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Oven Pride-maker McBride feels heat from cost pressures

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By Reuters
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By Aditi Sebastian and Yadarisa Shabong

– The boss of British cleaning products maker McBride warned an “extraordinary” rise in the cost of raw materials such as cardboard and solvents would last for “quite some time” as the company reported an 18% fall in annual earnings on Tuesday.

Companies from Unilever to McDonald’s have been struggling in Britain with higher costs and staff shortages as surging input prices and disruptions linked to Brexit and the coronavirus pandemic have hit supply chains.

McBride, which makes and distributes brands including Oven Pride and Surcare, warned last month that higher costs and a lack of lorry drivers would push its profits for fiscal 2021-2022 down by as much as 65%.

“(McBride is) trying to instigate price increases … just because we cannot sustain this level of input cost without some form of margin recovery, we see this (material cost rise) lasting for quite some time.” Chief Executive Chris Smith told Reuters on Tuesday.

Smith said the impact of the price changes would “build in the next month or two” as McBride negotiates with customers, such as big retailers and supermarkets.

The company, which sells more than 1 billion products each year and usually dispatches more than 350 trucks from its factories every day, said it expected raw material prices to peak in the autumn of this year.

It is planning to make about 10 million pounds of savings in its new financial year to cope with the higher costs.

The company reported adjusted pretax profit of 19.9 million pounds ($27.5 million) for the year ended June 30, down from 24.2 million pounds a year earlier.

Its shares were down about 1% at 0920 GMT.

($1 = 0.7232 pounds)