Private label household goods manufacturer McBride (MCB) saw its shares jump by more than 8% today after seeing progress in its cost-cutting efforts.
McBride said the “repair” phase of its new strategy, which came out of the company’s review published with last year’s full-year results, was already driving benefits in the first half of its financial year.
The shares were up 8.5% to 167.8p by mid-afternoon, reaching as high as 171p in morning trading.
The firm plans to “lower complexity” by slashing its customer base down to 25% of its existing portfolio. This phase of the “Repair, Prepare, Grow” three-to-five-year programme, which forms part of the “Manufacturing our Future” strategy, would be completed by the end of June.
McBride published its half-year results this morning, which saw revenue fall 5.6% on a reported basis from £364.7m in the first half of 2014 to £344.1m.
It attributed the drop to the impact of a weaker euro on translated results. Revenue rose 0.4% on a constant currency basis, it said.
Group adjusted operating profit increased from £12.5m to £17.6m. Adjusted operating profit margin climbed from 3.4% to 5.1%. A weaker euro meant the adjusted operating profit included a negative foreign exchange translation impact of £1.3m.
Reported pre-tax profit came in at £13m, up from £7.3m. When adjusted, pre-tax profits climbed from £8.7m to £13.6m.
McBride reported sales in household 0.9% higher overall with growth across most regions, apart from the UK, where lower private label sales and the end of some contract manufacturing business drove an 8.2% fall.
Personal care sales fell 1.5%. Declines in the UK were offset by “good gains in Eastern Europe and Asia delivered “strong growth” in all territories.
The group also announced that its chairman, Ian Napier had informed the board of his intention to retire at the end of June, after nine years in the role.
Rik De Vos, chief executive, said: “We are pleased with our progress in the first half and the improved profitability following the launch of our strategic transformation plan.
“The commitment and focus of the McBride team on the execution and delivery of our objectives is very encouraging and a critical aspect for future success.”
The ongoing actions of the group’s “repair” phase, which in part would result in lower second half revenues, were nevertheless expected to provide further progress in profitability, he said.
“As a consequence, the board is now expecting full year results to be modestly ahead of its previous expectations.”