McBride plc - sustained private label profitability
McBride’s H126 results confirm that for the third year running, demand for private label cleaning products remains at high levels, with private label volumes +0.9%, and Adj. EBIT margin a robust 6.6%.Management has confirmed that H2 has started in-line with expectations and that new contract wins across divisions underpin the positive outlook for H226 and into FY27E. Material costs are expected to remain flat and, with overhead costs under control, management is confident in meeting consensus expectations for FY26E of c.£64.7m Adj. EBIT.
Given the group’s improved profitability, ROCE has sustained a jump to 30%+ (30.8% in H1). Yet, McBride is trading on only c.6.6x cal 27 PER, significantly below the rest of the consumer sector.
We see scope for a significant rerating and, as we move to 2027 valuation metrics, we raise our Fair Value from 235p to 245p per share (equivalent to a c.6% cal 27 FCF yield).
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.
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