McBride upbeat on sales growth

MCBRIDE, which supplies own-label household goods including toothpaste and detergents to UK supermarket chains, yesterday said raw material costs were showing signs of stabilising.

The Manchester-based company also said it was looking to pull out of business areas where it had not been able to pass on higher prices to its customers.

McBride’s three European businesses, including its UK division, returned to growth in the three months to 23 October.

Sales in the UK had fallen by 3 per cent in the previous year. The firm has had to fight off heavy promotions from branded rivals but said revenues overall rose by 2 per cent over the period, led by central and eastern Europe.

In its interim management statement, chief executive Chris Bull said the firm’s initiatives to recover cost increases were “progressing towards completion” but added it was pulling out of non-profitable products where it has not been able to pass on higher prices.

Analysts at Investec described it as a “satisfactory start to the new financial year”.

“All in all a steady quarter, in our view, but with some early encouraging trends on costs and pricing,” said analyst Nicola Mallard.

But Investec, which has a “buy” rating and 145p price target on the shares, warned that in the first half McBride will be facing relatively tough profit comparatives from last year. Shares in McBride closed up 9.5p at 126.75p.