Mcbride Share Discussion Threads

[darrin1471] 16/1/2024 20:33

NoBull. Can you confirm MarketScreener have raised MCB 2024 EBITDA again from £73m to £76m and lowered year end debt to £137m from £145m.
£76m EBITDA and £137m does not marry up with MCB saying "The Group continues to anticipate that net debt / adjusted EBITDA will be close to 2x by 30 June 2024.". Unless the difference is EBITDA and adjusted EBITDA?

[tomv33] 16/1/2024 20:24

Profit taking?

[darrin1471] 16/1/2024 17:08

WJCCGHCC You have been on ADVFN long enough to not be surprised that you get a negative response if your first post on a thread is a negative comment on a big down day.
Your initial post is a fair observation but not relevant to today's movement. Your post 1296 is very much worth adding to the thread.

On first reading the TU, I also spotted the lower volumes vs the last update in November.
The numbers I have for volumes are:
H1 23 1.6%
H2 23 9.6% Q3 6.5% and Q4 12.7%
Q1 24 8%
October 8.8%
Nov/Dec 2.8%
Q2 4.8%

It has previously been reported that MCB uses 100's of different chemicals in their products. Looking at the share performance of chemical companies I would surmise that the cost of chemicals have been falling after the prices rocketed in 2022 along with oil and energy. MCB were a looser when input prices rose, they should benefit as input prices fall. I would therefore argue that MCB may boost margins over the short term. Competitors have also struggled in recent years resulting in reduced investment and closing capacity.
NLW is UK specific and a lot of MCB's employees are outside of the UK.

[northwards] 16/1/2024 16:58

Biggest daily volume since summer.

[wjccghcc] 16/1/2024 14:08

Each to their own. Didn't Munger say when he looked at an investment, he always focussed on the negatives rather than the positives?

[she-ra] 16/1/2024 13:59

Yes i must learn to talk down my own shares sometimes. And I should probably not talk about Private Label growth keeping up and that private label is their core business. Just not emphasise that.

Silly me.

[wjccghcc] 16/1/2024 13:56

Thanks spooky.

darrin - there wasn't much to add. It was clearly undervalued once the covenant tests were relaxed and the margin recovery kicked in. At 80p and a fwd PE of just under 6 and with still excessive debt and volatile input costs, IMHO it's closer to fairly valued. Note that volume growth in the last 2 months has reduced (was 8.2% after 4 months and now 6.4% after 6 months) although private label growth is still good. Further margin expansion will also be hard due to the NLW increase and energy/packaging costs stabilising.

Obviously, if volume growth kicks on again or other factors allow margins to take another step up, then it will look cheap again.

FYI I still hold (though less than I did).

[darrin1471] 16/1/2024 12:59

WJCCGHCC "price taker rather than a price maker" is quite a simple explanation on a down day. Congratulations on your large holding at 40p. Pity you did not feel able to add your thoughts to this thread before today.
MCB is a lot more complicated than just being a price taker.

[spooky] 16/1/2024 12:21

she-ra - Not sure that post is particularly constructive. WJ always tries to add value.

[wjccghcc] 16/1/2024 12:10

Seriously?

[she-ra] 16/1/2024 11:38

Took you 1 hour to come up with that bull. Not quite as quick as the 30 seconds to 1 minute to tick up your last post via multiple aliases.

[wjccghcc] 16/1/2024 11:32

Why?

I bought a large holding at 40p so clearly it’s been a great sector for me. Doesn’t mean I have to wear rose tinted spectacles.

[she-ra] 16/1/2024 10:29

Which has always been the case.It was the case when they were £2.50 a share.

Maybe this isn't the sector for you and you should move on.

[wjccghcc] 16/1/2024 10:28

The problem here is that they're a price taker rather than a price maker. The supermarkets don't want them to fail so will give supportive pricing until the debt is out of the danger area, but once it's on a steady footing, they'll squeeze the margins again IMHO.

[she-ra] 16/1/2024 09:53

john09 - I dont. Debt has been cut by quite a bit. Operating profits keeps being higher than expectations. People are obviously switching and staying with supermarket/budget stores own brand products.

This company has close to £1 billion revenues and is in the growing value sector.

[john09] 16/1/2024 09:45

Disconnect I feel between the companies tone in last 2 trading updates and a tipsheets tone

[nobull] 16/1/2024 08:45

Shipping costs of bulk chemicals from China and the Houthis disrupting shipping might be a small contributory factor compared with EdmondJ's reason. Also, we maybe can't trade on a higher PE until the risk free rate of interest drops (next year?): the value added then increases, I wonder, for a given eps forecast, or maybe we just need margin growth for a higher PE or both, and maybe the passage of time for those 15p eps forecasts to be actual reality!

[edmondj] 16/1/2024 08:24

Likely profit-taking after stock doubled on quite a bit of hype. Low PE depends on forecasts than track record.

[gripfit] 16/1/2024 08:19

What has happened here ?? Thought update would send it over a £

[johnv] 16/1/2024 08:09

Not a good start. Down 10%

[northwards] 16/1/2024 07:57

Suspect the market will pick up positively on that.

[nobull] 16/1/2024 07:54

Yes, MarketScreener forecast £141m net debt by end of June 2024, but it was £145m by end of Dec 2023!

[northwards] 16/1/2024 07:45

Reduced debt by over 20m in the last half.

[darrin1471] 16/1/2024 07:38

Trading Update

Continuing shift to private label value supporting good trading activity.

Financial performance slightly ahead of our expectations.

McBride plc (the "Group"), the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets, today provides a trading update for the six months ended 31 December 2023 ("the Period").

The Group expects to report first half adjusted operating profit slightly ahead of our expectations.

Group revenue was 9.9% higher than the prior year on a constant currency basis, benefitting from both volume growth and the impact of pricing actions in the last financial year to recover input cost inflation. Overall volumes in the Period were 6.4% higher, driven by continuing momentum in private label (private label volumes grew by 10.1%) as consumers continue to mitigate cost of living pressures.

While input costs have generally stabilised, energy, employment and financing costs continue to apply inflationary pressures. Additionally, the Group continues to manage significant supply chain volatility.

The Group's focus on reducing debt and maintaining tight control of costs resulted in net debt closing the Period at GBP145.7m (30 June 2023: GBP166.5m), with liquidity at GBP85.0m (30 June 2023: GBP59.3m), comfortably above the minimum requirement per the banking covenant. The Group continues to anticipate that net debt / adjusted EBITDA will be close to 2x by 30 June 2024.

The Group's half-year results will be announced on 27 February 2024.

[hpcg] 16/1/2024 07:35

The de-gearing story continues, and revenue growth is now well ahead of headline inflation rates.