McBride plc
('McBride' or the
'Group')
Strong first half performance
underpinned by continued consumer shift to private
label
Full year profit expectations
raised
27
February 2024
McBride, the leading European
manufacturer and supplier of private label and contract
manufactured products for the domestic household and
professional cleaning/hygiene markets, announces its unaudited
interim results for the six months ended 31 December 2023 (the
'period').
Improved profitability, underpinned by continued volume
growth
· Ongoing consumer and retailer shift to
high-quality private label products supported further growth across
the Group
· Total volume growth of 6.4%, with private
label volumes increasing by 10.1%, taking further market share in a
rising private label market
· Encouraging volume progress in strategic
focus areas of Germany and laundry, growing 10.5% and 9.8%
respectively, ahead of overall market
· Strong operational delivery supporting
higher volumes, together with the impact of prior year pricing
actions and raw material input costs stability driving margin
recovery
· Profitable performance across all five
divisions
· Transformation programme on track to
deliver target of £50m net benefits over five years
· Group formally committed to the Science
Based Targets initiative (SBTi) in December 2023 as part of its
wider sustainability agenda
Financial highlights
· Group revenue of £468.0m (2022: £426.3m),
up 9.8% (9.9% at constant currency(1))
· Adjusted operating profit(2) of
£30.5m (2022: loss of £1.3m)
· Adjusted profit before
taxation(2) of £22.4m (2022: loss of £7.9m)
· Profit before taxation of £17.4m (2022:
loss of £20.0m)
· Net debt(2) decreased to £145.7m
(30 June 2023: £166.5m), liquidity increased to £85.0m (30 June
2023: £59.3m)
· Negotiated termination of the 'upside
sharing' mechanism announced on 25 October 2023
Optimistic outlook underpinned by strong market
dynamics
· Demand levels in early months of 2024 in
line with the first half; favourable trends for private label
markets expected to continue throughout 2024
· New contract wins expected to start
deliveries in the second half of 2024
· Inflationary pressures remain, especially
relating to employment, general supplies, financing costs and
energy; geopolitical tensions create further inflationary and
supply chain risks
· Full year adjusted operating profit now
expected to be 10-15% ahead of previous internal
expectations
· Net debt/adjusted EBITDA(2) now
expected to be below 2x by 30 June 2024
Chris Smith, Chief Executive Officer,
commented:
"McBride has continued with its positive momentum in the first
half of this financial year. It is pleasing to see all five
divisions continuing to grow on a constant currency basis,
supporting our customers with high-quality products to meet the
consumer shift to private label. This strong performance is a
result of the commitment across all the business teams to provide
our customers with highest quality, best value products and the
strongest innovation options in the sector.
Our focus on operational delivery will see our second half
year deliver ahead of our plan with full year adjusted operating
profit now expected to be 10-15% ahead of previous internal
expectations.
As
we progress our Transformation programme, with specific initiatives
to enhance McBride's capabilities and tools for the future, we
remain focused on performance delivery today. This focus, together
with our continued drive to reduce debt levels, will ensure McBride
is well positioned to achieve further progress in the near and
medium term and we look to the future with
confidence."
|
|
Half
year to
|
Half
year
to
|
|
Constant
|
|
|
31 Dec
|
31
Dec
|
Reported
|
currency
|
|
£m unless otherwise
stated
|
2023
|
2022
|
change
|
change(1)
|
|
Group revenue
|
468.0
|
426.3
|
9.8%
|
9.9%
|
|
Adjusted operating
profit/(loss)(2)
|
30.5
|
(1.3)
|
31.8
|
32.0
|
|
Operating profit/(loss)
|
29.5
|
(2.6)
|
32.1
|
|
|
Adjusted profit/(loss) before
taxation(2)
|
22.4
|
(7.9)
|
30.3
|
|
|
Profit/(loss) before
taxation
|
17.4
|
(20.0)
|
37.4
|
|
|
Adjusted diluted earnings/(loss) per
share(3)
|
9.1p
|
(4.2)p
|
13.3p
|
|
|
Diluted earnings/(loss) per
share
|
7.0p
|
(9.7)p
|
16.7p
|
|
|
Net debt
|
145.7
|
169.4
|
(23.7)
|
|
|
Adjusted return on capital
employed(2)
|
22.8%
|
(5.5)%
|
28.3ppts
|
|
(1)Comparatives translated at
six months to 31 December 2023 exchange rates.
(2)Refer to note 2 for
definition.
(3)See note
6.
Analyst and investor presentation
A presentation for analysts and
investors will be held at 10.00am today at the office of Instinctif
Partners.
Capital Markets Day
McBride will be hosting a Capital
Markets Day for analysts and investors at 11.00am on Wednesday 13
March 2024 at the office of Instinctif Partners. To register your
interest, please contact McBride@instinctif.com.
|
McBride plc
|
0161 203 7401
|
|
Chris Smith, Chief Executive
Officer
|
|
|
Mark Strickland, Chief Financial
Officer
|
|
|
|
|
|
Instinctif Partners
|
0207 457 2020
|
|
Guy Scarborough
Vivian Lai
|
|
This announcement contains forward-looking statements about
financial and operational matters. These statements are based on
the current views, expectations, assumptions and information of
management, and are based on information available to the
management as at the date of this announcement. Because they relate
to future events and are subject to future circumstances, these
forward-looking statements are subject to unknown risks,
uncertainties and other factors which may not have been in
contemplation as at the date of the announcement. As a result,
actual financial results, operational performance and other future
developments could differ materially from those envisaged by the
forward-looking statements. Neither McBride plc nor its affiliates
assume any obligations to update any forward-looking
statements.
McBride plc gives no express or implied warranty,
representation, assurance or undertaking as to the impartiality,
accuracy, completeness, reasonableness or correctness of the
information, opinions or statements expressed in the announcement
or any other information (whether written or oral) supplied as part
of it. Neither McBride plc, its affiliates nor its officers,
employees or agents will accept any responsibility or liability of
any kind for any damage or loss arising from any use of this
announcement or its contents. All and any such responsibilities and
liabilities are expressly disclaimed. In particular, but without
prejudice to the generality of the foregoing, no representation,
warranty, assurance or undertaking is given as to the achievement
or reasonableness of any future projections, forward-looking
statements about financial and operational matters, or management
estimates contained in the announcement.
This announcement does not constitute an offer or invitation
to underwrite, subscribe for, or otherwise acquire or dispose of
any McBride plc shares or other securities, or of any of the
businesses or assets described in the announcement, and the
information contained herein cannot be relied upon as a guide to
future performance.
Overall business performance
McBride delivered a much-improved
performance for the first six months of the financial year, with
all divisions profitable. At a Group level, revenue increased 9.8%
to £468.0 million, with profit before taxation of £17.4 million
(2022: loss of £20.0m).
The Group has built on the momentum
in the second half of the last financial year with the current
period benefitting from continued strong demand for McBride's
high-quality private label products, as retailers look to support
their customers as they continue to transition to better quality
products to mitigate cost-of-living pressures. Private label share
in the overall household cleaning products market in Europe is
estimated to have risen to c.35% by volume, up over 4ppts since
2021. In the period, McBride private label volumes are up 10.1%. In
its core strategic focus areas of Germany and laundry, McBride
achieved pleasing volume growth of 10.5% and 9.8% respectively. The
Group's ability to deliver its strong private label performance
continues to be driven by several key factors. The execution of
McBride's strategy to embed specialism and focus in the divisional
teams, together with a commitment to improving customer service
levels and maintaining consistent product quality, has strengthened
McBride's position as a supplier of choice and led to further
contract wins.
Gross margin continued to recover as
a result of pricing actions implemented in the last financial year,
helping to offset the input cost inflation seen by the business in
previous periods. During the period, raw material input costs
remained relatively stable but inflationary pressures remain from
employment, general supplies, energy and financing costs. The Group
continues to monitor closely risks from global supply chain
volatility arising from geopolitical tensions.
Service levels on customer
deliveries have significantly improved year on year, following a
series of targeted improvement areas, including supply route and
carrier changes. Additionally, physical changes to the business'
current warehouse network have been successfully completed and a
review is in progress to ensure future alignment to strategic
growth plans.
Reducing levels of debt is a key
priority for the business and further progress was made in the
period with net debt £20.8 million lower at £145.7 million. This
reduction resulted from improved profit levels and good operating
capital management.
McBride's Transformation agenda is
progressing at pace, targeting £50 million net benefits over the
next five years. The programme is being led by a standalone team to
ensure successful execution of its objectives. The implementation
of the Commercial Excellence, Service Excellence and SAP programmes
in particular will be key factors in driving McBride's future
success.
Outlook
The early part of the second half of
the financial year has seen demand levels continue in line with
trends seen in the first six months, and the Group expects to see
the favourable trends for private label markets continue throughout
2024. In addition, a number of new contract wins are expected to
commence during the next six months, adding further volumes. As a
result the Group now expects full year adjusted operating profit to
be ahead of previous internal expectations by 10-15%.
The rampant inflation seen in recent
years is not expected to return at this stage, therefore the Group
expects input costs to remain stable for the coming period.
However, geopolitical tensions could present further inflationary
and supply chain risks.
The Group now anticipates that net
debt/adjusted EBITDA(1) will be below 2x by 30 June
2024.
(1)Refer to note 2 for
definition.
Divisional performance review
|
|
Half year
to
|
Half year
to
|
|
Constant
|
|
|
31 Dec
|
31
Dec
|
Reported
|
currency
|
|
|
2023
|
2022
|
change
|
change
|
|
Revenue
|
£m
|
£m
|
%
|
%
|
|
Liquids
|
266.4
|
237.7
|
12.1%
|
11.8%
|
|
Unit Dosing
|
116.5
|
111.4
|
4.6%
|
4.5%
|
|
Powders
|
47.2
|
42.7
|
10.5%
|
10.5%
|
|
Aerosols
|
25.4
|
21.3
|
19.2%
|
19.2%
|
|
Asia Pacific
|
12.5
|
13.2
|
(5.3)%
|
4.2%
|
|
Group
|
468.0
|
426.3
|
9.8%
|
9.9%
|
|
|
Half year
to
|
Half year
to
|
|
Constant
|
|
|
31 Dec
|
31
Dec
|
Reported
|
currency
|
|
|
2023
|
2022
|
change
|
change
|
|
Adjusted operating profit/(loss)
|
£m
|
£m
|
£m
|
£m
|
|
Liquids
|
22.8
|
0.2
|
22.6
|
22.7
|
|
Unit Dosing
|
7.9
|
2.2
|
5.7
|
5.4
|
|
Powders
|
3.2
|
(1.2)
|
4.4
|
4.5
|
|
Aerosols
|
0.5
|
-
|
0.5
|
0.6
|
|
Asia Pacific
|
0.7
|
0.8
|
(0.1)
|
(0.1)
|
|
Corporate
|
(4.6)
|
(3.3)
|
(1.3)
|
(1.1)
|
|
Group
|
30.5
|
(1.3)
|
31.8
|
32.0
|
Liquids performance review
Liquids revenue grew by 11.8% on a
constant currency basis, driven by private label volumes, which
were up 10.7%. Strong demand for private label continues to be
driven by consumers switching from branded products to high-quality
private label products. This positive performance was also
supported by net contract wins secured in the last financial year,
particularly in the German market. Laundry and dishwash maintained
good momentum reporting revenue growth of 20.0% and 11.1%
respectively.
The division delivered an adjusted
operating profit of £22.8 million, which was £22.7 million higher
on a constant currency basis, mostly as a result of volume growth
and supported by improved margins as the business benefitted from
the effect of last year's pricing actions agreed with
customers.
Service levels continued to improve,
which aligned with retailers' primary focus on consistent supply
and product availability.
Unit Dosing performance review
Unit Dosing revenue increased 4.5%
on a constant currency basis to £116.5 million, supported in
particular by volume growth in dishwash. Private label volume
growth of 7.4% was partly offset by a reduction in contract
manufacturing volumes. The division generated an adjusting
operating profit of £7.9 million, an increase of £5.7 million
compared to the prior year period.
The division made significant
investments to deliver new product launches in the period, in
addition to investing in new product launches anticipated for the
first half of the next financial year. Furthermore, capacity
increases for dishwasher tablets and laundry capsules are scheduled
to go on stream in the second half of the current financial year,
supporting growth and service improvements for specific product
formats, in line with consumer demand.
The division will continue to focus
on meeting the trend for higher doses per consumer unit with new
product launches focusing on compacted products and leveraging
sustainable packaging.
Powders performance review
Powders revenue grew by 10.5% on a
constant currency basis to £47.2 million, with adjusted operating
profit of £3.2 million (2022: loss of £1.2m).
In the period, Powders saw a decline
in private label sales as a result of a sole supply account moving
to dual supply, but these volumes were compensated by improved
sales to contract manufacturing, primarily in the professional
cleaning sector. Total volumes were lower in the period, but the
impact of prior year pricing actions resulted in revenue
growth.
While the market remains
competitive, Powders' performance demonstrates the effectiveness of
the division's strategy and its ability to adapt to customers'
needs. Powders continues to be well placed to deliver volume growth
and remains focused on achieving further efficiencies to offset
potential cost inflation.
Aerosols performance review
Aerosols revenue grew by 19.2% on a
constant currency basis to £25.4 million, making it McBride's
fastest growing division. The division delivered an adjusted
operating profit in the period of £0.5 million (2022:
£nil).
This positive performance was driven
by accelerating growth in Germany and Iberia with several tender
wins. Within the division, private label and personal care were top
performers, with private label sales increasing by 27.8%. The
division also introduced several innovative changes to its
packaging and formulations, which improved cost efficiency and made
its products more sustainable.
Aerosols remains committed to
building on its existing strong relationships with customers and
continuing to drive operational excellence.
Asia Pacific performance review
Asia Pacific saw revenue increase by
4.2% on a constant currency basis to £12.5 million. The division
delivered adjusted operating profit of £0.7 million (2022:
£0.8m).
Expanding volumes through the new
site in Malaysia is the key priority for the business. In the
period, the local team has engaged positively with new contract
manufacturing customers and successfully launched a number of new
products in Malaysia. The team is in discussions with several new
partners in Vietnam and also delivered its first household cleaning
products in the Australian market.
Group operating results
Operating profit of £29.5 million
was a significant improvement on the prior year (2022: loss of
£2.6m). Adjusted operating profit of £30.5 million was also
significantly better than the prior year (2022: loss of £1.3m),
whilst the adjusted operating profit margin increased to 6.5%
(2022: (0.3)%).
Group EBITDA
Half-year adjusted
EBITDA(1) of £40.9 million (2022: £8.8m) reflected the
Group's strong trading performance.
|
|
Half year
to 31 Dec
2023
|
Half
year
to 31
Dec
2022
|
Year
ended
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Operating profit/(loss)
|
29.5
|
(2.6)
|
10.3
|
|
Exceptional items in operating
profit/(loss) (note 4)
|
-
|
-
|
0.8
|
|
Amortisation of intangibles (note
8)
|
1.0
|
1.3
|
2.4
|
|
Adjusted operating profit/(loss)
|
30.5
|
(1.3)
|
13.5
|
|
Depreciation of property, plant and
equipment (note 8)
|
8.6
|
8.2
|
16.8
|
|
Depreciation of right-of-use assets
(note 8)
|
1.8
|
1.9
|
3.8
|
|
Adjusted EBITDA
|
40.9
|
8.8
|
34.1
|
(1)Definition and
reconciliation provided in note 16.
Exceptional items
Total exceptional items of £4.0
million were charged to finance costs during the period (2022:
£10.8m). The costs in the period relate to the Group's financing
confirmation, with the largest driver being £3.5 million of finance
costs recognised in October 2023 when the Group agreed with its
lender group an early settlement of the upside sharing mechanism.
Costs incurred in the prior period related to the independent
business review and refinancing of the Revolving Credit Facility
(RCF).
Finance costs
At £8.1 million, adjusted finance
costs(1) were £1.5 million higher than the prior period
(2022: £6.6m), driven by revised terms under the Group's RCF
agreement announced on 29 September 2022 and increases to market
interest rates.
(1)Total finance costs less
finance costs relating to exceptional items.
Taxation
Reported profit before taxation is
£17.4 million (2022: loss of £20.0m). Adjusted profit before
taxation is £22.4 million (2022: loss of £7.9m). The tax charge on
adjusted profit before taxation for the year is £6.0 million (2022:
£0.7m credit) and the effective tax rate is 27% (2022:
9%).
The total tax charge is £4.7 million
(2022: £3.2m credit) and the statutory effective tax rate for the
period is 27% (2022: 16%).
Earnings per share
On an adjusted basis, basic earnings
per share was 9.5 pence (2022: loss of 4.2p). Total adjusted
diluted earnings per share was 9.1 pence (2022: loss of 4.2p), with
basic earnings per share at 7.3 pence (2022: loss of
9.7p).
Payments to shareholders
Under the amended terms of the RCF,
McBride plc may not, except with the consent of its lender group,
declare, make or pay any dividend or distribution to its
shareholders prior to an 'exit event', being a change of control;
refinancing of the RCF in full; prepayment and cancellation of the
RCF in full; or upon the termination date of the RCF, being May
2026. Hence, the Board is not recommending an interim dividend for
the period.
Cash flow and balance sheet
|
|
Half year
to
31 Dec
2023
|
Half year
to
31
Dec
2022
|
Year
ended
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Adjusted EBITDA
|
40.9
|
8.8
|
34.1
|
|
Working capital excluding provisions
and pensions
|
8.6
|
12.2
|
7.1
|
|
Share-based payments and loss on
disposal of property, plant and equipment
|
0.9
|
0.5
|
0.8
|
|
Non-exceptional impairment of
property, plant and equipment
|
0.2
|
-
|
-
|
|
Pension deficit reduction
contributions
|
(2.0)
|
(2.0)
|
(4.0)
|
|
Free cash flow(1)
|
48.6
|
19.5
|
38.0
|
|
Exceptional items
|
(0.5)
|
(0.8)
|
(1.4)
|
|
Interest on borrowings and lease
liabilities less interest receivable
|
(6.2)
|
(3.6)
|
(11.4)
|
|
Refinancing costs paid
|
(5.6)
|
(10.6)
|
(12.3)
|
|
Taxation (paid)/received
|
(2.6)
|
0.1
|
(1.8)
|
|
Net
cash generated from operating activities
|
33.7
|
4.6
|
11.1
|
|
Net capital
expenditure(2)
|
(10.5)
|
(6.8)
|
(16.3)
|
|
Debt financing activities
|
(10.4)
|
5.3
|
2.6
|
|
Settlement of derivatives
|
(0.4)
|
(0.1)
|
0.4
|
|
Net
increase/(decrease) in cash and cash equivalents
|
12.4
|
3.0
|
(2.2)
|
Free cash flow in the period was
£48.6 million (2022: £19.5m).
Working capital inflows of £8.6
million (2022: £12.2m) remained strong as the Group continued its
focus on working capital management.
During the period, net capital
expenditure was £10.5 million (2022: £6.8m) in cash terms. The
increase has resulted from the easing of restrictions on cash
outflows that was required to manage liquidity in recent years. The
Group continues to prioritise capital expenditure to underpin its
strategy of focused investment in growth categories.
The Group's net assets increased to
£43.6 million (30 June 2023: £37.1m). Gearing(3)
decreased to 74% (30 June 2023: 78%) as net debt levels reduced
significantly. Adjusted return on capital employed of 22.8% was
higher than the prior year (2022: (5.5)%) driven by the significant
improvement in profitability.
(1)Refer to note 16 for
definition.
(2) Net capital expenditure is
capital expenditure including capital payments on lease liabilities
less proceeds from sale of fixed assets.
(3)Gearing represents net debt
divided by the average of current and prior year year-end capital,
being total equity plus net debt.
Bank facilities and net debt
Net debt at 31 December 2023 was
£20.8 million lower than the prior year end at £145.7 million (30
June 2023: £166.5m).
Throughout the period, the Group had
a €175 million multi-currency, sustainability-linked RCF. This
facility ensures the Group continues to have significant levels of
liquidity headroom.
At 31 December 2023,
liquidity(1) was £85.0 million (30 June 2023: £59.3m).
Liquidity throughout the period remained comfortably above the
RCF's minimum liquidity covenant of £15 million.
At 31 December 2023, the net debt
cover ratio as defined under the RCF funding arrangements was 1.2x
(30 June 2023: 2.9x) and the interest cover was 4.7x (30 June 2023:
2.7x). The amount undrawn on the facility was €73.9 million (30
June 2023: €46.7m).
At 31 December 2023, the Group had a
number of facilities whereby it could borrow against certain of its
trade receivables. In the UK, the Group had a £20 million facility,
committed until May 2026. In Germany, the Group had a €40 million
facility, committed until May 2026. In France, Belgium and Spain,
the Group had an unlimited facility, committed until May 2026. The
Group can borrow from the provider of the relevant facility up to
the lower of the facility limit and the value of the
receivables.
(1)Refer to note 2 for
definition.
Pensions
In the UK, the Group operates a
defined benefit pension scheme, which is closed to new members and
future accrual.
The deficit in the Robert McBride
Pension Fund ('the Fund') increased during the period to £30.6
million (30 June 2023: £24.7m). The main driver of the movement was
a significant reduction in corporate bond yields. This led to a
decrease in the discount rate used to value the Fund's liabilities,
which in turn led to an increase in the value of the liabilities.
This was partially offset by positive asset returns, the Group's
deficit reduction contributions of £2.0 million and a decrease in
the assumption used for future inflation.
Following the triennial valuation at
31 March 2021, the Group and Trustee agreed a new deficit reduction
plan based on the scheme funding deficit of £48.4 million. The
current level of deficit contributions of £4.0 million per annum is
payable until 31 March 2028.
Separately, the Group has agreed
that, from 1 October 2024, conditional profit-related contributions
of £1.7 million per annum may be paid over the period to 31 March
2028. If adjusted operating profit exceeds £35 million, additional
annual deficit contributions of £1.7 million will be due over the
following year. If adjusted operating profit is below £30 million
then no profit-related contributions will be due in the following
year. If reported adjusted operating profit is between £31 million
and £35 million, a proportion of the £1.7 million contribution will
be due over the following year, with incremental increases of £0.34
million of additional contributions for each whole £1 million of
adjusted operating profit in excess of £30 million. Finally, the
Group has agreed to make additional contributions such that the
total deficit contributions in any year match the value of any
dividends paid in that same year. The funding arrangements and
recovery plan will be reviewed by the Group and Trustee as part of
the 31 March 2024 valuation.
The Group has other post-employment
benefit obligations outside the UK that amounted to £2.0 million
(30 June 2023: £1.9m).
Environmental, social and governance (ESG)
McBride works to integrate the
principles of long‑term environmental and social sustainability
within its business strategy. The approach to sustainability is
underpinned by an analysis of the ESG issues that are most relevant
and important in the context of McBride's business activities. The
Group recognises it must tackle climate change to remain viable
and, as such, places ESG issues at the core of its approach to
sustainability.
McBride continues to report progress
via an ESG dashboard and deliver on the 2025 targets for operations
and product sustainability. The Group continues to make progress on
improving energy efficiency, reducing waste to landfill and
increasing the proportion of renewable electricity used in its
operations.
McBride's corporate carbon footprint
has been measured for three consecutive years covering Scope 1, 2
and 3 emissions. During the period, the Group has established
science-based targets and formally committed to the Science Based
Target initiative (SBTi). These targets will guide efforts and
ensure McBride's actions are aligned to the latest scientific
understanding on climate change.
Key initiatives undertaken in the
period to support the goal of creating a positive social impact for
colleagues, stakeholders and local communities have
been:
· running diversity, equity and inclusion workshops
for senior leaders across the business;
· inviting all European colleagues to provide their
feedback in an engagement survey;
· building programmes of social activities in all
locations; and
· launching the 'McBride Gives' volunteering scheme
in Poland.
During the period, McBride has also started its journey toward
compliance with the forthcoming EU Corporate Sustainability Due
Diligence Directive (CSDDD). The Group is building internal
cross-functional alignment and understanding of CSDDD requirements
and what this means for McBride and its supply chains. The aim is
to achieve clarity on the high-level ESG risks and impacts that are
the most significant to supply chains, and to carry out targeted
supplier risk assessment and engagement. In relation to potential
social and environmental issues known to affect specific raw
material supply chains, McBride will conduct a deeper-dive risk
assessment and due diligence. The results of such risk assessments
and supplier screenings will be integrated into existing supplier
management systems and processes.
Principal risks and uncertainties
The Group is subject to risk factors
both internal and external to its business and has a
well-established set of risk management procedures. The risks and
uncertainties that the Directors believe could have the most
significant impact on the Group's business are:
· changing market, customer and consumer
dynamics;
· disruptions to systems and processes;
· financing risks;
· supply chain resilience;
· safe and high-quality products;
· health and safety;
· climate change and environmental
concerns;
· challenges in attracting and retaining
talent;
· increased regulation; and
· economic, political and macro environment
instability.
Responsibility statement
The Directors confirm that to the
best of their knowledge:
• The condensed
set of financial statements has been prepared in accordance with
UK-adopted IAS 34 'Interim Financial Reporting' and gives a true
and fair view of the assets, liabilities, financial position and
profit or loss of the issuer, or the undertakings included in the
consolidation as a whole as required by DTR 4.2.4 of the Disclosure
and Transparency Rules.
• The interim
management report includes a fair review of the information
required by:
(a) DTR 4.2.7 of the
Disclosure and Transparency Rules, being an indication of important
events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and
uncertainties for the remaining six months of the year;
and
(b) DTR 4.2.8 of the
Disclosure and Transparency Rules, being related party transactions
that have taken place in the first six months of the current
financial year and that have materially affected the financial
position or performance of the entity during that period; and any
material changes in the related party transactions described in the
last annual report that could do so.
Chris
Smith
Mark Strickland
Chief Executive
Officer
Chief Financial Officer
27 February 2024
Condensed interim consolidated income
statement
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
|
2023
|
2022
|
2023
|
|
|
Note
|
£m
|
£m
|
£m
|
|
Revenue
|
3
|
468.0
|
426.3
|
889.0
|
|
Cost of sales
|
|
(297.1)
|
(311.2)
|
(625.4)
|
|
Gross profit
|
|
170.9
|
115.1
|
263.6
|
|
Distribution costs
|
|
(40.8)
|
(38.5)
|
(77.9)
|
|
Administrative costs
|
|
(96.5)
|
(77.7)
|
(171.6)
|
|
Impairment of trade
receivables
|
|
(3.6)
|
(1.5)
|
(3.5)
|
|
Loss on disposal of property, plant
and equipment
|
|
(0.3)
|
-
|
(0.3)
|
|
Impairment of property, plant and
equipment
|
|
(0.2)
|
-
|
-
|
|
Operating profit/(loss)
|
|
29.5
|
(2.6)
|
10.3
|
|
Finance costs
|
|
(12.1)
|
(17.4)
|
(25.4)
|
|
Profit/(loss) before taxation
|
|
17.4
|
(20.0)
|
(15.1)
|
|
Taxation
|
5
|
(4.7)
|
3.2
|
3.6
|
|
Profit/(loss) for the period
|
|
12.7
|
(16.8)
|
(11.5)
|
|
Earnings/(loss) per ordinary share attributable to the owners
of the parent during the period
|
|
|
|
|
|
|
|
|
|
Basic earnings/(loss) per
share
|
6
|
7.3p
|
(9.7)p
|
(6.6)p
|
|
Diluted earnings/(loss) per
share
|
6
|
7.0p
|
(9.7)p
|
(6.6)p
|
Condensed interim consolidated statement of comprehensive
income
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
|
2022
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Profit/(loss) for the period
|
12.7
|
(16.8)
|
(11.5)
|
|
Other comprehensive income/(expense)
|
|
|
|
|
Items that may be reclassified to
profit or loss:
|
|
|
|
|
Currency translation differences of
foreign subsidiaries
|
1.0
|
2.6
|
(0.6)
|
|
(Loss)/gain on net investment
hedges
|
(0.6)
|
(0.5)
|
0.4
|
|
(Loss)/gain on cash flow hedges in
the period
|
(1.5)
|
3.4
|
3.7
|
|
Cash flow hedges transferred to
profit or loss
|
(0.8)
|
(0.5)
|
(1.4)
|
|
Taxation relating to the items
above
|
0.6
|
(0.7)
|
(0.4)
|
|
|
(1.3)
|
4.3
|
1.7
|
|
Items that will not be reclassified
to profit or loss:
|
|
|
|
|
Net actuarial loss on
post-employment benefits
|
(7.3)
|
(10.3)
|
(14.1)
|
|
Taxation relating to item
above
|
1.8
|
2.6
|
3.5
|
|
|
(5.5)
|
(7.7)
|
(10.6)
|
|
Total other comprehensive expense
|
(6.8)
|
(3.4)
|
(8.9)
|
|
Total comprehensive income/(expense)
|
5.9
|
(20.2)
|
(20.4)
|
Condensed interim consolidated balance sheet
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
As at
|
As
at
|
As
at
|
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
|
2023
|
2022
|
2023
|
|
|
Note
|
£m
|
£m
|
£m
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
8
|
19.8
|
19.8
|
19.7
|
|
Other intangible assets
|
8
|
6.1
|
6.5
|
6.5
|
|
Property, plant and
equipment
|
8
|
115.8
|
121.1
|
117.8
|
|
Derivative financial
instruments
|
9
|
1.6
|
3.8
|
4.5
|
|
Right-of-use assets
|
8
|
8.7
|
9.9
|
8.5
|
|
Deferred tax assets
|
|
45.3
|
32.9
|
41.6
|
|
|
|
197.3
|
194.0
|
198.6
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
109.4
|
128.2
|
121.5
|
|
Trade and other
receivables
|
|
147.7
|
131.1
|
145.7
|
|
Current tax asset
|
|
2.0
|
5.3
|
2.3
|
|
Derivative financial
instruments
|
9
|
0.8
|
1.5
|
0.6
|
|
Cash and cash equivalents
|
10
|
14.3
|
8.0
|
1.6
|
|
|
|
274.2
|
274.1
|
271.7
|
|
Total assets
|
|
471.5
|
468.1
|
470.3
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
215.5
|
211.9
|
219.6
|
|
Borrowings
|
9
|
63.2
|
47.5
|
49.3
|
|
Lease liabilities
|
9
|
3.3
|
3.8
|
3.5
|
|
Derivative financial
instruments
|
9
|
0.1
|
0.2
|
1.8
|
|
Current tax liabilities
|
|
10.3
|
4.0
|
6.7
|
|
Provisions
|
|
2.2
|
2.8
|
2.7
|
|
|
|
294.6
|
270.2
|
283.6
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
|
9
|
87.6
|
119.3
|
109.8
|
|
Lease liabilities
|
9
|
5.9
|
6.8
|
5.5
|
|
Pensions and other post-employment
benefits
|
11
|
32.6
|
24.7
|
26.6
|
|
Provisions
|
|
2.6
|
3.9
|
2.6
|
|
Deferred tax liabilities
|
|
4.6
|
5.9
|
5.1
|
|
|
|
133.3
|
160.6
|
149.6
|
|
Total liabilities
|
|
427.9
|
430.8
|
433.2
|
|
Net
assets
|
|
43.6
|
37.3
|
37.1
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Issued share capital
|
|
17.4
|
17.4
|
17.4
|
|
Share premium account
|
|
68.6
|
68.6
|
68.6
|
|
Other reserves
|
|
77.6
|
81.5
|
78.9
|
|
Accumulated losses
|
|
(120.0)
|
(130.2)
|
(127.8)
|
|
Total equity
|
|
43.6
|
37.3
|
37.1
|
Condensed interim consolidated cash flow
statement
|
|
|
Unaudited
Half year
to
31 Dec
2023
|
Unaudited
Half year
to
31
Dec
2022
(restated)(1)
|
Audited
Year
ended
30
Jun
2023
|
|
|
Note
|
£m
|
£m
|
£m
|
|
Operating activities
|
|
|
|
|
|
Profit/(loss) before
taxation
|
|
17.4
|
(20.0)
|
(15.1)
|
|
Finance costs
|
|
12.1
|
17.4
|
25.4
|
|
Exceptional items excluding finance
costs
|
4
|
-
|
-
|
0.8
|
|
Share-based payments
charge
|
|
0.6
|
0.5
|
0.5
|
|
Depreciation of property, plant and
equipment
|
8
|
8.6
|
8.2
|
16.8
|
|
Depreciation of right-of-use
assets
|
8
|
1.8
|
1.9
|
3.8
|
|
Loss on disposal of property, plant
and equipment
|
|
0.3
|
-
|
0.3
|
|
Amortisation of intangible
assets
|
8
|
1.0
|
1.3
|
2.4
|
|
Impairment of property, plant and
equipment
|
|
0.2
|
-
|
-
|
|
Operating cash flow before changes in working capital and
exceptional items
|
|
42.0
|
9.3
|
34.9
|
|
(Increase)/decrease in
receivables
|
|
(0.6)
|
17.6
|
(1.3)
|
|
Decrease/(increase) in
inventories
|
|
13.5
|
(5.7)
|
(2.7)
|
|
(Decrease)/increase in
payables
|
|
(4.3)
|
0.3
|
11.1
|
|
Operating cash flow after changes in working capital before
exceptional items
|
|
50.6
|
21.5
|
42.0
|
|
Additional cash funding of pension
schemes
|
|
(2.0)
|
(2.0)
|
(4.0)
|
|
Cash generated from operations before exceptional
items
|
|
48.6
|
19.5
|
38.0
|
|
Cash outflow in respect of
exceptional items
|
|
(0.5)
|
(0.8)
|
(1.4)
|
|
Cash generated from operations
|
|
48.1
|
18.7
|
36.6
|
|
Interest paid
|
|
(6.2)
|
(3.6)
|
(11.4)
|
|
Refinancing costs paid
|
|
(5.6)
|
(10.6)
|
(12.3)
|
|
Taxation (paid)/received
|
|
(2.6)
|
0.1
|
(1.8)
|
|
Net
cash generated from operating activities
|
|
33.7
|
4.6
|
11.1
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(7.8)
|
(4.0)
|
(10.3)
|
|
Purchase of intangible
assets
|
|
(0.6)
|
(0.5)
|
(1.7)
|
|
Settlement of derivatives used in
net investment hedges
|
|
(0.4)
|
(0.1)
|
0.4
|
|
Net
cash used in investing activities
|
|
(8.8)
|
(4.6)
|
(11.6)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Drawdown/(repayment) of
overdrafts
|
10
|
9.9
|
(4.1)
|
(6.2)
|
|
Drawdown/(repayment) of other
loans
|
10
|
3.0
|
(10.6)
|
(4.9)
|
|
(Repayment)/drawdown of bank
loans
|
10
|
(23.3)
|
20.0
|
13.7
|
|
Repayment of IFRS 16 lease
obligations
|
10
|
(2.1)
|
(2.3)
|
(4.3)
|
|
Net
cash (used in)/generated from financing
activities
|
|
(12.5)
|
3.0
|
(1.7)
|
|
|
|
|
|
|
|
Increase/(decrease) in net cash and
cash equivalents
|
|
12.4
|
3.0
|
(2.2)
|
|
Net cash and cash equivalents at the
start of the period
|
|
1.6
|
4.5
|
4.5
|
|
Currency translation
differences
|
|
0.3
|
0.5
|
(0.7)
|
|
Net
cash and cash equivalents at the end of the
period
|
|
14.3
|
8.0
|
1.6
|
(1)Refinancing costs paid
reclassified as operating activities, reported previously under
financing activities.
Condensed interim consolidated statement of changes in
equity
|
|
|
|
Other
reserves
|
|
|
|
|
Issued
share
capital
£m
|
Share
premium
account
£m
|
Cash
flow
hedge
reserve
£m
|
Currency
translation
reserve
£m
|
Capital
redemption
reserve
£m
|
Accumulated
losses
£m
|
Total
equity
£m
|
|
At 1 July 2023
|
17.4
|
68.6
|
3.7
|
(2.0)
|
77.2
|
(127.8)
|
37.1
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
12.7
|
12.7
|
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
Items that may be
reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
Currency translation
differences
of foreign subsidiaries
|
-
|
-
|
-
|
1.0
|
-
|
-
|
1.0
|
|
Loss on net investment
hedges
|
-
|
-
|
-
|
(0.6)
|
-
|
-
|
(0.6)
|
|
Loss on cash flow hedges in the
period
|
-
|
-
|
(1.5)
|
-
|
-
|
-
|
(1.5)
|
|
Cash flow hedges transferred to
profit or loss
|
-
|
-
|
(0.8)
|
-
|
-
|
-
|
(0.8)
|
|
Taxation relating to the items
above
|
-
|
-
|
0.6
|
-
|
-
|
-
|
0.6
|
|
|
-
|
-
|
(1.7)
|
0.4
|
-
|
-
|
(1.3)
|
|
Items that will not be
reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
Net actuarial loss on
post‑employment benefits
|
-
|
-
|
-
|
-
|
-
|
(7.3)
|
(7.3)
|
|
Taxation relating to item
above
|
-
|
-
|
-
|
-
|
-
|
1.8
|
1.8
|
|
|
-
|
-
|
-
|
-
|
-
|
(5.5)
|
(5.5)
|
|
Total other comprehensive (expense)/income
|
-
|
-
|
(1.7)
|
0.4
|
-
|
(5.5)
|
(6.8)
|
|
Total comprehensive (expense)/income
|
-
|
-
|
(1.7)
|
0.4
|
-
|
7.2
|
5.9
|
|
Transactions with owners of the parent
|
|
|
|
|
|
|
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
0.6
|
0.6
|
|
At
31 December 2023
|
17.4
|
68.6
|
2.0
|
(1.6)
|
77.2
|
(120.0)
|
43.6
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Other
reserves
|
|
|
|
|
Issued
share
capital
£m
|
Share
premium
account
£m
|
Cash
flow
hedge
reserve
£m
|
Currency
translation
reserve
£m
|
Capital
redemption
reserve
£m
|
Accumulated
losses
£m
|
Total
equity
£m
|
|
At 1 July 2022
|
17.4
|
68.6
|
1.8
|
(1.8)
|
77.2
|
(106.2)
|
57.0
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(16.8)
|
(16.8)
|
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
Items that may be
reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
Currency translation
differences
of foreign subsidiaries
|
-
|
-
|
-
|
2.6
|
-
|
-
|
2.6
|
|
Gain on net investment
hedges
|
-
|
-
|
-
|
(0.5)
|
-
|
-
|
(0.5)
|
|
Gain on cash flow hedges in the
period
|
-
|
-
|
3.4
|
-
|
-
|
-
|
3.4
|
|
Cash flow hedges transferred to
profit or loss
|
-
|
-
|
(0.5)
|
-
|
-
|
-
|
(0.5)
|
|
Taxation relating to the items
above
|
-
|
-
|
(0.7)
|
-
|
-
|
-
|
(0.7)
|
|
|
-
|
-
|
2.2
|
2.1
|
-
|
-
|
4.3
|
|
Items that will not be
reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
Net actuarial loss on
post‑employment benefits
|
-
|
-
|
-
|
-
|
-
|
(10.3)
|
(10.3)
|
|
Taxation relating to item
above
|
-
|
-
|
-
|
-
|
-
|
2.6
|
2.6
|
|
|
-
|
-
|
-
|
-
|
-
|
(7.7)
|
(7.7)
|
|
Total other comprehensive income/(expense)
|
-
|
-
|
2.2
|
2.1
|
-
|
(7.7)
|
(3.4)
|
|
Total comprehensive income/(expense)
|
-
|
-
|
2.2
|
2.1
|
-
|
(24.5)
|
(20.2)
|
|
Transactions with owners of the parent
|
|
|
|
|
|
|
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
0.5
|
0.5
|
|
At
31 December 2022
|
17.4
|
68.6
|
4.0
|
0.3
|
77.2
|
(130.2)
|
37.3
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Other
reserves
|
|
|
|
|
Issued
share
capital
£m
|
Share
premium
account
£m
|
Cash
flow
hedge
reserve
£m
|
Currency
translation
reserve
£m
|
Capital
redemption
reserve
£m
|
Accumulated
losses
£m
|
Total
equity
£m
|
|
At 1 July 2022
|
17.4
|
68.6
|
1.8
|
(1.8)
|
77.2
|
(106.2)
|
57.0
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(11.5)
|
(11.5)
|
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
Items that may be
reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
Currency translation
differences
of foreign subsidiaries
|
-
|
-
|
-
|
(0.6)
|
-
|
-
|
(0.6)
|
|
Gain on net investment
hedges
|
-
|
-
|
-
|
0.4
|
-
|
-
|
0.4
|
|
Gain on cash flow hedges in the
year
|
-
|
-
|
3.7
|
-
|
-
|
-
|
3.7
|
|
Cash flow hedges transferred to
profit or loss
|
-
|
-
|
(1.4)
|
-
|
-
|
-
|
(1.4)
|
|
Taxation relating to the items
above
|
-
|
-
|
(0.4)
|
-
|
-
|
-
|
(0.4)
|
|
|
-
|
-
|
1.9
|
(0.2)
|
-
|
-
|
1.7
|
|
Items that will not be
reclassified
to profit or loss:
|
|
|
|
|
|
|
|
|
Net actuarial loss on
post‑employment benefits
|
-
|
-
|
-
|
-
|
-
|
(14.1)
|
(14.1)
|
|
Taxation relating to item
above
|
-
|
-
|
-
|
-
|
-
|
3.5
|
3.5
|
|
|
-
|
-
|
-
|
-
|
-
|
(10.6)
|
(10.6)
|
|
Total other comprehensive income/(expense)
|
-
|
-
|
1.9
|
(0.2)
|
-
|
(10.6)
|
(8.9)
|
|
Total comprehensive income/(expense)
|
-
|
-
|
1.9
|
(0.2)
|
-
|
(22.1)
|
(20.4)
|
|
Transactions with owners of the parent
|
|
|
|
|
|
|
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
0.5
|
0.5
|
|
At
30 June 2023 (audited)
|
17.4
|
68.6
|
3.7
|
(2.0)
|
77.2
|
(127.8)
|
37.1
|
|
|
|
|
|
|
|
|
|
|
|
| |
Notes to the consolidated financial
information
1.
Corporate information
McBride plc ('the Company') is a
public company limited by shares incorporated and domiciled in the
United Kingdom and registered in England and Wales. The Company's
ordinary shares are listed on the London Stock Exchange. The
registered office of the Company is Middleton Way, Middleton,
Manchester M24 4DP. For the purposes of DTR 6.4.2R, the Home State
of McBride plc is the United Kingdom.
The Company and its subsidiaries
(together, 'the Group') is Europe's leading provider of private
label and contract manufactured products for the domestic household
and professional cleaning/hygiene markets. The Company develops and
manufactures products for the majority of retailers and major brand
owners throughout Europe and the Asia-Pacific region.
2.
Accounting policies
Basis of
preparation
The interim financial information
for the six months period ended 31 December 2023 has been prepared
on the basis of the accounting policies set out in the 2023 Annual
Report and Accounts and in accordance with UK adopted IAS 34
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the UK's Financial Conduct
Authority.
This interim financial information
should be read in conjunction with the annual consolidated
financial statements for the year ended 30 June 2023, which were
prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006. The
financial statements have been prepared under the historical cost
convention, modified in respect of financial assets and liabilities
(derivative financial instruments) at fair value through profit or
loss, assets held for sale and defined benefit pension plan
assets.
The results for each half year are
unaudited and do not represent the Group's statutory accounts
within the meaning of section 434 of the Companies Act 2006. The
interim financial information has not been reviewed or audited. The
Group's statutory accounts were approved by the Directors on 18
September 2023 and have been reported on by PricewaterhouseCoopers
LLP and delivered to the Registrar of Companies. The report of
PricewaterhouseCoopers LLP was (i) unqualified and (ii) did not
contain a statement under section 498 of the Companies Act
2006.
Going
concern
In determining the appropriate basis
of preparation of the financial statements for the six months to 31
December 2023, the Directors are required to consider whether the
Group can continue in operational existence for the foreseeable
future.
The Group meets its funding
requirements through internal cash generation and bank credit
facilities. The Group has access to a €175 million multi-currency
RCF, with covenants in respect of liquidity, debt cover and
interest cover. The Group also has facilities whereby it can borrow
against certain of its trade receivables. At 31 December 2023,
liquidity, as detailed in note 16, amounted to £85.0
million.
In assessing the going concern
assumptions, the Board has reviewed the Group's base case scenario
and considered severe but plausible downside scenarios.
The Group's base case scenario to 30
June 2025 assumes:
· revenue growth driven predominantly by volume
increases resulting from net contract wins;
· interest rates remaining unchanged from current
levels; and
· Sterling: Euro exchange rate of
£1:€1.12.
The Directors have considered severe
but plausible downside scenarios to stress test the Group's
financial forecasts, with the following assumptions:
· revenue growth halved for the remainder of
2024;
· revenue growth reducing to half of that assumed
in the latest view for 2025;
· interest rates increasing by a further 100 basis
points; and
· Sterling appreciating significantly against the
Euro to £1:€1.22.
If such a severe but plausible
downside risk scenario occurs, the Group would remain compliant
with current banking covenants.
After reviewing the current
liquidity position, financial forecasts, stress testing of
potential risks and considering the uncertainties described above,
and based on the currently committed funding facilities, the
Directors have a reasonable expectation that the Group has
sufficient resources to continue in operational existence and
without significant curtailment of operations for the foreseeable
future. For these reasons, the Directors continue to adopt the
going concern basis of accounting in preparing the Group financial
statements.
Critical accounting
judgements and key sources of estimation
uncertainty
The preparation of the consolidated
financial statements from which this preliminary announcement is
derived, requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. The significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the consolidated financial statements for
the year ended 30 June 2023.
Alternative performance
measures (APMs)
The performance of the Group is
assessed using a variety of adjusted measures that are not defined
under IFRS and are therefore termed non-GAAP measures.
|
APM
|
|
Definition
|
|
Source
|
|
Adjusted operating profit
|
|
Operating profit before amortisation
of intangible assets and exceptional items
|
|
Consolidated income
statement
|
|
Adjusted EBITDA
|
|
Adjusted operating profit before
depreciation
|
|
Consolidated income
statement
|
|
Adjusted profit before
taxation
|
|
Adjusted profit before taxation is
based on adjusted operating profit less adjusted finance
costs
|
|
Consolidated income
statement
|
|
Adjusted profit for the
period
|
|
Adjusted profit for the period is
based on adjusted profit before taxation less taxation relating to
non-adjusting items
|
|
Consolidated income
statement
|
|
Adjusted earnings per
share
|
|
Adjusted earnings per share is based
on the Group's profit for the period adjusted for the items
excluded from operating profit in arriving at adjusted operating
profit
|
|
Note 6
Consolidated income
statement
|
|
Free cash flow
|
|
Free cash flow is defined as cash
generated before exceptional items
|
|
Consolidated cash flow
statement
|
|
Cash conversion %
|
|
Cash conversion % is defined as free
cash flow as a percentage of adjusted EBITDA
|
|
Consolidated income
statement
Consolidated cash flow
statement
|
|
Adjusted return on capital employed
(ROCE)
|
|
Adjusted ROCE is defined as rolling
twelve months total adjusted operating profit divided by the
average of the past two years' capital employed. Capital employed
is defined as the total of goodwill and other intangible assets,
property, plant and equipment, right-of-use assets, inventories,
trade and other receivables less trade and other
payables.
|
|
Consolidated income
statement
Consolidated balance
sheet
|
|
Liquidity
|
|
At any time, without double
counting, the aggregate of: (a) cash; (b) cash equivalents; (c) the
available facility at that time, which comprises the headroom
available in the RCF and other committed facilities; and (d) the
aggregate amount available for drawing under uncommitted
facilities.
|
|
Consolidated cash flow
statement
Note 16
|
|
Net debt
|
|
Net debt consists of cash and cash
equivalents, overdrafts, bank and other loans and lease
liabilities.
|
|
Consolidated balance
sheet
|
The APMs used may not be directly
comparable with similarly titled measures used by other
companies.
Adjusted measures exclude specific
items that are considered to hinder comparison of the trading
performance of the Group's businesses either year on year or with
other businesses. This presentation is consistent with the way that
financial performance is measured by management and reported to the
Board and Executive Committee and is used for internal performance
analysis and in relation to employee incentive arrangements. The
Directors present these measures in the financial statements in
order to assist investors in their assessment of the trading
performance of the Group. Directors do not regard these measures as
a substitute for, or superior to, the equivalent measures
calculated and presented in accordance with IFRS.
During the years under review, the
items excluded from operating profit in arriving at adjusted
operating profit were the amortisation of intangible assets and
exceptional items. Exceptional items and amortisation are excluded
from adjusted operating profit because they are not considered to
be representative of the trading performance of the Group's
businesses during the year.
See note 16 'Additional information'
for further information on alternative performance
measures.
3.
Segment information
Background
Financial information is presented
to the Board by product technology for the purposes of allocating
resources within the Group and assessing the performance of the
Group's businesses. There are five separately managed and
accountable business divisions:
· Liquids;
· Unit Dosing;
· Powders;
· Aerosols; and
· Asia Pacific.
Intra-group revenue from the sale of
products is agreed between the relevant customer-facing units and
eliminated in the segmental presentation that is presented to the
Board, and therefore excluded from the below figures. Most overhead
costs are directly attributed within the respective divisions'
income statements. Central overheads are allocated to a reportable
segment proportionally using an appropriate cost driver. Corporate
costs, which include the costs associated with the Board and the
Executive Leadership Team, governance and listed company costs and
certain central functions (mostly associated with financial
disciplines such as treasury), are reported separately. Exceptional
items are detailed in note 4 and are not allocated to the
reportable segments as this reflects how they are reported to the
Board. Net finance costs are not allocated to the reportable
segments, as the central treasury function manages this
activity, together with the overall net debt position of the
Group.
The Board uses adjusted operating
profit to measure the profitability of the Group's businesses.
Adjusted operating profit is, therefore, the measure of segment
profit presented in the Group's segment disclosures. Adjusted
operating profit represents operating profit before specific items
that are considered to hinder comparison of the trading performance
of the Group's businesses either year on year or with other
businesses. During the years under review, the items excluded from
operating profit in arriving at adjusted operating profit were the
amortisation of intangible assets and exceptional items.
|
|
Liquids
|
Unit Dosing
|
Powders
|
Aerosols
|
Asia
Pacific
|
Corporate
|
Group
|
|
Period ended 31 December 2023
(unaudited)
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Segment revenue
|
266.4
|
116.5
|
47.2
|
25.4
|
12.5
|
-
|
468.0
|
|
Adjusted operating profit/(loss)
|
22.8
|
7.9
|
3.2
|
0.5
|
0.7
|
(4.6)
|
30.5
|
|
Amortisation of intangible
assets
|
|
|
|
|
|
|
(1.0)
|
|
Operating profit
|
|
|
|
|
|
|
29.5
|
|
Finance costs
|
|
|
|
|
|
|
(12.1)
|
|
Profit before taxation
|
|
|
|
|
|
|
17.4
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
60.1
|
24.7
|
13.3
|
8.9
|
2.4
|
-
|
109.4
|
|
Capital expenditure
|
2.5
|
3.1
|
0.5
|
0.1
|
-
|
-
|
6.2
|
|
Amortisation and
depreciation
|
6.7
|
3.0
|
0.7
|
0.3
|
0.7
|
-
|
11.4
|
|
|
Liquids
|
Unit Dosing
|
Powders
|
Aerosols
|
Asia
Pacific
|
Corporate
|
Group
|
|
Period ended 31 December 2022
(unaudited)
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Segment revenue
|
237.7
|
111.4
|
42.7
|
21.3
|
13.2
|
-
|
426.3
|
|
Adjusted operating profit/(loss)
|
0.2
|
2.2
|
(1.2)
|
-
|
0.8
|
(3.3)
|
(1.3)
|
|
Amortisation of intangible
assets
|
|
|
|
|
|
|
(1.3)
|
|
Operating loss
|
|
|
|
|
|
|
(2.6)
|
|
Finance costs
|
|
|
|
|
|
|
(17.4)
|
|
Loss before taxation
|
|
|
|
|
|
|
(20.0)
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
62.6
|
36.2
|
15.5
|
10.3
|
3.6
|
-
|
128.2
|
|
Capital expenditure
|
1.6
|
1.3
|
0.3
|
0.1
|
0.1
|
-
|
3.4
|
|
Amortisation and
depreciation
|
6.5
|
3.1
|
0.7
|
0.3
|
0.8
|
-
|
11.4
|
|
|
Liquids
|
Unit Dosing
|
Powders
|
Aerosols
|
Asia
Pacific
|
Corporate
|
Group
|
|
Year ended 30 June 2023
(audited)
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Segment revenue
|
497.9
|
234.2
|
85.9
|
46.2
|
24.8
|
-
|
889.0
|
|
Adjusted operating profit/(loss)
|
10.5
|
10.0
|
(0.7)
|
0.3
|
1.1
|
(7.7)
|
13.5
|
|
Amortisation of intangible
assets
|
|
|
|
|
|
|
(2.4)
|
|
Exceptional items (note
4)
|
|
|
|
|
|
|
(0.8)
|
|
Operating profit
|
|
|
|
|
|
|
10.3
|
|
Finance costs
|
|
|
|
|
|
|
(25.4)
|
|
Loss before taxation
|
|
|
|
|
|
|
(15.1)
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
59.4
|
33.8
|
15.8
|
9.6
|
2.9
|
-
|
121.5
|
|
Capital expenditure
|
5.9
|
4.9
|
1.7
|
0.4
|
0.3
|
-
|
13.2
|
|
Amortisation and
depreciation
|
13.2
|
6.3
|
1.4
|
0.6
|
1.5
|
-
|
23.0
|
4.
Exceptional items
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
£m
|
2022
£m
|
2023
£m
|
|
Environmental remediation
|
-
|
-
|
0.8
|
|
Total charged to operating profit/(loss)
|
-
|
-
|
0.8
|
|
Group refinancing:
|
|
|
|
|
Independent business review and
refinancing costs
|
4.0
|
10.8
|
12.2
|
|
Total charged to finance costs
|
4.0
|
10.8
|
12.2
|
|
Total exceptional items
|
4.0
|
10.8
|
13.0
|
During the period, exceptional costs
of £4.0 million were incurred and recognised as finance costs
(2022: £10.8m). The charge primarily relates to the termination of
the upside sharing fee. As announced on 25 October 2023, the Group
agreed to make a one-off payment of £5.0 million to its lender
group in respect of the upside sharing fee. As £1.5 million had
already been recognised at 30 June 2023, a further £3.5 million
cost has been recognised in the period.
Costs of £10.8 million incurred in
the prior year period related to the independent business review
and refinancing of the RCF.
5.
Taxation
Reported profit before taxation was
£17.4 million (2022: loss of £20.0m). Adjusted profit before
taxation was £22.4 million (2022: loss of £7.9m).
The tax charge on adjusted profit
before taxation for the year is £6.0 million (2022: £0.7m credit)
and the effective tax rate is a charge of 27% (2022:
9%).
The Group forecasts an adjusted
effective tax rate for the full year of 30%, before discrete items,
which is higher than the UK corporation tax rate of 25% due to
non-UK tax rates, non-deductible items and local taxes
payable.
6.
Earnings/(loss) per ordinary share
Basic earnings/(loss) per ordinary
share is calculated by dividing the profit/(loss) for the period
attributable to owners of the Company by the weighted average
number of the Company's ordinary shares in issue during the
financial period. The weighted average number of the Company's
ordinary shares in issue excludes 501,172 shares (2022: 629,200
shares), being the weighted average number of own shares held
during the year in relation to employee share schemes.
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
Reference
|
2023
|
2022
|
2023
|
|
Weighted average number of ordinary shares in issue
(million)
|
a
|
173.6
|
173.5
|
173.4
|
|
Effect of dilutive share options
(million)
|
|
7.1
|
2.8
|
2.5
|
|
Weighted average number of ordinary shares for
calculating
|
b
|
|
|
|
|
diluted earnings/(loss) per share (million)
|
|
180.7
|
176.3
|
175.9
|
Diluted earnings/(loss) per share is
calculated by adjusting the weighted average number of ordinary
shares in issue assuming the conversion of all potentially dilutive
ordinary shares. Where potentially dilutive ordinary shares would
cause an increase in earnings per share, or a decrease in loss per
share, the diluted loss per share is considered equal to the basic
loss per share.
During the period, the Company had
equity-settled awards with a nil exercise price that are
potentially dilutive ordinary shares.
Adjusted earnings/(loss) per share
measures are calculated based on profit/(loss) for the period
attributable to owners of the Company before adjusting items as
follows:
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
|
2023
|
2022
|
2023
|
|
|
Reference
|
£m
|
£m
|
£m
|
|
Profit/(loss) for calculating basic
and diluted earnings/(loss) per share
|
c
|
12.7
|
(16.8)
|
(11.5)
|
|
Adjusted for:
|
|
|
|
|
|
Amortisation of intangible assets
(note 8)
|
|
1.0
|
1.3
|
2.4
|
|
Exceptional items (note
4)
|
|
4.0
|
10.8
|
13.0
|
|
Taxation relating to the above
items
|
|
(1.3)
|
(2.5)
|
(3.9)
|
|
Profit/(loss) for calculating
adjusted earnings/(loss) per share
|
d
|
16.4
|
(7.2)
|
-
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
|
2023
|
2022
|
2023
|
|
|
Reference
|
pence
|
pence
|
pence
|
|
Basic earnings/(loss) per share
|
c/a
|
7.3
|
(9.7)
|
(6.6)
|
|
Diluted earnings/(loss) per share
|
c/b(1)
|
7.0
|
(9.7)
|
(6.6)
|
|
Adjusted basic earnings/(loss) per share
|
d/a
|
9.5
|
(4.2)
|
0.0
|
|
Adjusted diluted earnings/(loss) per share
|
d/b(1)
|
9.1
|
(4.2)
|
0.0
|
(1)Diluted loss per share is
considered equal to the basic loss per share as potentially
dilutive ordinary shares cause a decrease in the loss per
share.
7.
Payments to shareholders
Dividends paid and received are
included in the financial statements in the year in which the
related dividends are actually paid or received or, in respect of
the Company's final dividend for the year, approved by
shareholders.
Under the terms of the amended RCF
announced on 29 September 2022, the Company may not, except with
the consent of its lender group, declare, make or pay any dividend
or distribution to its shareholders prior to an 'exit event', being
a change of control, refinancing of the RCF in full, prepayment and
cancellation of the RCF in full, or upon the termination date of
the RCF, being May 2026. Hence, the Board is not recommending an
interim dividend for the period ended 31 December 2023.
No payments to ordinary shareholders
were made or proposed in respect of this period or the prior
year.
Furthermore, under the RCF, the
Company may not, except with the consent of its lender group,
redeem or repay any of its share capital prior to an exit event.
Therefore, as intimated in the announcement dated 3 October 2022,
the redemption of B Shares that would normally take place in
November each year will not take place.
B Shares issued but not redeemed are
classified as current liabilities.
|
|
|
Nominal
|
|
|
Number
|
value
|
|
|
000
|
£m
|
|
At
31 December 2022 (unaudited), 30 June 2023 (audited) and 31
December 2023 (unaudited)
|
665,888
|
0.7
|
B Shares carry no rights to attend,
speak or vote at Company meetings, except on a resolution relating
to the winding up of the Company.
8.
Intangible assets, property, plant and equipment and right-of-use
assets
|
|
Goodwill
|
|
|
|
|
and
other
|
Property,
|
|
|
|
intangible
|
plant
and
|
Right-of-use
|
|
|
assets
|
equipment
|
assets
|
|
|
£m
|
£m
|
£m
|
|
Net book value at 1 July 2023
(audited)
|
26.2
|
117.8
|
8.5
|
|
Currency translation
differences
|
0.1
|
1.6
|
0.1
|
|
Additions
|
0.6
|
5.6
|
1.9
|
|
Disposal of assets
|
-
|
(0.6)
|
-
|
|
Depreciation charge
|
-
|
(8.6)
|
(1.8)
|
|
Amortisation charge
|
(1.0)
|
-
|
-
|
|
Net
book value at 31 December 2023 (unaudited)
|
25.9
|
115.8
|
8.7
|
Included within 'goodwill and other
intangible assets' is goodwill of £19.8 million (30 June 2023:
£19.7m), computer software of £4.8 million (30 June 2023: £5.6m)
and customer relationships of £0.5 million (30 June 2023:
£0.6m).
Capital commitments as at 31
December 2023 amounted to £4.1 million (30 June 2023: £5.5m). At 31
December 2023, the Group was committed to future minimum lease
payments of £0.6 million (30 June 2023: £2.1m) in respect of leases
which have not yet commenced and for which no lease liability has
been recognised.
9.
Financial risk management
The Group's activities expose it to
a variety of financial risks: market risk (including currency risk,
fair value interest rate risk, cash flow interest rate risk and
price risk), credit risk and liquidity risk.
The condensed interim financial
information does not include all financial risk management
information and disclosures required in the annual financial
statements and they should be read in conjunction with the Group's
Annual Report and Accounts 2023. There have been no material
changes in the risk management policies since the year
end.
The table below analyses financial
instruments carried at fair value, by valuation method. The
different levels have been defined as follows:
• Level 1 -
unadjusted quoted prices in active markets for identical assets or
liabilities;
• Level 2 - inputs
other than Level 1 that are observable for the asset or liability,
either directly (prices) or indirectly (derived from prices);
and
• Level 3 - inputs
that are not based on observable market data (unobservable
inputs).
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
As at
|
As
at
|
As
at
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
|
2022
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Level 2 assets
|
|
|
|
|
Derivative financial
instruments
|
|
|
|
|
Forward currency
contracts
|
-
|
0.4
|
0.2
|
|
Interest rate swaps
|
2.4
|
4.9
|
4.9
|
|
Total financial assets
|
2.4
|
5.3
|
5.1
|
|
Level 2 liabilities
|
|
|
|
|
Derivative financial
instruments
|
|
|
|
|
Forward currency
contracts
|
(0.1)
|
(0.2)
|
-
|
|
Interest rate swaps
|
-
|
-
|
(0.3)
|
|
Upside sharing fee
|
-
|
-
|
(1.5)
|
|
Total financial liabilities
|
(0.1)
|
(0.2)
|
(1.8)
|
Derivative financial
instruments
Derivative financial instruments
comprise the foreign currency derivatives and interest rate
derivatives that are held by the Group in designated hedging
relationships.
Foreign currency forward contracts
are measured by reference to prevailing forward exchange rates.
Interest rate swaps and caps are measured by discounting the
related cash flows using yield curves derived from prevailing
market interest rates.
The upside sharing fee recognised at
30 June 2023 was identified as an embedded derivative. The amended
RCF that the Group agreed with its lender group on 29 September
2022 included an 'upside sharing' mechanism whereby a fee would
become payable by the Group to members of the lender group upon the
occurrence of an 'exit event'. Such a fee was to be determined as
the percentage of any increase in the market capitalisation of the
Group from 29 September 2022 to the date of the exit event. For
reporting to the year ended 30 June 2023, a valuation was performed
using a conventional Black-Scholes pricing model with an exit date
of 31 May 2024, based on the assumption that the Group would have
agreed a new RCF arrangement at that time. In the first half of the
current financial year, the Group agreed and paid a settlement in
respect of this upside sharing fee, therefore no embedded
derivative financial instrument is recognised in respect of this as
at 31 December 2023.
Valuation levels and
techniques
There were no transfers between
levels during the year and no changes in valuation
techniques.
Financial assets and
liabilities measured at amortised cost
The fair value of borrowings,
including overdrafts and lease liabilities, are as
follows:
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
As at
|
As
at
|
As
at
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
|
2022
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Current
|
66.5
|
51.3
|
52.8
|
|
Non-current
|
93.5
|
126.1
|
115.3
|
|
Total borrowings
|
160.0
|
177.4
|
168.1
|
The fair value of the following
financial assets and liabilities approximate to their carrying
amount:
· trade and other receivables;
· other current financial assets;
· cash and cash equivalents; and
· trade and other payables.
10.
Net debt
Movements in net debt were as
follows:
|
|
|
IFRS
16
|
|
Currency
|
Unaudited
|
|
|
At 1
Jul
|
non-cash
|
Cash
|
translation
|
At 31 Dec
|
|
|
2023
|
movements(1)
|
flows
|
differences
|
2023
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Cash and cash equivalents
|
1.6
|
-
|
12.4
|
0.3
|
14.3
|
|
Overdrafts
|
(0.6)
|
-
|
(9.9)
|
(0.5)
|
(11.0)
|
|
Bank and other loans
|
(158.5)
|
-
|
20.3
|
(1.6)
|
(139.8)
|
|
Lease liabilities
|
(9.0)
|
(2.2)
|
2.1
|
(0.1)
|
(9.2)
|
|
Net
debt
|
(166.5)
|
(2.2)
|
24.9
|
(1.9)
|
(145.7)
|
(1)IFRS 16 non-cash movements
includes additions (£2.0 million) and interest charged (£0.1
million).
11.
Pensions and post-employment benefits
The Group provides a number of
post-employment benefit arrangements. In the UK, the Group operates
a closed defined benefit pension scheme and a defined contribution
pension scheme. Elsewhere in Europe, the Group has a number of
smaller post-employment benefit arrangements that are structured to
accord with local conditions and practices in the countries
concerned. The Group also recognises the assets and liabilities for
all members of the defined contribution scheme in Belgium,
accounting for the whole defined contribution section as a defined
benefit scheme under IAS 19 'Employee Benefits', as there is a risk
the underpin will require the Group to pay further contributions to
the scheme.
At 31 December 2023, the Group
recognised a deficit on its UK defined benefit pension plan of
£30.6 million (30 June 2023: £24.7m). The Group's post-employment
benefit obligations outside the UK amounted to £2.0 million (30
June 2023: £1.9m).
Non-governmental collected
post-employment benefits had the following effect on the Group's
results and financial position:
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
|
2022
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Profit or loss
|
|
|
|
|
Service cost and administrative
expenses (net of employee contributions)
|
(0.4)
|
(0.5)
|
(1.0)
|
|
Net
charge to operating profit/(loss)
|
(0.4)
|
(0.5)
|
(1.0)
|
|
Net interest cost on defined benefit
obligation
|
(0.6)
|
(0.3)
|
(0.5)
|
|
Net
charge to profit/(loss) before taxation
|
(1.0)
|
(0.8)
|
(1.5)
|
|
Other comprehensive expense
|
|
|
|
|
Net actuarial loss
|
(7.3)
|
(10.3)
|
(14.1)
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
As at
|
As
at
|
As
at
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
|
2022
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Balance sheet
|
|
|
|
|
Defined benefit
obligations
|
|
|
|
|
UK - funded
|
(107.6)
|
(97.6)
|
(98.1)
|
|
Other - unfunded
|
(12.5)
|
(12.5)
|
(12.4)
|
|
|
(120.1)
|
(110.1)
|
(110.5)
|
|
Fair value of scheme
assets
|
|
|
|
|
UK - funded
|
77.0
|
74.8
|
73.4
|
|
Other - unfunded
|
10.5
|
10.6
|
10.5
|
|
Deficit on the schemes
|
(32.6)
|
(24.7)
|
(26.6)
|
For accounting purposes, the UK
scheme's benefit obligation as at 31 December 2023 has been
calculated based on data gathered for the 2021 triennial actuarial
valuation and by applying assumptions made by the Group on the
advice of an independent actuary in accordance with IAS 19
'Employee Benefits'.
12.
Share capital
|
|
Allotted
and fully paid
|
|
|
Number
|
£m
|
|
Ordinary shares of 10 pence
each
|
|
|
|
At
31 December 2022 (unaudited), 30 June 2023 (audited) and 31
December 2023 (unaudited)
|
174,057,328
|
17.4
|
Ordinary shares carry full voting
rights and ordinary shareholders are entitled to attend Company
meetings and to receive payments to shareholders.
13.
Related party transactions
Transactions between the Company and
its subsidiaries, which are related parties of the Company, are
eliminated on consolidation and, therefore, are not required to be
disclosed in these financial statements.
Key management compensation and
transactions with the Group's pension and post-employment schemes
for the financial year ended 30 June 2023 are detailed in note 28
(page 211) of McBride plc's Annual Report and Accounts 2023. A copy
of McBride plc's Annual Report and Accounts 2023 is available on
McBride's website at www.mcbride.co.uk.
14.
Exchange rates
The exchange rates used to translate
the results, assets, liabilities and cash flows of the Group's
principal foreign operations into Sterling were as
follows:
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Half year
to
|
Half year
to
|
Year
ended
|
|
|
31 Dec
|
31
Dec
|
30
Jun
|
|
|
2023
|
2022
|
2023
|
|
Average rate:
|
|
|
|
|
Euro
|
1.16
|
1.16
|
1.15
|
|
US Dollar
|
1.25
|
1.17
|
1.20
|
|
Polish Zloty
|
5.17
|
5.49
|
5.38
|
|
Danish Krone
|
8.64
|
8.62
|
8.56
|
|
Malaysian Ringgit
|
5.84
|
5.32
|
5.41
|
|
Australian Dollar
|
1.92
|
1.75
|
1.79
|
|
Closing rate:
|
|
|
|
|
Euro
|
1.15
|
1.13
|
1.17
|
|
US Dollar
|
1.27
|
1.20
|
1.27
|
|
Polish Zloty
|
4.99
|
5.28
|
5.17
|
|
Danish Krone
|
8.58
|
8.38
|
8.68
|
|
Malaysian Ringgit
|
5.84
|
5.30
|
5.91
|
|
Australian Dollar
|
1.87
|
1.77
|
1.91
|
15.
Key performance indicators (KPIs)
Management uses a number of KPIs to
measure the Group's performance and progress against its strategic
objectives. The most important of these are defined
below.
Financial
· Revenue: Revenue from contracts with customers
from the sale of goods is measured at the invoiced amount, net of
sales rebates, discounts, value added tax and other sales
taxes.
· Transformation benefits: Net profit benefit
achieved from the Transformation programme.
· Adjusted EBITDA margin: The calculation of
Adjusted EBITDA, which when divided by revenue gives this EBITDA
margin, is defined in note 2 to the 2023 Annual Report and
Accounts.
· Free cash flow increase: Free cash flow is
defined as cash generated before exceptional items.
· Adjusted ROCE improvement: Total adjusted
operating profit divided by the total of goodwill and other
intangible assets, property, plant and equipment, right-of-use
assets, inventories, trade and other receivables less trade and
other payables.
Non-financial
· Health and safety: The number of lost time
injuries x 100,000 divided by total number of person-hours
worked.
· Customer service level: The volume of products
delivered in the correct volumes and within requested timescales,
as a percentage of total volumes ordered by customers.
· Gender split - female: The proportion of our
workforce that is female.
· Customer quality: A customer satisfaction index
which combines critical issues, audit results, returns and
complaints.
· Research and development expenditure: Total
research and development expenditure as a percentage of Group
revenue.
16.
Additional information
Alternative performance
measures
The performance of the Group is
assessed using a variety of adjusted measures that are not defined
under IFRS and are therefore termed non-GAAP measures. A
reconciliation for each non-GAAP measure to the most directly
comparable IFRS measure, is set out below.
Adjusted operating profit and
adjusted EBITDA
Adjusted EBITDA means adjusted
operating profit before depreciation and amortisation. A
reconciliation between adjusted operating profit, adjusted EBITDA
and the Group's reported statutory operating profit is shown
below:
|
|
Half year
to 31 Dec
2023
|
Half
year
to 31
Dec
2022
|
Year
ended
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Operating profit/(loss)
|
29.5
|
(2.6)
|
10.3
|
|
Exceptional items (note
4)
|
-
|
-
|
0.8
|
|
Amortisation of intangibles (note
8)
|
1.0
|
1.3
|
2.4
|
|
Adjusted operating profit/(loss)
|
30.5
|
(1.3)
|
13.5
|
|
Depreciation of property, plant and
equipment (note 8)
|
8.6
|
8.2
|
16.8
|
|
Depreciation of right-of-use assets
(note 8)
|
1.8
|
1.9
|
3.8
|
|
Adjusted EBITDA
|
40.9
|
8.8
|
34.1
|
Adjusted profit before
taxation and adjusted profit for the year
Adjusted profit before taxation is
based on adjusted operating profit less adjusted finance costs.
Adjusted profit for the period is based on adjusted profit before
taxation less taxation. The table below reconciles adjusted profit
before taxation to the Group's reported profit before taxation, and
adjusted profit for the period to the Group's reported profit for
the period.
|
|
Half year
to 31 Dec
2023
|
Half
year
to 31
Dec
2022
|
Year
ended
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Profit/(loss) before taxation
|
17.4
|
(20.0)
|
(15.1)
|
|
Exceptional items (note
4)
|
4.0
|
10.8
|
13.0
|
|
Amortisation of intangibles (note
8)
|
1.0
|
1.3
|
2.4
|
|
Adjusted profit/(loss) before taxation
|
22.4
|
(7.9)
|
0.3
|
|
Taxation
|
(6.0)
|
0.7
|
(0.3)
|
|
Adjusted profit/(loss) for the period
|
16.4
|
(7.2)
|
-
|
Adjusted earnings per
share
Adjusted earnings per share is based
on the Group's profit for the period adjusted for the items
excluded from operating profit in arriving at adjusted operating
profit, and the tax relating to those items.
Free cash flow and cash
conversion %
Free cash flow is one of the Group's
key performance indicators by which our financial performance is
measured. It is primarily a liquidity measure. However, management
also believe that free cash flow and cash conversion % are
important indicators of overall operational performance as they
reflect the cash generated from operations. Free cash flow is
defined as cash generated before exceptional items. Cash conversion
% is defined as free cash flow as a percentage of adjusted EBITDA.
A reconciliation from net cash generated from operating activities,
the most directly comparable IFRS measure, to free cash flow, is
set out as follows:
|
|
Half year
to 31 Dec
2023
|
Half
year
to 31
Dec
2022
|
Year
ended
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Net
cash generated from operating activities
|
33.7
|
4.6
|
11.1
|
|
Add back:
|
|
|
|
|
Taxation paid/(received)
|
2.6
|
(0.1)
|
1.8
|
|
Interest paid
|
6.2
|
3.6
|
11.4
|
|
Refinancing costs paid
|
5.6
|
10.6
|
12.3
|
|
Cash outflow in respect of
exceptional items
|
0.5
|
0.8
|
1.4
|
|
Free cash flow
|
48.6
|
19.5
|
38.0
|
|
Adjusted EBITDA
|
40.9
|
8.8
|
34.1
|
|
Cash conversion %
|
119%
|
222%
|
111%
|
Adjusted return on capital
employed (ROCE)
Adjusted ROCE serves as an indicator
of how efficiently we generate returns from the capital invested in
the business. It is a Group KPI that is directly relatable to the
outcome of investment decisions. Adjusted ROCE is defined as total
adjusted operating profit/(loss) divided by the average period-end
capital employed. Capital employed is defined as the total of
goodwill and other intangible assets, property, plant and
equipment, right-of-use assets, inventories, trade and other
receivables less trade and other payables. There is no equivalent
statutory measure within IFRS. Adjusted return on capital employed
is calculated as follows:
|
|
As at
31 Dec
2023
|
As
at
31
Dec
2022
|
As
at
31
Dec
2021
|
As
at
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Goodwill (note 8)
|
19.8
|
19.8
|
19.7
|
19.7
|
|
Other intangible assets (note
8)
|
6.1
|
6.5
|
7.6
|
6.5
|
|
Property, plant and equipment (note
8)
|
115.8
|
121.1
|
122.1
|
117.8
|
|
Right-of-use assets (note
8)
|
8.7
|
9.9
|
11.8
|
8.5
|
|
Inventories
|
109.4
|
128.2
|
96.4
|
121.5
|
|
Trade and other
receivables
|
147.7
|
131.1
|
120.4
|
145.7
|
|
Trade and other payables
|
(215.5)
|
(211.9)
|
(183.2)
|
(219.6)
|
|
Capital employed
|
192.0
|
204.7
|
194.8
|
200.1
|
|
Average period-end capital
employed
|
198.4
|
199.8
|
209.9
|
209.4
|
|
Rolling twelve months' adjusted
operating profit/(loss)
|
45.3
|
(11.0)
|
(9.7)
|
13.5
|
|
Adjusted return on capital employed %
|
22.8%
|
(5.5)%
|
(4.6)%
|
6.4%
|
Liquidity
Liquidity means, at any time,
without double counting, the aggregate of:
(a) cash;
(b) cash
equivalents;
(c) the available facility at
that time, which comprises the headroom available in the RCF and
other committed facilities; and
(d) the aggregate amount
available for drawing under uncommitted facilities.
|
|
As at
31 Dec
2023
|
As
at
31
Dec
2022
|
As
at
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Cash and cash equivalents
|
14.3
|
8.0
|
1.6
|
|
RCF headroom
|
64.2
|
35.2
|
40.0
|
|
Other committed facilities
headroom
|
6.5
|
15.5
|
17.5
|
|
Uncommitted facilities
|
-
|
0.2
|
0.2
|
|
Liquidity
|
85.0
|
58.9
|
59.3
|
Net debt
Net debt consists of cash and cash
equivalents, overdrafts, bank and other loans and lease
liabilities.
Net debt is a measure of the Group's
net indebtedness that provides an indicator of overall balance
sheet strength. It is a key indicator used by management to assess
both the Group's cash position and its indebtedness. The use of the
term 'net debt' does not necessarily mean that the cash included in
the net debt calculation is available to settle the liabilities
included in this measure.
Net debt is considered to be an
alternative performance measure as it is not defined in IFRS. A
reconciliation from loans and other borrowings, lease liabilities
and cash and cash equivalents, the most directly comparable IFRS
measures to net debt is set out below:
|
|
As at
31 Dec
2023
|
As
at
31
Dec
2022
|
As
at
30
Jun
2023
|
|
|
£m
|
£m
|
£m
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
14.3
|
8.0
|
1.6
|
|
Current liabilities
|
|
|
|
|
Borrowings (note 9)
|
(63.2)
|
(47.5)
|
(49.3)
|
|
Lease liabilities
|
(3.3)
|
(3.8)
|
(3.5)
|
|
|
(66.5)
|
(51.3)
|
(52.8)
|
|
Non-current liabilities
|
|
|
|
|
Borrowings (note 9)
|
(87.6)
|
(119.3)
|
(109.8)
|
|
Lease liabilities
|
(5.9)
|
(6.8)
|
(5.5)
|
|
|
(93.5)
|
(126.1)
|
(115.3)
|
|
Net
debt
|
(145.7)
|
(169.4)
|
(166.5)
|
Note: This report contains inside
information which is disclosed in accordance with the Market Abuse
Regulation, which came into effect on 3 July 2016.