Sector News

McBride chief to quit after second profits warning

May 3, 2019
Chemical Value Chain

One of Europe’s largest suppliers of cleaning products revealed yesterday that its chief executive is to stand down and warned on profits for the second time this year.

McBride said that Rik De Vos, who has run the business since 2015, would step down once a successor had been found.

The company announced his resignation at the same time as warning that profits for the year to the end of June will be “modestly lower” than market forecasts of £28.7 million due to weak sales in Europe. McBride did not give exact figures and is due to publish its annual results in September.

Shares in McBride fell 11.4, or 11 per cent, to 93.8p after the announcement.

McBride supplies detergents, toothpastes and mouthwashes to supermarkets. It is based in Manchester and is one of Europe’s biggest manufacturers of own-brand household goods. The company has 4,000 employees and it operates in 10 countries.

McBride issued its last profit warning in February, when it said higher costs for raw materials and distribution would hit its annual profits by between 10 and 15 per cent.

The company, which owns the cleaning brands Surcare, Limelite and Clean n’ Fresh, has struggled in the past 18 months as it has raised prices on its products to cope with higher costs relating to transportation and wages.

Mr De Vos, 59, said he believed the company needed a new boss to meet its growth targets. “In recent years we have achieved much in a challenging trading environment,” he said.

“However, I now consider that the group requires different leadership to deliver the next phase of its growth ambitions. I’m confident that I will be leaving McBride well positioned to realise these ambitions.” Mr De Vos will continue to receive his salary, pension contributions and benefits during a six-month notice period. He was paid £890,000 in total last year.

John Coleman, chairman of McBride, praised Mr De Vos for his “strong vision” and for helping to modernise the company. “I would also like to thank Rik for agreeing to assist the board to ensure a smooth handover of his responsibilities,” he added.

Analysts at Liberum said yesterday’s profit warning meant the company was struggling to pass through price increases and indicated it may have suffered contract losses this year to competitors offering lower prices. Analysts also said the yellow vest protests in France may have hampered performance, as sales were particularly weak in France, as well as in Germany and Italy. The demonstrations in Paris this year have resulted in shops and restaurants being closed.

They added: “In what remains a challenging retail environment across Europe, it appears chief executive Rik De Vos has decided that moving forward meaningfully quickly could be a struggle for the company and decided to explore other opportunities.”

McBride said it would announce its new chief executive in due course and would provide a trading update for the 12 months to June 30 in early July.

By: Tabby Kinder

Source: thetimes.co.uk

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