(Sharecast News) - McBride tumbled on Friday as the maker of own brand household products warned that full-year profit for this year and the next would fall short of analysts' expectations, citing cost increases due to the Iran war.
The company said it now expects FY26 and FY27 adjusted earnings before interest, tax and amortisation to be between 5% and 10% lower than current expectations of £64.2m and £70.6m, respectively.

In a trading update at the start of April, McBride had already noted the potential impact of the Middle East crisis on raw material, packaging and haulage input costs. It said on Friday that since then, there have been sustained cost increases in petrochemical-derived and energy-intensive materials due to the war. The company said its price recovery actions have progressed in the past week as it works closely with customers to secure offsetting price increases.

"The cumulative impact on input costs has exceeded our original expectations due to the continuing and prolonged period of the conflict, which has required a second phase of price recovery actions," it said. "Whilst the duration of this conflict remains uncertain, at this stage we are of the view that direct cost pressures are unlikely to either rise considerably further or experience meaningful near-term decline."

McBride said that due to the standard time lag between rising input costs and price implementation, the financial impact is expected to be concentrated within its Q4 FY26 and Q1 FY27 results and for performance to normalise and be back on track with previous expectations for FY27 heading into Q2 FY27 and beyond.

"As stated in our April update, the group notes that following previous periods of rapid inflation, there has been resilient and growing demand for private label cleaning products because of the compelling value for money proposition for consumers as rising general inflation leads to affordability challenges," it added.

The company also said it expects to complete the acquisition of French cleaning and hygiene products specialist Eurotab on or around 1 July.

At 1000 BST, the shares were down 8.9% at 151p.

Dan Coatsworth, head of markets at AJ Bell, said: "As a provider of white label goods to supermarkets, McBride is the kind of business you might expect to thrive at a time when households are having to watch their spending thanks to increased living costs.

"However, the nature of McBride's contracts with the companies it supplies means it must absorb a lag between its own costs going up and being able to pass these on.

"The conflict in the Middle East has led to severe and sudden inflationary pressures in its supply chain. Absorbing extra costs means McBride's profits are set to come in lower than previous guidance for both the current financial year ending in June and the one after.

"The market reaction is relatively measured, helped by the fact that McBride says core demand for the products is strong as people trade down from branded goods.

"The company also gave an encouraging update on progress with its acquisition of Eurotab which should boost its footprint and capacity in pre-measured, single-use items like dishwasher tablets and expand its product range."

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