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Shares of McBride plc (LON: MCB) fell 27.6% after the British manufacturer revealed that it expects to generate 15% lower revenues in the current financial year ending on 31 June 2021.
The company united that increasing input costs combined with revenue volatility in most markets were the main drivers behind the lower expectations.
Investors were not pleased to hear that the manufacturer expects input costs to remain elevated during the final quarter of its financial year. The company does not expect prices to normalise any time soon.
McBride noted that while demand for auto-dishwash products remains strong, demand for household cleaners was normalising, having fallen from the peaks witnessed in 2020 at the height of the coronavirus pandemic.
The company did not provide guidance on its revenue expectations for the next financial year, given the revenue volatility experienced in the third quarter at the start of the year.
Sales of laundry and personal care products have remained subdued across the Group’s main markets, which is not expected to change soon.
The company had issued an update in February along with its half-year results. It unveiled a new corporate strategy focused on reducing its net debt/ EBITDA ratio to 2X and below while returning capital to shareholders via a new dividend policy.
McBride has implemented some margin recovery measures to counter the rising costs of its raw materials that had compressed its margins in recent weeks.
The company does not expect to change its new compass strategy despite the impact of rising inflation on its margins.
McBride plc share price.
McBride shares fell 27.56% to trade at 67.8p, dropping from Tuesday’s closing price of 93.6p.
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