McBride sees rise in demand but cancels dividend amid Covid-19
By Michele Maatouk
Date: Wednesday 25 Mar 2020
(Sharecast News) - Cleaning products manufacturer McBride said on Wednesday that demand since early March has risen across most regions but that it is cancelling its dividend to be "prudent" amid the Covid-19 outbreak.
Demand for products such as bleach, anti-bacterial and disinfecting sprays and certain dish and laundry cleaning products has increased, it said. However, it is not year clear to what extent this is due to additional end-user consumption or short-term consumer stockpiling.
McBride said its factories remain open and operating at varying levels of production.
"Our ability to operate at full production is constrained by labour attendance, certain material supplies and, increasingly, distribution challenges for both inbound and outbound materials. At this time excess demand levels are being met for the most part from a combination of inventory and choices of production priorities."
The company said that as Europe progressively locks down, there may be further restrictions on its ability to operate factories to match demand levels. The company is working on output optimisation through the recruitment of additional labour, customer prioritisation, range simplification and haulage optionality.
"Revenue improvements in the short term are likely to be tempered by reduced factory efficiencies, although we expect to see some benefit from lower raw material input costs in the fourth quarter, dependent on activity levels and product mix," it said. "We are actively limiting discretionary spend, postponing or cancelling capital projects and closely monitoring working capital levels."
The group said it is unable to give any guidance for the current financial year and announced the suspension of its 0.8 per share interim dividend.
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