it has received US regulatory clearance for the sale of its plastics division to Olympus Partners and its affiliate Liqui-Box Holdings.
The consent decree from the US Department of Justice is now subject to the required U.S. federal court ratification, which is the final part of that process and we expect the transaction to complete promptly thereafter.
DS Smith said the sale “represents an important step in the group’s continued progress as a leader in sustainable packaging with a clear focus on our fibre-based business.”
Net cash proceeds of approximately £400m, after taxation, transaction adjustments and expenses, will be used to reduce financial gearing.
Elsewhere, Swiggy, India’s largest food delivery platform, has raised US$113m as a part of its Series I funding round – led by existing investor and former Just Eat suitor Prosus. The round also included participation from Meituan Dianping and Wellington Management Company.
Sriharsha Majety, CEO, Swiggy, said: “Over the last couple of years at Swiggy we have made strong strides in our vision of delivering unparalleled convenience to urban consumers, and in building a fundamentally strong and enduring business while keeping the consumer at the core. We have become synonymous with exceptional customer experience and created multiple growth avenues for our partners while continuing to invest in new lines of business.”
“We are laser focused on continuing to execute on our vision while building a sustainable path to profitability.”
Larry Illg, CEO, Prosus Ventures and Food, added: “When we first partnered with Swiggy three years ago, we recognized the Swiggy team had built a sustainable, long-term business, that stood out amongst others in India. Swiggy has built a solid leadership position in India and is utilizing its strong logistics network and consumer loyalty to expand its offering to services that continue to make consumers lives more convenient.”
“Swiggy continues to exhibit strong execution and a steadfast commitment to delivering the best service to consumers and has one of the best operational teams in food delivery globally. We are confident Swiggy will continue on a path to earn a significant place in the daily lives of Indians.”
On the markets this morning, the FTSE 100 has edged up 0.1% to 7,464.2pts.
McBride has fallen 1.5% to 1,981.5p in early trading after its half year results this morning.
Yesterday in the City
The FTSE 100 ended the day rebounding 1% back to 7,457pts as the number of newly reported coronavirus cases eased.
Notable FTSE 100 risers included Ocado (OCDO), up 3.2% to 1,167p, Imperial Brands (IMB), up 2.3% to 1,844p, British American Tobacco (BATS), up 1.3% to 3,352p, Reckitt Benckiser (RB), up 1.5% to 6,495p, Associated British Foods (ABF), up 1.3% to 2,644p and Diageo (DGE), up 1.1% to 3,141p.
Other risers included Glanbia (GLB), up 4.8% to €10.55, FeverTree (FEVR), up 3.9% to 1,485p, Science in Sport (SIS), up 3.1% to 49.5p, Kerry Group (KYGA), up 2.7% to €125.60, SSP Group (SSPG), up 2.5% to 695p, McColl’s (MCLS), up 2% to 44.4p and Greggs (GRG), up 1.6% to 2,408p.
The day’s few fallers included Carr’s Group (CARR), down 2.6% to 148p, Premier Foods (PFD), down 2.3% to 34.8p and McBride (MCB), down 1.6% to 66p ahead of this morning’s half year results.