LONDON (ShareCast) - Shore Capital has downgraded its profit forecasts for McBride after the own-label household goods maker announced extra costs as part of a shake-up.

Shore has reduced its estimates for 2014/2015 continuing pre-tax profit to £17.6m from £20m and earnings per share (EPS) to 7.2p, which it said reflected concerns around achievement of operational performance targets and treatment of one-off costs.

It kept its 2014 forecast of £17m and EPS of 7.5p after management said fourth quarter trading matched hopes.

"We reiterate our 'sell' recommendation, believing McBride is not in control of its own density, sitting uncomfortably between under-pressure retailers, aggressive and promotional fast-moving consumer goods branded operators and a potentially volatile crude oil price," Shore analyst Darren Shirley said in a note.

McBride, which makes detergents and other products for UK supermarkets, said it would remove un-profitable business and reduce capacity in the UK to improve profit, resulting in 400 job losses.

It expects to save about £12m by June 2016 with around £3m benefiting the 2015 financial year, while costs of the shake-up are set to be about £14m. It said
total exceptional charges would be about £37m in 2014 and £7m in 2015.

Shares in McBride fell 0.75p to 94.75p at 13:07 in London.

PW

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