McBride posts £300,000 loss for six months ended Dec. 31 compared with £11.6M gain in year-ago period due in part to one-off costs; revenues for the period rose to £423.1M from £407.9M a year ago
February 9, 2012
– 2% revenue growth at constant currency with 3% revenue growth in our selected core growth categories.
Adjusted operating profit in line with expectations with the year-on-year reduction reflecting the previously announced increase in raw material costs and the time lag in recovery.
Operating profit impacted by a £6.3m exceptional charge relating to previously announced re-structuring plans.
Adjusted operating profit is 17% higher than H2 of last year as cost recovery measures take hold.
Net debt of 1.9x annualised adjusted EBITDA1.
Implementation of “Refresh” strategy continues leading to an expectation of continued progress in the second half.
Chris Bull, Chief Executive, commented:
“Our first half performance has been in line with our expectations. We delivered revenue growth in a challenging economic environment and, with the continued implementation of the “Refresh” strategy expected to drive growth in the second half of the year, the Board has maintained the interim dividend.
The increase in Private Label share in our core markets over the last few months has been particularly pleasing, and reflects the sustainable value that Private Label offers to consumers. The economic environment will lead consumers to continue to be price-sensitive without wanting to sacrifice quality. By investing in product innovation and improving our competitiveness, we expect to be able to continue to take market share.”
Whilst some volatility in the global commodity and currency markets remains, trading since the end of December has been in line with the Board’s expectations, and we expect to see continued progress for the remainder of the year. Our re-structuring activities are being implemented to plan and will lead to total exceptional charges of around £21m and annualised savings of £7m as previously announced. We continue to look for further value-enhancing cost reduction opportunities.
Overall the Group has delivered a performance in line with the Board’s expectations, achieving revenue growth despite the weak economic environment. Reported revenue increased by 4%, and on a constant currency basis increased by 2%. The Group continues to focus on cost efficiency with administrative costs 2% lower than prior year. Adjusted operating profit1 for the first half was £10.3m (2010: £20.2m), reflecting the time-lag in recovering material cost increases experienced earlier in 2011. As a result, adjusted operating profit1 margin fell to 2.4% (2010: 5.0%) and return on capital employed1 fell to 10.3% (2010: 20.7%). Cash generated from operations, before exceptional items, was £17.3m (2010: £27.2m). The UK division’s revenue increased by 3% to £163.5m (2010: £159.0m) reflecting the benefits of selling price increases. Adjusted operating profit1 declined 35% to £5.4m (2010: £8.3m) driven by higher material input costs. The Western Continental Europe division’s revenue increased by 4% to £211.4m (2010: £203.4m) and increased by 2% on a constant currency basis. Adjusted operating profit1 declined 52% to £6.2m (2010: £12.8m), driven by higher material input costs. Central and Eastern Europe divisional revenues increased by 5% to £71.3m (2010: £67.6m) and increased by 5% on a constant currency basis, while adjusted operating profit1 declined 32% at £2.3m (2010: £3.4m).