McBride H2 Earnings Call Highlights

Key Points

• Fiscal 2026 performance was resilient but pressured by inflation: Revenue rose 0.8% to £7.7 million growth, while adjusted operating profit fell to £59 million. Conflict-related raw-material and packaging inflation reduced profit by an estimated £6 million.
• McBride expanded through Eurotab and a major Vestacy agreement: Eurotab is expected to add about €65 million in annual revenue, while the five- to eight-year Vestacy manufacturing deal could add approximately £170 million by the second half of fiscal 2028.
• Private label and transformation initiatives remain growth drivers: Private-label volume share in Europe rose to 36.7%, and McBride’s transformation program delivered £15.3 million in cumulative benefits. Management expects continued pricing and margin pressure as input and freight costs remain volatile.

McBride LON: MCB reported what Chief Executive Officer Chris Smith described as a resilient full-year performance for the year ended June 30, 2026, despite a sharp rise in input costs during the final quarter linked to the Middle East crisis.

Revenue increased by £7.7 million, or 0.8%, while adjusted operating profit declined by £7.1 million year over year to £59 million, according to Chief Financial Officer Mark Strickland. On a constant-currency basis, revenue fell £17.3 million, or 1.8%.

Strickland said McBride experienced a 12.2% increase in raw-material and packaging costs in two months during the final quarter, a pace significantly faster than the inflation experienced in 2021 and 2022. The company estimated that the conflict-related inflation reduced full-year profit by about £6 million. Without that effect, adjusted operating profit would have been about £65 million, he said.

The company has sought price increases from customers and expects further discussions as elevated costs persist. Smith said McBride was working to minimize the impact on customers while recovering enough pricing to restore margins.

Private Label Gains Share

McBride said private-label household products continued to gain share across the five largest European economies, which it uses as a proxy for its wider market. Private-label volume share rose one percentage point to 36.7% for the 12 months through June 2026, while the total market was flat.

Over the past three years, the total market grew about 3.3%, according to Smith, while branded volumes were flat and private label drove the market’s growth. Private-label share increased by 2.5 percentage points over the period.

Dishwashing products saw the strongest private-label share growth, reaching 44.6% of volume, roughly three percentage points higher than three years earlier. Smith said the company was seeing early indications of increased retailer interest in private-label products amid continued inflation pressure on consumers.

Eurotab Acquisition and Vestacy Agreement

McBride completed its acquisition of specialist tablet manufacturer Eurotab on July 1. Eurotab operates three manufacturing sites, two in France and one in Turkey, producing automatic dishwashing tablets, disinfection tablets and humidity-absorption blocks.

The acquired business is expected to add approximately €65 million in revenue during the current financial year. Net consideration was €32.8 million, with the acquisition valued at 4.6 times on acquisition and forecast to fall to 3.1 times after synergies, Smith said.

Management expects Eurotab to be earnings-per-share and profitability accretive from the first day. The transaction expands McBride’s automatic dishwashing tablet capacity, adds new product categories and gives the group a foothold in Turkey. Smith said the Turkish operation’s product ranges require updating, while McBride intends to use its European network to broaden the products offered to Turkish retailers.

The company also announced a long-term manufacturing agreement with Vestacy, formerly Reckitt Benckiser’s Essential Home business. The arrangement, which runs for between five and eight years, will transfer the majority of Vestacy’s European production to McBride.

At maturity, the agreement is expected to add about £170 million in revenue by the second half of fiscal 2028 and increase contract manufacturing to more than 25% of group sales, above McBride’s strategic target set at its 2024 capital markets day.

The agreement involves approximately 180 million additional units annually. McBride will acquire two former Vestacy factories, in Granollers near Barcelona and Porto Alto in Portugal, for nominal consideration. Vestacy is funding the majority of related capital expenditure, while McBride expects to spend about £17 million over three years on project costs, separation, integration and limited capital investment.

Smith said around 90% of the Vestacy volumes awarded were in liquid formats. The company plans more than €40 million of capacity investment across its liquids plants during the next two years, including at the newly acquired Iberian sites. McBride expects to take over the two sites in February 2027.

Divisional Trends and Transformation

Liquids, McBride’s largest division at more than 55% of group sales, faced competitive tendering, margin pressure and the greatest impact from late-year inflation. Volumes were slightly lower, driven largely by weaker own-brand products, while private-label and contract-manufacturing volumes were broadly flat. Management said it had a favorable win-loss ratio in tenders and expects delayed launches to support growth in the new financial year.

Unit dosing volumes fell more than 2%, reflecting weaker contract volumes, although profitability improved through cost discipline, factory performance and product mix. The powders division recorded volume growth in the second half, supported by new business wins and stronger German volumes.

Aerosols recorded strong growth, with private-label volume up 13% and contract-manufacturing volume up just over 10%. Annualized volumes exceeded 100 million cans, a target set two years earlier. Asia reported value growth, with underlying volume growth closer to 5% after adjusting for a distorting measure in Vietnam, Smith said.

McBride’s transformation program delivered £15.3 million in cumulative net benefits and remains on track to deliver £50 million by fiscal 2028. The company said its SAP rollout completed its first go-live in November, with Wave 2 planned for the fourth quarter of fiscal 2027. Productivity initiatives delivered £6.5 million of benefits during fiscal 2026.

Balance Sheet and Outlook

Net debt increased to £122.8 million, largely due to the timing of creditor payments and £18 million in shareholder returns, which included dividends, share buybacks and share purchases intended to prevent dilution. Liquidity stood at £167.6 million at year-end.

The board recommended a 3.1 pence-per-share dividend for fiscal 2026, subject to shareholder approval, following the 3 pence dividend paid in the prior year. Strickland said the company expects its revolving credit facility to be extended to November 2030 following a planned extension exercise in November 2026.

Looking ahead, Smith said the first two months of the new year had produced volumes in line with expectations. However, he said continued volatility in energy, raw materials, packaging and freight costs means margin management and customer pricing discussions are likely to remain a priority in the coming months.

About McBride (LON:MCB)

With trading roots dating back to 1927, McBride boasts a strong heritage. As the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets, McBride offers end‑to‑end development and manufacturing capabilities to a wide range of customers in Europe and Asia Pacific.

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