Broker snap: McBride's pricing a concern for Peel Hunt

7th Jul 2011 12:35

As a result of a tougher pricing environment for McBride, Peel Hunt slashed its profit forecasts for the year ending 2012.The firm - which supplies household and personal products for retailers such as Carrefour, Tesco and Metro, to sell under their own names - secured the price increases it expects in the year ending 2011, with sales and profits in line with expectations, Peel Hunt said.However, "we are reducing our FY2012E [forecasts] as we expect volumes to be lower than expected, due to the tough market conditions and as the company expects to exit non-profitable business," said analyst Charles Hall. "We have reduced our forecast for sales growth from 5% to 2%. In addition, pricing has become tougher and the company is continuing to see increases in material prices," he said.The broker now expects adjusted pre-tax profit for the 12 months ending 30 June 2012 to be £24m, down from the previous estimate of £28.6m.While a hold rating is maintained, the target price is lowered from 160p to 140p.BC