February 9, 2012 / 7:33 AM / in 6 years

UPDATE 2-McBride says supermarkets upping own-brand push

* H1 adjusted opg profit 10.3 mln stg vs f‘cst 10 mln stg

* Trading since Dec in line with expectations

* Expects progress in year

* Shares up 2.5 pct

By James Davey

LONDON, Feb 9 (Reuters) - Britain’s supermarkets are backing own-brand products more than ever before as they seek value for shoppers and differentiation from rivals, according to McBride, Europe’s biggest provider of private label household and personal care goods.

Chris Bull, chief executive of the British group, which supplies retailers such as Tesco with goods ranging from dishwasher tablets to deodorant, said supermarkets were responding to changing shopping habits in the economic downturn.

“As people move into private label what we typically see is that once they’ve tried it they don’t move back out of it (in to branded goods) because they see how much value it’s delivering,” Bull told Reuters on Thursday.

“That’s very encouraging for the future.”

The CEO was speaking after the firm posted an expected halving of trading profit in its first half, hit by the time-lag in being able to recover higher input costs.

But its shares rose 2.5 percent as the firm forecast progress in the second half, with commodity markets showing some stability and cost recovery measures taking hold.

McBride made an operating profit before one-off items of 10.3 million pounds ($16.3 million) in the six months to Dec. 31. That was in line with analysts’ expectations but down from 20.2 million pounds in the previous corresponding period.

First half revenue grew 2 percent at constant currency to 423.1 million pounds, with all three European divisions delivering growth.

“Trading since the end of December has been in line with the board’s expectations, and we expect to see continued progress for the remainder of the year,” the firm said.

McBride, which ended the period with net debt of 85.2 million pounds, maintained its interim dividend at 2.0 pence.

Shares in McBride, which have lost 15 percent of their value over the last year, were up 3 pence at 125.6 pence at 0944 GMT, valuing the business at 215 million pounds.

“We believe that the risk/reward profile of McBride has improved sufficiently to allow us to increase our recommendation from hold to buy,” said analysts at Panmure Gordon.

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