McBride shares slump after weak quarter

24th Jun 2010 07:45

Shares in private label personal care products supplier McBride slumped after it said it expects full year revenue growth to be flat after a weak final quarter and as raw material prices continue to rise.The Buckinghamshire-based firm said fourth quarter revenue is expected to be 3% lower than prior year after weak retail sales across Europe and promotional activity in the UK.The group also announced that it has started a further re-structuring project in the UK, which is expected to deliver annualised cost savings of £4m with cash expenditure of £4m."The cost of this initiative will be treated as an exceptional item, resulting in a total exceptional charge for 2009/10 in the region of £14m," it explained.McBride added that key raw materials prices have increased by 4% by the end of June compared with December 2009."We believe our markets will remain volatile and there remains a significant risk that our material costs will rise by a further 4-6% during the next financial year," it said.It added, "Our business model is designed to manage raw material increases effectively, although inevitably there will be a delay before recovery from customers."Net debt for the year ended 30 June 2010 is expected to be in line with expectations. McBride also announced that a new five-year €175m revolving credit facility agreement has been concluded with its banks on attractive terms.