McBride (LON:MCB) management said the group delivered a third consecutive year of “strong financial and operational performance” in the six months ended Dec. 31, 2025, while reaching a key milestone in its multi-year transformation program with the first SAP S/4HANA go-live in the U.K.
Chief Executive Officer Chris Smith said the period could be summarized by three themes: continued performance, the SAP implementation milestone, and a “balanced approach to capital allocation” combining shareholder returns and business investment.
Interim trading and market backdrop
For the half year, the company reported total sales revenue up just under 1% to £475 million, with private label volumes growing but at a slower rate than in the prior two years. Smith added that McBride has a “robust pipeline of new business wins” expected to start during the second half, supporting momentum into FY2027.
Chief Financial Officer Mark Strickland said group revenue rose £3.8 million, or 0.8% on an actual basis, but declined 2.1% on a constant currency basis. He noted that private label and contract manufacturing volumes were up, while McBride branded volumes declined.
Profitability, SAP impact, and cost environment
Management said margins were maintained despite competitive pricing and inflationary pressures, supported by productivity gains and overhead control. Smith said first-half EBITDA margins were “just under 9%,” with the full-year margin expected to be “over 9%.”
Strickland reported adjusted operating profit of £31.5 million, slightly lower year over year, and adjusted EBITDA of £41.8 million, in line with the prior-year first half. He said that without the SAP impact, adjusted operating profit “would most likely have been up slightly.”
Smith disclosed that the November SAP S/4HANA go-live in the U.K. resulted in limited disruption early on, particularly in warehouse operations where capacity constraints led to missed sales. He estimated about £3 million of lost sales and roughly a £1 million impact to EBITDA. Smith said the issue was resolved quickly and the business subsequently recorded “record output and shipment days.”
On the cost backdrop, Strickland described input costs as “flat, benign overall,” though still materially higher than 2021 levels. He said inflation remains present but at slower rates, making margin management and efficiency efforts important. In the Q&A, Strickland said shipping and supply chain conditions were “pretty benign” and did not identify specific headwinds, while cautioning that broader geopolitical uncertainty could always change conditions.
Divisional performance highlights
Management provided updates across divisions, noting stronger progress in Unit Dosing and aerosols, with Liquids and Powders relatively weaker.
- Liquids: Smith said volumes were higher overall, with contract manufacturing up 9% and private label flat, while the division also managed the first SAP go-live at the U.K. liquid site. He cited uncertainty around the EU Deforestation Regulation as pressuring certain raw materials (particularly palm oil derivatives), contributing to modest material cost increases that were difficult to pass on. Strickland reported Liquids revenue of £269 million (about 57% of group) and adjusted operating profit of £17.7 million, a 6.6% return on sales.
- Unit Dosing: Smith said operational performance benefited from the “Flexcellence” program, designed to enable all pod formats to be supplied in multiple packaging formats, improving output and headcount efficiency. He said volumes were lower year-over-year due to a lost contract in contract manufacturing that annualized out in December, while private label was flat with some customer ins and outs and launch delays. Strickland reported revenue of £116 million and improved profitability to £12.5 million, with return on sales rising to 10.8%.
- Powders: Smith said the division continues to outperform its strategic targets overall, though volumes were broadly flat. Strickland said sales of £44.9 million were lower than expected due to softer private label demand (primarily in the U.K.), delayed contract launches, and mix changes. Adjusted operating profit fell £1.1 million to £3.0 million, though he said returns remained healthy due to cost control and operational efficiency.
- Aerosols: Smith said volumes were 15% higher and approaching the 100 million cans target, supported by strong growth in Germany. Strickland reported volumes up 14.6% and revenue up 18.1% to £33.9 million, with adjusted operating profit of £2.1 million. Both executives referenced ongoing capacity expansion investment at the Rosporden site in France, expected to complete in the second half.
- Asia Pacific: Smith described a mixed period with weaker private label sales to Southeast Asia, a quieter Australia, and a loss of one traded-goods supply element from Europe. He said prospects were improving, with first household wins in Australia for products made in Malaysia expected to launch soon. Strickland said the division has focused on cost management and remains an “incubator” business with potential opportunities over the next couple of years.
Cash flow, capital allocation, and balance sheet flexibility
The company highlighted a “flexible” approach to capital allocation during the period. Smith said nearly £13 million of shareholder returns were deployed through reinstated dividends, a share buyback, and share purchases to reduce dilution from employee share awards.
Strickland reported free cash flow generation of £24 million in the half year. Net debt increased slightly to £120.6 million despite the shareholder returns, which management described as evidence of continued cash generation and balance sheet strength.
Smith said shareholders approved the resumption of annual dividends at the December AGM, resulting in a £5.2 million payment in November. He also outlined two equity initiatives launched in the autumn: £6.4 million spent via the Employee Benefit Trust to acquire shares to satisfy future incentive awards (reducing expected dilution), and a £20 million share buyback launched in December, with £1.3 million deployed by Dec. 31.
Strickland said the group had around £135 million of liquidity headroom and an unutilized €75 million accordion facility, which management said provides optionality for future capital deployment.
Outlook and strategic priorities
Looking ahead, Smith said early second-half volumes were tracking in line with internal estimates and that start-up timing for new business wins remained on track. He said material costs were expected to remain stable, with potential easing for certain inputs such as natural alcohol-based materials and recycled-content plastics, while overhead inflation would be managed through continued cost vigilance.
Smith said McBride expects to deliver full-year results in line with analysts’ expectations. He also emphasized that the first SAP go-live reduced implementation risk for the remaining rollout, with management now focused on capturing efficiencies and better decision support as the global template expands. Strickland said the group still expects to complete the SAP rollout during FY2028, consistent with earlier guidance.
In the Q&A, Smith said McBride remains focused on Europe and higher-margin categories such as laundry and dish, and reiterated management’s desire to grow contract manufacturing to 25% of the business by expanding that segment rather than shrinking private label. On M&A, Smith acknowledged valuation and multiple considerations, saying the company would be “judicious” and that it would not pursue deals at “eight or nine times” multiples, while also considering the role of synergies in reducing post-acquisition valuation metrics.
About McBride (LON:MCB)
With trading roots dating back to 1927, McBride boasts a strong heritage. As the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets, McBride offers end?to?end development and manufacturing capabilities to a wide range of customers in Europe and Asia Pacific.
