McBride rallies as Numis upgrades to 'buy', lifts target price

McBride’s shares rose on Monday after Numis raised its rating on the stock to ‘buy’ from ‘hold’ and lifted its target price to 191p from 183p.

The maker of retailer own brand household and personal care goods said in a trading update on Monday that it expects full year adjusted operating profit will be slightly ahead of its previous estimate.

The group said it has benefitted from cost saving initiatives, including the restructuring of the UK business.

However, the company sees full year sales lower by about £6m as a result of its decision to cut back on the number of small customers it serves.

McBride said revenues also continued to be affected by ongoing price pressures in a number of key markets, especially in the UK where the pound has plunged.

“Consequently, on a constant currency basis, group revenues for the year ended 30 June 2016 were 1.9% lower than the prior year," it said in a statement.

McBride added that there has been no impact to date on the group's day-to-day operations from the outcome of the UK's EU referendum on 24 June. The firm said it “remains too early to determine the longer-term effects on McBride's activities, of which approximately 70% are in subsidiaries based outside the UK”.

The company said its ‘Manufacturing our Future’ strategy, through the three-stage ‘Repair, Prepare, Grow’ implementation plan was on track.

Numis said the update was “solid with the radical simplification programme on track, epitomised by how McBride commenced this full year with only 150 (versus 600) customers”.

Shares jumped 6.38% to 162.75p at 1317 BST.