Equity Development - McBride plc: Market-leader strength but temporary pricing lag
Research on McBride plc (MCB:LON) from Equity Development
As the Middle East conflict has continued, McBride has seen sustained cost inflation. However, as the leading European manufacturer of private label household cleaning products, McBride has negotiated a second phase of price recovery actions that is expected to fully cover the cost increases. In the interim period there is a c. £5m hit to profits in FY26E and FY27E, with a recovery expected from Q227. More holistically, private-label products typically gain market share during inflationary periods. Encouragingly, the group has also confirmed that its offer for Eurotab Group is due to complete around 1st July. This strategic acquisition adds production capacity, as well as new product lines and customer relationships, leading to compelling synergies and incremental value for shareholders. We have reduced our forecasts to reflect the temporary lower gross margin. However, noting that McBride is a defensive and cash-generative business, we make no change to our 245p Fair Value per share.
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