25.02.2025
Upon announcing the McBride Group (LON:MCB) Interim Results to end-December this morning, its CEO praised the group’s employees for their hard work and its investors for their continued support, stating that together, they are building a strong, resilient and reset McBride, poised for future success.
The Group built on the momentum of the last financial year and delivered a solid performance both financially and operationally, demonstrating further evidence of the Group's higher performance levels.
Despite the backdrop of inflation, strong operational delivery, careful management of costs and tight management of margins have contributed to a period of steady, sustainable growth.
At a Group level, revenue increased by 0.7% to £471.4m up 2.9% on a constant currency basis, with profit before taxation significantly up 47.7% at £25.7m (£17.4m).
Management Comment
CEO Chris Smith stated that:
"McBride today reports excellent half-year results, which are in line with our new elevated financial performance expectations and on track with the medium-term targets outlined at our Capital Markets Day in March 2024.
Our divisional teams continue to execute their respective strategies, with all five divisions healthily profitable. These results demonstrate a business delivering a consistently improved performance.
With the Group's prospects in a much healthier position and with a more normalised debt position, the Board recently announced its intention to reinstate an annual dividend, details of which will be communicated at the time of the final results in September 2025.
Our focus remains on driving performance excellence and maintaining the momentum we have built, whilst continuing the Transformation programme and achieving our sustainability targets.”
Outlook
The Group stated that its full-year adjusted operating profit estimate remains in line with internal expectations.
It noted that consumer cost-of-living challenges persist, supporting the ongoing strength of underlying private-label demand across the Group's main markets.
It stated that materials costs are generally flat, with the rises in certain materials costs seen in the second quarter expected to moderate in the second half, but other inflation remains evident across our activities.
Momentum in the business continues well, with a strong focus on growth, service excellence, cost management and margin delivery to support the group’s medium-term financial performance and cash generation potential.
The Transformation programme will intensify over the next twelve months with projects maturing and becoming embedded across the Group, leading to the delivery of the expected net benefits.
McBride’s normalised financial position now provides optionality on capital deployment, including the return of an annual divided.
Analyst View
Analyst Charlie Cullen, at Zeus Capital, recently upgraded his estimates after the update and has left them unchanged upon the interims today.
He has a Buy rating out on the shares, with a 180p Price Objective, while his DCF target is 192p.
For the current year to end-June 2025 Cullen estimates revenues of £952.1m (£934.8m), with adjusted pre-tax profits of £49.0m (£53.1m), earnings of 20.8p (21.7p) and paying a 2.5p (nil) per share dividend.
The 2026 year could see £971.1m sales, £52.4m profits, 22.2p earnings and a 2.8p dividend.
Further out, he looks for 2027 to report some £990.6m in sales, £53.3m profits, earnings of 22.6p, and a dividend of 3.0p per share.
In My View
This group’s shares, which this morning have been up to 147.50p, then down to 138p, are now at only 142p.
In my view, they are destined to gradually head up to trade within the 190p/210p price range.
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