Private label household goods firm McBride (MCB) has reported a 4.1% revenues fall to £364.7m in the six months to 31 December 2014.

Despite the headline fall in sales, revenue on a constant currency basis was 0.2% up year-on-year and translation to a 24.3% rise in adjusted profit before tax to £7.3m.

Iain Napier, chairman, commented: “Our plan to deliver improved UK profitability is on track and it is pleasing to deliver a first half performance in line with expectations.

“Many of McBride’s key markets and categories have continued to experience weak trading environments.  The business has worked hard to deliver growth from a number of new territories balancing declines seen in our more traditional markets.  Against this backdrop, it is encouraging that the group has stabilised its revenue base on a constant currency basis.”

McBride said that strong growth in Germany derived from prior year business wins was offset by a weaker performance in Italy and Spain and subdued revenues in UK and France.

UK revenues were 3.9% compared to the first half last year, but showed modest growth (+1.1%) compared to the second half of the 2013/14 financial year.

McBride said that its financial performance was beginning to benefit from the UK restructuring project that was announced in June 2014.  The project, it said, remains “fully on track” to deliver annualised benefits of £12m by 30 June 2016 with savings in the first half year of £1.5m.

Margins also improved during the first half – from 2.7% to 3.4% – driven by operational efficiencies in production, product re-formulation and innovation, improved product sales mix and softer raw material prices.

McBride warned that the early part of the second half has “demonstrated the ongoing challenge in most of our markets to deliver substantial sales growth”. But it said the outlook remained unchanged as the group starts to benefit from lower costs in the second half.

McBride stated: “Our focus of profit improvement lies with ongoing and future cost actions, including the full year benefits of the UK restructuring project and further initiatives to improve the ‘cost of product’ across the group.

“Raw material input costs are expected to deliver some net benefits to profit in the second half, although currency volatility and the competitive environment are likely to limit this to a certain extent.”

Investec analysts wrote this morning: ”McBride has started to rebuild profits and margins in a market which is providing some top line challenges. UK rationalisation should continue to deliver an EBIT recovery and this should be assisted by falling raw materials, although the challenge will be to hold on to this in the competitive landscape.”

McBride shares leapt 4.6% higher in morning trading to 91p.

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