McBride buys Czech business as revenues grow
Personal care products group McBride has bought a 70 per cent stake in Dermacol, a Czech-based manufacturer of skincare products, in a deal worth up to £8m. The company has also revealed a record set of results for the year to 30 June, with revenues up 2 per cent to £812.2m.
McBride, which has a strong presence in the North West with sites in Middleton, St Helens, Barrow-in-Furness and Burnley, has acquired Dermacol from its parent company Alphaduct. It has also agreed to purchase the remaining 30 per cent of the shares in late 2017 for a consideration based on the company's operating profit in the 2017 financial year.
Dermacol manufacturers skincare products including face creams, skin cleansers, sun care products, body lotions, hand creams and foot creams. Its pre-tax profit was £800,000 for the year to 31 December 2009, against a turnover of £10.4m.
In addition to the deal, McBride has also published its full-year accounts for the year to 30 June, revealing record results despite a period of restructuring. Pre-tax profit before exceptional items increased to £42.4m from £29.6m on revenues that rose to £812.2m from £792.4m. Revenues were up by 3 per cent in the UK to £316.9m, by 2 per cent in mainland Western Europe to £461.6m and by 7 per cent in Eastern Europe to £33.7m.
“McBride has delivered record sales, profits and cash flow, underpinned by a strong return on capital employed,” said chief executive Chris Bull. We have acquired three businesses, two of which are in the strategic personal care and skin care sectors, and have initiated restructuring projects in UK and Italy which will deliver significant cost savings.
“Our markets across Europe have remained competitive and we have seen extensive branded promotional activity, although there is some evidence that this may be easing. As previously announced we are experiencing an increasing trend in our raw material costs and are actively engaged in mitigating them.”
During the year, the group closed its Solaro factory in Italy and “further restructuring” of its UK supply chain is in progress. Bull added that trading since the year end has been in line with expectations and is “better placed than previously” to manage raw material cost inflation.
The full-year dividend was lifted 13 per cent to 6.8 pence a share, while net debt was cut £22.4m to £60m.
