Personal care products manufacturer McBride (MCB) issues its second profit warning this year. The company says full year pre-tax profit will be marginally lower than analyst expectations.
Shares in the company are down 6% to 124p.
In a trading update for the year to 30 June, weaker than expected sales in May and June dragged on profitability according to McBride.
Lower sales are also anticipated to lead to increased losses in the personal care and aerosols division.
This is the second warning since January. Then the company blamed weak trading in its European personal care and aerosols division alongside ongoing cost inflation.
Like-for-like revenues for the household segment grew 3.8% in the first half of 2018.
One of the headwinds for McBride is a continued decline in household sales in France, although some of this has been offset by better than forecast sales in Germany and from its Danish operation Danlind.
Input costs are stable, but higher volumes in the last quarter added additional operating costs as higher distribution, warehousing costs and short-term inefficiencies took their toll.
BUSINESS SALE AGREED
The company announces separately that as part of its transformation programme, it is to sell its European personal care liquids business to Royal Sanders Group for £12.5m.
Numis analyst Damian McNeela reduced pre-tax profit forecasts by 8.5% to £31.7m in 2018 and by 4.9% to £38.8m in 2019.
He says the sales of personal care liquids is positive as the business was generating a loss of £2.8m based on sales of £56m in 2018.
Jefferies analyst Martin Deboo believes a lot of bad news is now priced in by the market. Since the start of 2018, shares in McBride have nearly halved from 226p to 124p.
