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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Mcbride Plc | MCB | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 3.50 | 3.30% | 109.50 | 16:35:04 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 106.00 | 105.50 | 109.00 | 109.50 | 106.00 |
| Industry Sector |
|---|
| HOUSEHOLD GOODS & HOME CONSTRUCTION |
| Top Posts |
|---|
Posted at 19/12/2024 09:26 by davebowler ZeusInitiation: Lowly rated market leader delivering McBride (MCB) has built a strong platform for future growth through (1) taking market share in its existing activities, (2) expanding into new products or geographies and (3) new wins. Profitability has risen dramatically in recent times; and there are multiple M&A opportunities. The company is the European market leader in own-label cleaning products such as liquids, unit dosing and powders. In its core own-label activity, the company sees many more opportunities to penetrate existing and new global markets. Underlying market forces include regulation, which is driving further market consolidation, innovation, and demographics. Cost-disciplines are robust and MCB has made a good start at achieving its current £50m cost-saving target. The company delivered strong H1-24 results in September although the shares have done well, it remains undervalued in our view at its current 4-5x PE. We initiate with a 175p price target and a Buy recommendation. Leading player with strong prospects: A leading global supplier, MCB is the No. 1 player in the European private label household cleaning product market and the leader in the UK, France and Germany, with a significant presence in contract manufacturing. Manufacturing in fourteen locations, the company’s market positions are supported by a product portfolio which encompasses key clients and leading players across the sector providing extensive exposure. MCB’s client base includes nine out of ten of the major retailers in the region; and the company is bidding to extend its market position to Germany and Spain. Substantial global market, encouraging dynamics: Private label continues to take market share in a global market valued at c.$US200bn p.a. (source: Global Market Insights), and now accounts for close to a third of the key European market. After three difficult years for consumers, private label gains do not appear surprising; however we do not expect private label growth to slow materially as global inflation abates given the quality improvements from private label producers which underpin the “value” pricing proposition. Positive newsflow, major turnaround and successful strategy launch: MCB has engineered a significant turnaround in recent years, as reflected in the FY24A results reported in September, which showed adj. PBT at £53.1m significantly ahead of the prior year: £0.3m and adj. EPS of 21.7p (prior year: 0.0p). The group’s Compass programme was launched in 2021 and looks set to deliver significant benefits, which are only partially included in the forecasts. Last month’s update flagged positive and in-line trading, a continuing focus on net debt reduction, coupled with a note of macro-economic caution re potential input costs. Consolidating sector: MCB’s key target markets for accelerated growth are Germany and Spain. Additionally, some markets offer numerous attractive potential M&A targets, making it possible to take advantage of the opportunity to consolidate a relatively fragmented market. Forecasts / valuation: With a very strong year in the rear mirror, forecasts are set against tough comparators and are correspondingly conservative, with CY25E to be modestly below the prior year. We view CY25E forecasts as well underpinned by major contracts. Our valuation assumptions are based on peer group relatives and suggest a current 175p price target, equating to a modest 8.0x PE. Note that refinancing of the RCF would unlock the potential to return to the dividend list, and that refinancing of the RCF itself became a more real possibility following the cancellation of the “upside sharing” mechanism in H1 24 and the successful completion of refinancing in November 2024. |
Posted at 02/12/2024 14:49 by darrin1471 100k buyer did not appear this morning.50k buyer at 108p did appear. It's probably the same buyer. 50k at 108 taken out in 2 trades 12:41 and 12:45 It is unlikely to be the same seller as the 100k seller on Friday, IMO 50k buyer came back at 106p at 13:21 IMO it looks like somebody is trying to buy a small stake (under 3%) in MCB on the cheap. Tempting sellers with low buy offers. It's been going on for just over 2 months now and they appear to have been reasonably successful. When they have reached 80% of their target then they may start buying aggressively, pushing the MCB price up along with the value of their newly acquired stake. It does not look like a seller causing the MCB share price to fall. Just an opinion. |
Posted at 06/11/2024 17:10 by darrin1471 Chris Smith Chief Executive Officer moves 300,000 of his MCB holding into his and his wife's ISAs.A positive move. I would only move a share into an ISA that I believed was undervalued and likely to result in a future CGT liability outside of an ISA. Any dividend on 300k shares would also not attract income tax. |
Posted at 23/9/2024 14:42 by darrin1471 I don't think MCB has the pricing power to raise prices. Mostly own brand, so customers like Aldi can switch suppliers without the end customer noticing any change.With input inflation, MCB struggles to pass on increased costs without a time lag. As inputs fall MCB will try and hold onto the higher margin as long as they can. Competitors suffered at least as badly as MCB as input prices rocketed, so they are likely to want to rebuild margins before chasing market share. I suspect MCB will try and hide profits from customers as long as they can, which means MCB are unlikely to forecast rising profits in advance. I am hoping MCB will beat expectations regularly, saying they are better utilising capacity and cutting costs through efficiencies. Premium brands increased prices when input prices rocketed at the expense of market share. As input prices fall, I think premium brands will maintain prices and use the higher profits to increase marketing and in-store promotions. I'm unlikely to attend the agm |
Posted at 23/9/2024 10:57 by darrin1471 29,756 @ 1.15 was eaten away at, on Friday near the close.I did not see L2 this morning, so I don't know if the buy orders appeared again this morning. No sign of them currently and L2 is reasonably well balanced. A couple of years ago MCB said that they used 100s of different chemicals and it was impossible to hedge. I think they have more recently said that they do hedge some commodities. I would have thought most commodities used would be petroleum-based (plastic) and energy-cost-sensitiv MCB customers are going to try and push prices down if they know MCB are making record profits. I'm hoping MCB can keep and increase margins throughout the year. Even if they are unable to do so, then the share price should be supported by current profits and the improving net dept position. |
Posted at 16/9/2024 16:02 by darrin1471 In the 2 years I have held MCB, the share price has always, IMO been well "managed" by someone.The MCB share price has always reacted to the news, so I do not see MCB leaking inside information. Over the last couple of weeks, I think we have had a seller who wanted to bank profits on 500k+ shares before the results. Before previous updates, a seller caused the MCB price to drop. e.g. 07/2023 After so many profit upgrades over the last year, tomorrow's current trading and outlook will be eagerly awaited. The market consensus is that MCB is at peak profit. |
Posted at 24/5/2024 12:56 by darrin1471 bluster, that is a real turnaround from where MCB were in mid 2022, I had not really thought beyond paying down the debt .CEO Chris Smith instigated a MCB share buyback programme starting in 02/11/2020 when MCB share price was 63p. MCB bought 8.6 million shares in 10 months at a total cost of GBP6.8m with an average price of 79.3p. Recent capital market day said: 1.5x to 2x Base dividend Cash 1.0x to 1.49x Additional distribution considered Cash / share buy-back / retain at Board’s discretion Below 1.0x Special distribution considered At Board’s discretion In the 07/09/2021 final results "Base Dividend" was one sixth of EPS and "additional distribution" was an additional one sixth of EPS. So should we expect a dividend of 3p rising to 6.5p next year? Board may be a little more cautious after the inflation shock. Chairman is 79, CEO 60 and CFO 62 so MCB is likely to be their last payday. CEO to move to Chairman? |
Posted at 27/2/2024 20:21 by darrin1471 One of 2023’s best share price performers, private-label cleaning products maker McBride (MCB), has upgraded earnings guidance again as the cost-of-living squeeze continues to stoke demand for its affordable products, news that sent the stock up 16% to 85.2p in early dealings on Tuesday.Having reported a much-improved first-half performance with all divisions profitable, the budget laundry-detergent-to PRIVATE LABEL SHIFT PERSISTS A trusted supplier to Europe’s leading grocery retailers, McBride’s strong showing in the half to 31 December 2023 was underpinned by the ongoing shift away from expensive brands and towards cheaper private-label alternatives as consumers seek to save money and retailers look to reinforce their value propositions. McBride’s constant currency revenue rose 9.9% to £468 million in the half, reflecting price increases as well as healthy 10.1% private label volume growth, with the Manchester-headquart In its core strategic focus areas of Germany and laundry, McBride achieved pleasing volume growth of 10.5% and 9.8% respectively. FIRMLY BACK IN THE BLACK McBride also pleased investors with a swing from losses of £7.9 million to adjusted pre-tax profits of £22.4 million thanks to positive margin progress, as well as a £20.8 million decrease in net debt from £166.5 million at the prior year end to £145.7 million. While sales growth slowed in the final two months of the half, the outlook for the rest of the second half and the balance of the calendar year is positive and contract wins will begin to boost revenues from the first half of full year 2025. WHAT DID THE COMPANY SAY? Chief executive Chris Smith commented: ‘McBride has continued with its positive momentum in the first half of this financial year. It is pleasing to see all five divisions continuing to grow on a constant currency basis, supporting our customers with high-quality products to meet the consumer shift to private label.’ Smith added: ‘As we progress our transformation programme, with specific initiatives to enhance McBride’s capabilities and tools for the future, we remain focused on performance delivery today. This focus, together with our continued drive to reduce debt levels, will ensure McBride is well positioned to achieve further progress in the near and medium term and we look to the future with confidence.’ WHY BROKERS ARE BULLISH Investec, which has a ‘buy’ rating and a 112p price target for the stock, said the company ‘continues to make reassuring progress and expects the favourable trends for private label products in its categories to continue throughout calendar 2024. It now expects full year 2024 operating profit to be 10% to 15% above its previous expectations. We upgrade by 17% for full year 2024 and by 8% for subsequent years.’ Peel Hunt (PEEL:AIM) upgraded its full year 2024 pre-tax profit forecast from £40 million to £46 million and highlighted McBride’s ‘improving operational performance, which is translating into strong free cash flow. We upgrade our target price from 108p to 120p to reflect the higher profit outlook.’ |
Posted at 29/11/2023 15:40 by darrin1471 nobull, I'm not selling any either. IMO the forward p/e is low due to the rapid improvement. When those numbers are in the bag I am hoping for a good outlook along with wider recognition, leading to MCB being tipped.Higher sales volumes leads to higher utilisation of capacity, higher margins and higher profits. When capacity is being reached you can either invest in new capacity or raise prices to limit demand. I am not aware of any information on MCB capacity beyond they were targeting improved capacity and efficiency in "Programme Compass". Capacity and strength of competitors is also very important. To hide exceptional profits it may be wise to invest in productivity rather than capacity. I am unsure if recent tax changes in the budget may help this. The Amended Financing Agreement did say "Pricing and fees: No increase in margin applicable to borrowings when debt cover 2.5x or lower". In the AGM TU MCB were forecasting 2x by year end of 30 June 2024, so MCB should be 2.5x by April 24. I am not that interested in MCB dividends. Any dividend yield will hopefully be insignificant when compared to the higher share price. You can currently sell MCB for 64p on L2 backed up by strong buy orders. Still no sign of the seller who has been selling into recent highs. The seller was last seen at 51.1p |
Posted at 25/11/2023 11:30 by darrin1471 miti 1000, I don't have any magic skill or system for forecasting. I was right on the direction of travel but if you look back only a few months you will see I was hoping for numbers which were significantly below what is being forecast today.The inflation bubble we have just seen was unprecedented since the oil crisis of 1974. I invested in MCB on the basis that MCB like everybody else were not expecting the inflation spike and MCB were tied into contacts that were loss making. All competitors were likely to be in the same position. The theory was that new contracts would take into account the new input costs and steady the ship. Then as input costs fell MCB and their weakened competitors would try and hold onto margins as best they could. This is likely to happen in every industry whatever the sector where input prices rose and now are stable or falling. The advantage in this sector is that the market MCB serve is growing. Looking back at MCB history appeared to suggest that the sector pre inflation had been going through a very competitive period of over capacity in some areas such as powders as fashions moved to liquids and pods. New liquids and pods needed new production facilities which left over capacity in powders for example. Over capacity and low margins probably led to low profits and reduced investment. I am hoping that the high inflation period killed off some competitors and reduced industry investment and capacity. Supermarkets are well known for driving the hardest of bargains so MCB are not going to be shouting from the rooftops about future record profits. We are hearing from MCB of "stable raw material and packaging material costs", "potential increased volatility" in input prices, "upward pressures in non-material costs". When record profits come through MCB will be talking about higher volumes from existing production facilities and the success of "Programme Compass". When supermarkets see record profits from their suppliers they will increase the pressure on prices. Supermarkets success will depend upon the strength and capacity of competitors. MCB may be able to maintain or even improve margins further by lower input prices. MCB may be able to hide exceptional profits in the accounts and drip feed them through over the coming quarters. Privately I thought MCB management failed when they did not see the risk of inflation, when they increased debt for share buybacks and gave away 11% of the capital for a loan. They then rewarded themselves with share options at the lows. Now they have terminated the upside sharing mechanism the management look very astute and deserve their rewards for their navigation though a very difficult period. Astute management would target a high share price when those options could be exercised. I think we are entering a period of exceptional profits. I don't know how exceptional they will be. When I bought a chunk of MCB at under 17p there was a lot of risk. I have added as the risks reduced and I understood the company better. I have not sold any yet and continued to add throughout the year including a few before last weeks AGM trading update. I currently have 5x the number of shares I originally bought and MCB is my largest holding. An upside of 100% from here within a year looks very doable, maybe quicker. EBITDA for the current year is forecast to be 40% higher than any time in the last 10 years and there are 5% fewer shares than when MCB's share price peaked above 230p in 2017. |
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