LONDON (ShareCast) - (Sharecast News) - McBride shares tumbled on Thursday after the cleaning products maker warned that it would suffer a bigger loss than initially expected for the first half amid rising costs.
The company now expects to report an adjusted loss before interest, tax and amortisation of between £14m and £17m for the six months ended 31 December 2021. It had said in October that it was expecting a loss of up to £10m.

"The increase in this loss compared to our previous update in October is a consequence of the ongoing rapidly rising input costs and the timing of pricing agreements," McBride said. "At this stage, our wide range of outcomes is a result of pricing delays with a small number of customers and the resultant implications, which could impact short term volumes."

The company said raw material and packaging costs have continued to experience "very significant" inflationary pressures with availability still impacting its supply chain efficiency. In addition, the shortage of haulage capacity and even higher fuel costs has not abated and have continued to substantially inflate distribution costs.

"McBride has been actively engaged with all its customers to secure substantial price increases to mitigate the impact of these exceptional cost rises affecting the whole industry. Our early increases in late summer have now been outpaced by further rises in input costs and hence further pricing action has been underway more recently," it said.

"It is pleasing to see the support of most customers to these price increase requests with the effect of these further increases starting to benefit December trading and delivering more fully from January onwards."

At 0900 GMT, the shares were down 10.5% at 53p.

Russ Mould, investment director at AJ Bell, said: "It is usually a bad sign when a company flags that profits will be more weighted toward the second-half than usual and it often implies that management has the prayer mat out and is hoping something helpful will turn up. In McBride's case, something has turned up, but it is more trouble, in the form on more inflationary cost pressures, not more help.

"The manufacturer of own-brand cleaning liquids, powders and aerosols now flagging a greater-than-expected first-half loss due to higher input costs, higher fuel costs and shortages of haulage capacity."

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE