Profits warning as lorry driver and supply shortages drive up ‘exceptional price increases’

Profits warning as lorry driver and supply shortages drive up ‘exceptional price increases’

McBride who are the company behind leading supermarkets own brand cleaning products has warned that they have failed to pass over the rising costs to customers.

The company have now agreed price increases with many retailers, but this will start later than the company was hoping.

McBride will not be able to pass over the increased costs from their raw materials supply chain, and shareholders were informed today.

McBride said, “The previously highlighted raw material environment remains extremely challenging both in terms of exceptional price increases and supply availability.

“More recently, and in line with the general trading environment experienced by others, the group has also started to experience distribution challenges.”

There is a problem with the lack of HGV drivers in Germany and the UK which has hit the availability of costs and transport.

McBride are expecting adjusted pre-tax profits to be between 55% and 65% lower than the £19.7m which was forecast by analysts earlier this year.

Raw materials are now more expensive and hard to get hold of, and McBride are one of many firms who have a shortage of HGV drivers.

“McBride is putting up prices, but these will take effect later than hoped, at least from the company’s point of view. Consumers – and central bankers – will take note, as that means price increases further down the line for them to meet or at least mull over,” said AJ Bell investment director Russ Mould.

“McBride’s role as a contract manufacturer, or at least a maker of own-label cleaning agents for retailers, means it does not have any pricing power from brands, as it has no brands of its own.

“Many of its customers are larger and have more muscle when it comes to pricing discussions. And there are other suppliers who can be used as a bargaining chip by customers for good measure.”

Published at Thu, 19 Aug 2021 11:23:05 +0000

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