Business Overview
McBride Plc (LON: MCB) is a Household Goods company, providing personal care products and private label household. The company develop, produce and supply its production to Europe based retailers. The company’s brand portfolio includes Ovenpride, Limelite, McBride Direct, Clean and Fresh and Surcare.

Recent News
Elizabeth McMeikan had been appointed by the company which was announced on 14^th November 2019. She would join the company as a Non-Executive Director. She would take the responsibility with immediate effect. Elizabeth has rich experience in the consumer sector and the retail sector. She has worked in operations and marketing roles at some big companies such as Colgate Palmolive and Tesco.

Trading Update - H1 Financial Year 2020
On 14^th January 2020, the company announced its half yearly trading update ended on 31^st December 2019.  The company's first half Household revenues at constant currency were 1.4 per cent lower compared to the prior year due to continued slowdown. UK revenues in H1 FY2020 were 8 per cent lower against H1 FY2019.  The company has reduced its expectations for the remaining year and now expected full year Household revenues to decline by approximately 2 per cent year on year. Raw material and packaging costs were in line with the company’s expectations.  The company is expecting cost improvement initiatives would increase benefits in the second half of the fiscal year. Full year adjusted PBT is expected to be around 15 per cent lower than current market expectations. Net debt at the end of 31^st December 2019 was GBP 113.5 million (30 June 2019: GBP 120.9 million) excluding the effect of IFRS 16.

The company would announce its interim results on 20 February 2020.

Share Price Performance

Daily Chart as on 15^thJanuary 2020, before the market closed (Source: Thomson Reuters)

On January 15^th, 2020, McBride Plc shares were trading at GBX 65 at the time of writing before the market close (at 12:20 PM GMT), down by 2.35 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 136.75/GBX 44.71. The stock price has given negative 50.30 per cent returns during the previous year and negative 22.98 per cent return in the last one month. The average volume of McBride Plc is 368.24 thousand.

Valuation Methodology


*Peers: Premier Foods Plc, Innovaderma Plc, Accrol Group Holdings Plc, Bakkavor Group Plc and Venture Life Group Plc

Conclusion
The company has delivered a weak financial performance in the first half of the financial year 2020. However, the company’s South, East and Asian geographies business have performed well in the half year, reporting growth compared to the same period last year of 15.7 per cent, 1.6 per cent and 10.7 per cent respectively. The company’s overall revenue has declined. The company has lowered the full year growth expectations. Logistics cost of the company is increasing. The company is facing Brexit uncertainty which could affect its operations. Adverse economic conditions could impact the revenue and profitability of the company.

Based on the valuation and factors as highlighted above, we recommend investors to keep a “Watch” on the stock at the current price of GBX 66.90 (as on 15th January 2020, before the market close at 8:50 AM GMT), with support from few catalysts needs to be evaluated at a later stage. 
 
*All forecasted figures and peer information have been taken from Thomson Reuters.

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