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McBride Warns Of Bigger Loss Amid Rising Costs

Britain's McBride raised its estimate for half-year losses as the maker of Oven Pride cleaning products battles a relentless surge in costs from global supply chain pressures, driving its shares down 10%.

The company projected an interim operating loss of between £14 million ($18.62 million) and £17 million for the six months through December, up from the £10 million it had estimated in October.

McBride had reported an adjusted operating profit of £19 million a year earlier.

British manufacturers have faced supply chain bottlenecks due to congestion at global ports and a shortage of truck drivers, with some warning that the pressures may not ease until 2022.

Challenges

McBride said packaging costs remained high and that increased fuel expenses and a shortage of haulage capacity were also keeping distribution costs elevated.

The London-listed company said it remained in talks with customers about more price hikes to cushion the impact of higher costs.

Analysts at Peel Hunt said McBride and its rivals were facing "exceptionally tough" market conditions, but added: "Assuming the price increases stick and volumes are maintained, the 2H performance should improve significantly."

The company's shares were down 9.5% at 53.6 pence, as of 09:10 GMT. Earlier in the session, shares hit their lowest level in more than two years.

In September, the household products maker reported a 17.8% drop in annual profit, citing rising raw material costs, and a reported adjusted pretax profit for the full-year ended 30 June, of £19.9 million (€23.2 million), compared with £24.2 million (€28.2 million) last year.

News by Reuters, edited by ESM. For more Private-Label news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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