Dividend back on: key takeaways from McBride’s FY2025 results
McBride has delivered another solid year and, crucially, is reinstating dividends after normalising its balance sheet. Despite flat revenue, profit, cash flow and service metrics all looked healthy, and net debt fell faster than expected. Management talks about five consecutive half years at these improved profitability levels – a sign the turnaround is now embedded rather than a lucky streak.
| Metric | FY2025 | FY2024 | Comment |
|---|---|---|---|
| Revenue | £926.5m | £934.8m | (0.9%) reported; +0.7% at constant currency |
| Adjusted operating profit | £66.1m | £67.1m | Up £0.5m on a constant currency basis |
| Adjusted EBITDA | £85.8m | £87.1m | 9.3% margin |
| Profit before tax | £49.0m | £46.5m | +£2.5m |
| Adjusted basic EPS | 22.1p | 22.2p | Flat |
| Dividend per share | 3.0p | – | Final dividend proposed |
| Net debt | £105.2m | £131.5m | Down £26.3m; 1.2x adjusted EBITDA |
| Free cash flow | £93.9m | £81.7m | Strong inflow |
| Adjusted ROCE | 33.0% | 33.5% | Still very strong |
Jargon buster: “private label” = retailer brands; “contract manufacturing” = producing for brand owners; “adjusted EBITDA” = profit before interest, tax, depreciation and amortisation, excluding exceptional items; “ROCE” = return on capital employed; “constant currency” strips out exchange rate movements.
Profitability steady, cash superb, balance sheet normalised
Operating profit came in at £60.2m, with adjusted operating profit at £66.1m and adjusted EBITDA at £85.8m. The EBITDA margin of 9.3% is edging towards McBride’s medium-term “close to double digit” ambition. Profit before tax rose to £49.0m.
The real headline is cash and leverage. Free cash flow jumped to £93.9m, helped by a £13.7m working capital inflow. Net debt fell to £105.2m, or 1.2x adjusted EBITDA, ahead of the company’s leverage target. On the banking definition, net debt cover was just 0.4x and interest cover 8.5x – ample headroom.
Refinancing in November 2024 increased the sustainability-linked revolving credit facility to €200m to November 2028, reinstated the accordion, and shifted covenants back to the more traditional net debt and interest cover. Liquidity at year end was £141.4m.
What drove the year: volumes, service and contracts
Top-line was flat, but volumes did the heavy lifting. Total volumes rose 4.3% year on year, with private label up 1.4% and contract manufacturing up a hefty 48.9%. Contract manufacturing now represents 13.6% of revenue after several multi-year wins with large FMCG clients.
Service levels averaged over 94% – the best in six years – which matters when retailers are prioritising reliable supply. McBride leaned into its strategic priorities too: Germany and the laundry category both grew, even while branded rivals ran aggressive promotions that pinched some private label volumes.
Divisional scorecard: who did what in FY2025
- Liquids: Revenue £529.6m, adjusted operating profit £41.0m (margin 7.7%). Volumes up 3.5% thanks to a major long-term contract, but mix shift and labour/service inflation squeezed margin. Germany and France improved; UK softer; Italy challenging but expected to improve.
- Unit Dosing: Revenue £228.9m, adjusted operating profit £22.5m (margin 9.8%). Outperformed a shrinking market through efficiency, cost control and better service. Two new contract manufacturing agreements launched and capacity expanded.
- Powders: Revenue £85.5m, adjusted operating profit £6.8m (margin 8.0%). Revenue fell on delayed launches and weaker UK demand, but margin improved via cost discipline and efficiency.
- Aerosols: Revenue £58.9m, adjusted operating profit £3.1m (margin 5.3%). Standout revenue growth of 18.3% at constant currency on contract wins and geographic expansion, especially in Germany.
- Asia Pacific: Revenue £23.6m, adjusted operating profit £1.1m (margin 4.7%). FX and delayed Australian launches held the region back, though Vietnam contract manufacturing volumes grew strongly.
Transformation programme and the SAP step-change
The five-year Transformation is on track to deliver £50m net benefits by 2028, contributing £5.0m this year. Factory productivity and safety continue to improve, and several plants hit record output. The SAP S/4HANA upgrade completed user acceptance testing in August 2025, with the first wave expected to go live in autumn 2025, supporting better analytics, planning and service.
Alongside “Commercial Excellence” and “Service Excellence”, this digital investment is designed to hard-wire the gains in margin, service and working capital discipline.
Cash, capex and the dividend: what it means for shareholders
Net capital expenditure stepped up to £30.4m as McBride invests for growth – including capacity expansion in the UK and the SAP programme. Tax paid rose to £17.9m as profits normalised across jurisdictions. Despite this, cash generation easily covered investment and debt reduction.
The Board proposes a final dividend of 3.0p per share, payable on 28 November 2025 to shareholders on the register at 5.00pm on 31 October 2025 (shares marked ex-dividend at 5.00pm on 30 October 2025), subject to AGM approval. With the RCF now unblocking distributions, McBride also has the flexibility to consider buy-backs in future, though none are proposed here.
In my view, reinstating the dividend is a strong signal: management believes today’s earnings and cash profile are sustainable, not transient.
Balanced view: the good, the not-so-good
Why I’m positive
- Debt down sharply to £105.2m and leverage a comfortable 1.2x.
- Service levels above 94% and contract manufacturing scaling fast, diversifying revenue.
- EBITDA margin 9.3% edging towards the medium-term goal; ROCE at a robust 33.0%.
- Refinanced, long-dated facilities and strong liquidity provide resilience and firepower.
What to watch
- Reported revenue declined slightly; Liquids margin slipped due to mix and cost inflation.
- Powders and Asia Pacific saw revenue pressure from delays and softer demand.
- The effective tax rate rose to 32% (from 28%), diluting bottom-line growth.
- Pension deficit remains at £23.0m with agreed contributions; the NTL vs Virgin Media ruling is disclosed as a contingent matter, though McBride and the Trustee do not expect additional liabilities.
- Branded promotional activity can still weigh on private label volumes if it intensifies again.
Outlook: steady progression with investment optionality
Early months of FY2026 show volumes in line with expectations. Private label share sits at an all-time high, the launch pipeline is healthy, and operational and cost programmes are set to support further profit progression. The balance sheet is now in a position to back medium-term investment and shareholder returns.
Overall, this reads as a mature, confidence-building set of numbers: not flashy growth, but dependable execution, strengthening customer partnerships and a clear route to compound cash generation. For investors, the dividend’s return, the disciplined leverage, and the structural gains from Transformation are the central themes for FY2026.
