McBride plc - initiation report - Proudly, profitably, private label
McBride is the European market leader for private label household cleaning and has emerged from a period of unprecedented cost inflation as a stronger, leaner, more profitable business. Adj. EBITDA margins have risen above 9%, and been sustained, driving excellent 30%+ ROCE and cash generation. In this detailed report we review the attractive investment thesis for McBride and conclude its current low valuation is an anomaly. We initiate coverage with a 235p Fair Value equating to 10x PER, 6x EV/EBITDA and a c.6% FCF yield (cal 2026).As a result of the group’s improved profitability, ROCE has jumped to 32%-33% and net debt has fallen to just 1.2x EBITDA. In addition, dividends have been reinstated, starting at 3p for FY25. Yet despite this, McBride is trading on only c.5x PER. This is at odds with the wider consumer sector where we see stocks with similar metrics trading on at least 10x PER. Hence we believe that as confidence in the sustainability of McBride’s profits grows, its shares will re-rate significantly.
McBride is engaged as a supplier of Private Label Household and Personal Care products. Co. develops and manufactures products for the majority of retailers and main brand owners throughout the U.K., Europe and Asia. Co. operates across 12 countries, with 17 manufacturing facilities. Co. has two division: Household, which activities are managed by four regional teams: the U.K., North, South and East and also the U.K. business imports materials used for manufacturing from the European Union; and Personal Care and Aerosols, which comprises the personal care liquids, skincare and aerosols businesses.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.