Private label household goods manufacturer McBride said it had delivered a first half performance in line with its business recovery plan, despite facing a further spike in costs in the period.

It pushed through a further £97.1m of price increases in the period, with inflation adding over £87.6 million of further cost rises.

Despite the prince increases McBride has continued to gain private label market share.

First half sales volumes grew by 1.2% compared to the prior year, with private label volume growth at 2.6%, despite the overall European homecare market in the twelve months to December 2022 seeing volumes fall over 5%, especially in branded products, with a smaller fall of 2.2% for private label products.

Raw material input costs continued to increase, albeit at a slower rate than previously.

Despite a more favourable feedstock environment on plastics and naturals compared to the second half of 2022, increased energy, indirect and labour costs, coupled with large pockets of supply/demand tightness, were key drivers of the increases and more than offset any feedstock-driven relief.

All divisions continued to collaborate with customers to agree pricing actions and product engineering options to offset the inflationary challenges. Price increases agreed over the past 18 months have driven essential recovery in gross margins, but the group said it remains vigilant to the likely need for further price increases in the coming months to offset continuing inflationary impacts, particularly in labour, transport, energy and general supplies.

Overall first half group revenues were up 31.8% to £426.3m.

EBITDA improved, with adjusted operating losses reduced to £1.3m from a £14.8m loss in the first half of the previous year.

For the rest of the year, it said the early part of the second half year has continued the momentum seen in the first half and current expectations are for a stronger operating margin performance and a return to adjusted operating profit in the second half of the year.

While positive about the outlook, the group said it also remained vigilant as to the potential impacts of the ongoing and significant macroeconomic uncertainty, particularly around energy costs, high general inflation levels and the knock-on impacts of any escalation of the Ukraine conflict.

CEO Chris Smith added: “The first half year required continued high levels of attention to margin recovery in light of ongoing inflationary pressures. Whilst there are some early signs of stabilisation in certain input costs, many raw material costs remain historically high. Energy and employment costs continue to apply further inflationary pressure, and accordingly, we continue to action mitigations including price increases, product engineering and cost control.

“It is pleasing to have returned to positive adjusted operating profit in the last two months of the period, with momentum improving into the second half as a result of higher volumes from new business wins, better customer service levels and pricing actions fully annualising. All of this is supported by consumer behaviour creating a more favourable environment for private label products.

“The group’s core activities remain strong and the dedication of the entire McBride team to resolve the challenges confronting us is a strong demonstration of our values and the commitment to return the group to sustainable levels of profitability.”

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