McBride’s H1 FY26: steady profits, cash returned, outlook intact
McBride has posted a solid first half, keeping margins steady while pushing ahead with dividends and a new share buyback. Revenue edged up to £475.2 million and adjusted EBITDA was flat at £41.8 million, as private label volumes continued to grow and operational tweaks offset cost pressures. The Group says it is on track to meet full-year targets, helped by a healthy pipeline of contract wins due to land in the second half.
Alongside the numbers, there is meaningful capital return – a reinstated dividend and the first tranche of a buyback – plus the UK go-live of SAP S/4HANA that sets the base for further efficiency gains.
Headline numbers investors care about
| Metric | H1 FY26 | H1 FY25 | Comment |
|---|---|---|---|
| Revenue | £475.2m | £471.4m | Up 0.8% reported, down 2.1% constant currency |
| Adjusted EBITDA (margin) | £41.8m (8.8%) | £41.7m (8.8%) | Stable year on year |
| Adjusted operating profit (margin) | £31.5m (6.6%) | £32.0m (6.8%) | Slightly lower |
| Adjusted profit before tax | £26.2m | £26.7m | Down 1.9% |
| Adjusted basic EPS | 10.8p | 11.9p | Prior year benefited from one-off tax effects |
| Net debt | £120.6m | £117.6m | 1.4x rolling 12-month adjusted EBITDA |
| Liquidity | £135.3m | £117.6m | RCF headroom £112.9m |
| Dividend paid | 3.0p (£5.2m) | n/a | Dividend reinstated |
| Share buyback (period) | £1.3m | n/a | 1,044,839 shares cancelled, avg 125.8p |
Quick definitions: EBITDA is earnings before interest, tax, depreciation and amortisation. ROCE is return on capital employed. RCF is revolving credit facility.
What’s driving the performance
- Volumes nudged up 0.4% overall, with private label up 0.9% and contract manufacturing up 1.4%. Branded volumes fell.
- Adjusted EBITDA margin held at 8.8% thanks to product engineering, operational improvements and tight overhead control, despite underlying inflation.
- Customer service levels are at a six-year high, even after some early UK disruption from the SAP S/4HANA launch, which has now stabilised.
Divisional highlights – winners and laggards
Liquids – stable revenue, some margin pressure
Revenue was flat at £269.0 million, with adjusted operating profit of £17.7 million and a margin of 6.6% (7.2% last year). Private label declined slightly, impacted by UK SAP go-live timing, while contract manufacturing volumes rose 8.5%. Pricing pressure and input cost inflation weighed, partly offset by cost control.
Unit Dosing – better margins despite softer sales
Revenue dipped 2.0% to £115.7 million, but adjusted operating profit increased to £12.5 million, lifting margin to 10.8% from 9.1%. Private label volumes rose 1.1%, with lower contract manufacturing the drag. Production efficiencies and transformation benefits did the heavy lifting here.
Powders – revenue up, profit down
Revenue grew 2.0% to £44.9 million, but adjusted operating profit fell to £3.0 million with margin at 6.7% (9.3% last year). Softer UK private label demand, delayed contract launches and supplier-related inefficiencies hurt. Germany remains a bright spot with private label up more than 10% and share gains across several markets.
Aerosols – double-digit growth and capacity paying off
Revenue jumped 18.1% to £33.9 million, with adjusted operating profit at £2.1 million and a 6.2% margin. Around 82% of revenue is private label. The £2.5 million personal care capacity expansion is feeding through to market share gains, with solid cost control across energy and logistics.
Asia Pacific – steady top line, mixed markets
Revenue was flat at £11.7 million and adjusted operating profit was £0.5 million. Growth in Malaysia was offset by delayed launches in Australia, and pre-launch costs trimmed margins.
Cash, debt and buyback – capital allocation in action
Free cash flow was £24.2 million (2024: £38.3m), primarily reflecting a working capital outflow of £16.3 million versus £1.7 million last year. Net capital expenditure was £14.8 million as McBride continued to invest in automation, operational upgrades and the SAP programme.
Net debt stood at £120.6 million, or 1.4x rolling twelve months adjusted EBITDA, with interest cover at 8.5x. Liquidity was £135.3 million at period end. The Group extended its €200 million RCF to November 2029 and still has access to a €75 million accordion, which is a positive de-risking move in my view.
Shareholder returns were meaningful at £12.9 million in the half: a 3.0p final dividend costing £5.2 million, £1.3 million of buybacks at an average price of 125.8p, and £6.4 million of shares acquired by the Employee Benefit Trust (EBT – a vehicle that holds shares to satisfy employee awards), reducing future dilution.
Operations and strategy – SAP, transformation and new formats
Wave 1 of SAP S/4HANA – the Group’s new enterprise resource planning (ERP) system – went live in the UK and is now stable. Next waves across European sites are planned for the next financial year. This is foundational plumbing for scale and efficiency, so a largely clean UK launch is encouraging.
Transformation programmes remain on track to deliver £50 million net benefits over five years, with £8.7 million cumulative as at 31 December 2025. Safety improved again, with a 14.6% reduction in the lost time incident frequency rate versus the year ended 30 June 2025. On the product side, additional capacity has been installed and a new ‘fusion’ format has been launched, supporting growth in focus markets like laundry and Germany.
Outlook – momentum into H2 and beyond
- Second half has started in line with expectations, with a healthy pipeline of contract wins set to launch and underpin growth into FY27.
- Private label market share remains ahead of recent all-time highs – a structural tailwind for McBride.
- Material costs are expected to remain flat and overheads under control.
- Management remains on track to deliver full-year results in line with analysts’ expectations. Current analysts’ expectations refer to a Group-compiled consensus for adjusted operating profit for the year ending 30 June 2026 of £64.7 million.
Risks and watch items
- Execution risk on further SAP rollouts across Europe – UK stabilised, but multi-site deployments can still throw curveballs.
- Liquids margins faced pricing pressure and input cost inflation – watch for margin rebuild as service levels normalise post-SAP.
- Powders had supplier issues and maintenance costs – evidence of recovery and on-time contract launches would help H2.
- Working capital was a drag in H1 – cash conversion should improve if volumes ramp and inventory normalises.
- Effective tax rate rose to 30% from 25% last year – this tempers EPS even if operating profit holds steady.
My take for investors
This is a tidy hold-the-line half: margins protected, service levels high, volumes edging up, and a confident capital return story. The buyback and EBT purchases are incremental EPS supports, and the extended RCF to 2029 adds financial resilience. The private label backdrop remains favourable and contract wins due in H2 are a tangible near-term catalyst.
On the flip side, adjusted EPS declined to 10.8p and Liquids and Powders show where execution needs to sharpen. Working capital outflows dented free cash flow, and the tax rate moves against the grain. But these are manageable issues if H2 launches arrive as planned and SAP rollouts continue smoothly.
Net-net, McBride looks on course for the £64.7 million adjusted operating profit target, with scope for further operational and mix improvements to drive medium-term returns. For me, the combination of resilient private label demand, disciplined capital allocation and ongoing transformation benefits keeps the equity case intact.
