Mcbride Share Discussion Threads

[electronica] 24/6/2010 19:33

wellbutpoor - doesn't click with me.

[essentialinvestor] 24/6/2010 17:20

what happened to wellbutpoor(ER)

[electronica] 24/6/2010 13:59

ukinvestor

"wilkos and 99p" are both customers of MCB.

Wilkos own brand stuff is MCB & 99p (and Poundland) both stock MCB's Fresh & Easy branded products (did you know that MCB owned a couple of brands?).

[essentialinvestor] 24/6/2010 13:37

One of my better calls, I thought Bulls were calling this incorrectly.

I did note that the cost of Oil may impact on margins, and today we
see the result.

[spob] 24/6/2010 13:29

hmmm Investors Chronicle had these down as a buy at 226p 12 feb 2010

now 143p

hee hee :)

[spob] 24/6/2010 13:19

.




from FT Alphaville 24 June 2010


Moving on to a company we haven't looked at for a whileBE
(Dave: isn't the offer England goals only? I doubt they're wincing.)NH
McBrideMcBride plc (MCB:LSE): Last: 143.80, down 35.4 (-19.75%), High: 159.00, Low: 142.20, Volume: 2.51mNH
Europe's biggest maker of white label household and personal care productsNH
and they have issued a thumping profits warningNH
which seems to have spooked ReckittReckitt Benckiser Group Plc (RB.:LSE): Last: 3,052, down 83 (-2.65%), High: 3,159, Low: 3,034, Volume: 1.76mBE
McBride's been a golden boy, so this is a real nightmare.NH
it isNH
and it's the fault dirty EuropeansBE
Steady on.NH
people in Spain, France and HollandNH
aren't cleaning as much as they wereNH
either their homesNH
or their personsNH
austerityNH
that's what it doesBE
Actually, Poland seems to be their worst market.BE
I'm not saying anything about that.NH
and there has also been some cost rises inNH
HDPE and Surfactants (ethylene oxide)NH
anyone know what they areNH
one of the BOTER must, surelyBE
"Surfactants"?NH
passNH
as it happens the downgrades aren't that bigNH
but this wasNH
a golden boy as he mentioned earlierBE
Big multiple, now being eroded.BE
Shore Capital has a good note on the read-through.BE
Subdued trading update from McBride, with Q4 sales on a constant currency (cc) basis
declining by 3%, resulting in flat full year sales (cc). We estimate actual sales c2% ahead.
The primary sales slowdown has been in Europe, with the group citing weak retail sales
across many markets (Spain, France, Holland) rather than any increase in competitor activity.
Such commentary has implications for both Reckitt Benckiser (Buy at 3135p) and Unilever
(Buy at 1858p).BE
In the UK promotional activity remains high, and above McBride's
expectations and we believe sales growth was subdued at c0.5% through Q4. Management
has highlighted the growing impact from rising input costs, ahead 4% through H2 2009/10.
Looking into 2010/11, management has also highlighted demand driven increases in HDPE
and Surfactants (ethylene oxide) and the significant risk of a further 4-6% cost increase
through H1.BE
We therefore foresee further pressure on margins, with costs recovery likely to be
a 3-6 months process. We provisionally downgrade our 2010 forecast by £2m to £43.4m,
EPS of 17.6p, we also provisionally downgrade our 2010/11F forecast to a flat profits profile
year on year. Post our downgrades, and a lack of visibility in the 2010/11 forecasts we believe
it is prudent to temper our positive recommendation on McBride and downgrade our
recommendation from Buy to HOLD.BE
And shop broker Investec, who are shop, remain positive.BE
Did I mention they're shop?NH
not sureBE
So here's investec, who are shop.BE
We see McBride's pre-close update as supportive of our FY10E forecasts.
However the input cost environment in FY11 is set to be materially more
challenging. We think McBride are being appropriately prudent and
anticipatory on the outlook and see the impact as principally one of phasing,
with the potential to benefit from compensating lead effects as and when
inflation cycles out again. However we expect FY11 to be challenging and will
be downgrading our forecasts by c.20% at the EBIT/PBT/EPS level.NH
20% thereNH
Investec must have been very bullishBE
Indeed.BE
We therefore expect to downgrade our FY11E EBIT and PBT by c. £10m (from
£53m and c.£48m to £43m and c.£38m respectively (equivalent to EPS of c.15.4p
in FY11E). This amounts to 20% downgrades in round numbers. While we think
there is potential for McBride to benefit from a compensating positive lead effect
in FY12E, the timing of this remains uncertain and we are provisionally reducing
our FY12E forecasts in line.BE
Clearly this is not good news for the near term earnings outlook and we expect
the shares to open weaker this morning. However we think that McBride are
being appropriately prudent on the outlook and see the issue as primarily one of
phasing. The company's financing envelope also remains robust, with EBIT
interest cover post our planned downgrade in excess of 7x in FY11E. The
company look to be committed to delivering the anticipated FY10 dividend (where
we are forecasting 6.5p) and this provides good valuation support in our view.BE
That's from Investec. Who are shop.12:00PMNH
and sticking with subjectNH
here's some read acrossNH
to Reckitt and UnilverNH
from NomuraNH
In its trading update to FY June 30, McBride stated that, while sales in constant currency for the year are expected to be flat, Q4 (to June) sales are expected to be 3% lower. The company blames this on on-going branded promotional activity in the UK (45% of sales) and weak retail sales across Western Europe.

McBride also highlights that raw material costs are 4% higher in June 10 than in December 09 and suggests costs will rise a further 4-6% during the next financial year.

We see this as an incremental negative for a number of HPC operators with Western European exposure, particularly to home care that looks to be experiencing a greater level of the cost pressures and competition led/ consumer related promotional activity (80% of McBride's sales are in Home Care vs Personal Care).
RAW is market chatter – information that has not been formally tested through traditional journalistic channels (PRs etc). The story might be complete rubbish, but if we believe there is some substance to it we will say so. Either way, Reader Beware.NH
While the branded operators look to be taking share back from private label in HPC in Europe and volume growth in the Q to June is also likely to benefit from still generally weak comps, we see this partially offset by on-going pricing/ promotional pressures. At the same time rising input costs and the need for higher marketing spend is likely to see EBIT margins compressed relative to Q1 10.

We are bearish on Unilever where we see a risk of a margin 'sour spot' in 2010. We expect a combination of higher input costs, heightened competitive pressures, a lack or pricing power and a need for sustained levels of marketing spend all putting pressure on group margins (we forecast a margin decline of -60 bps in Q2/ -20 bps for FY10). We also forecast volume growth slowing to c.+2% in H2 as the comps get tougher and the flexibility to continue increasing A&P spend abates.

We remain cautious on Reckitt (Reduce, PT 3180p) where we expect the group's developed market homecare categories to remain under promotional pressure (lower consumer response to innovation/ competitive pressures notably from P&G).

Among the HPC names, we continue to have a preference for Henkel (Buy, PT EUR 46) where we expect to see continued good earnings momentum with half the group's sales exposed to Adhesives (cyclical recovery/ H2 price increases in a number of categories already
secured) and with there being significant scope for self help to mitigate pressures in HPC.

[ukinvestor220] 24/6/2010 12:58

yep there goes 150 - you would think that all this doom and gloom would encourage ppl to buy private label, but with the likes of wilkos and 99p doing discounts i suppose there isnt the demand ... yet !

[m.t.glass] 11/6/2010 14:20

Another recent low being taken out?

[volsung] 20/5/2010 11:44

Next stop £1.50?

[essentialinvestor] 30/4/2010 12:01

Nope, that is also incorrect.


I posted here from the 24/09/2009, the share price was within 10 pence of today's
price approx.

Sure there was another leg up, as there was for the entire Market.

[wellbutpoor] 30/4/2010 11:04

Essential, I have no problem taking a little humble pie on occasion, although may I remind you that you have held your current pessimistic stance from around 120p and missed a spectacular leg up.

A long trade with sensible stop loss would have returned you some handsome profits..

[volsung] 30/4/2010 10:40

Well I'm short from a little above here. Looks to be on a downward trajectory for a while at least

[essentialinvestor] 30/4/2010 10:14

wellbutpoor


Perhaps you could take a minute to read back some of your postings
here over the last couple of months.

Sometimes the "..doubting Thomas.." is correct.

[wellbutpoor] 30/4/2010 10:00

A little shocked at the volatility here folks - but a very good buying opportunity me thinks.....

Results uninspiring, but through a difficult period very much intact and ready to grow.

[volsung] 22/4/2010 15:39

Support at £2?

[ukinvestor220] 22/4/2010 11:52

ex div next wed for 2 whole pence.
there was an IMS last year after 1st quarter, should there be one again this year it'll be next friday 30th

[volsung] 21/4/2010 15:58

Aye that too

[simon gordon] 21/4/2010 15:56

Losing their top rated CEO was another red light to sell.

[volsung] 21/4/2010 15:55

Often a good indicator EI

[essentialinvestor] 21/4/2010 15:52

The clue was in the Director dealing imv.

[volsung] 21/4/2010 15:41

Actually now short LOL

[volsung] 21/4/2010 15:40

Thats me out at a loss.

[electronica] 15/4/2010 08:23

Essential

Since the last major uptick in oil prices (2008-2009 - where we saw prices way over $110) MCB has adjusted its customer contracts to include oil price volatilty as a "pass through". They have learnt their lesson here!

[essentialinvestor] 14/4/2010 21:19

Forget your Charts and look at the price of MCB's main input cost,
Oil.