Profits hit at cleaning product maker McBride

Cleaning product maker McBride has warned that profits will be around 15% lower than expected as it has suffered from rising costs and falling sales.

The company, which recently sold its UK aerosol division, said the UK has been a particularly difficult market to operate in, with the final two months of the year slowing further.

Investors reacted negatively to the news, sending shares down 13p, or 16%, to 67p in early trading on Tuesday.

Revenues from its household division in the six months to December 31 were down 1.4% compared with a year earlier – with UK sales down 8% due to weak activity in its private label business.

There was better news in its south, east and Asian markets, with growth of 15.7%, 1.6% and 10.7% respectively, although France and the north regions continued to suffer, down 6.8% and 3.7% respectively.

McBride added: “Reflecting the decision to exit UK aerosol manufacture in the fourth quarter of the previous financial year, group continuing revenues at constant currency were down 4.4% versus the prior year.”

Logistics costs have risen, although raw material and packaging costs remained “largely stable”.

However, bosses warned: “In the absence of significant raw material cost changes, the board now expects full-year adjusted (profits before tax) to be approximately 15% lower than current market expectations, reflecting the impact of lower revenues.”

The company appointed a new chief executive, Ludwig de Mot, in November and is in the process of a strategic review, which is expected to be unveiled later this year.