HOUSEHOLD GOODS maker McBride sparked fears of job cuts among its 1,700 UK staff as it unveiled a major overhaul after warning over profits for the second time in three months.
The group, which supplies supermarkets with own-brand products from shower gels to dishwasher tablets, said it was leading a review of its UK operations that was likely to lead to a “significant restructuring of our activities, including capacity reduction”. It will give more details in its next trading statement in June.
McBride employs around 1,700 staff in the UK out of a 5,000 overall workforce and has factories at Barrow in Cumbria, Bradford, Hull and Middleton, near Manchester, where it is also headquartered.
It has a further 13 plants across southeast Asia and Europe.
McBride employs 240 people in Hull, where it makes aerosols for household and personal care. In Bradford, it makes personal care and laundry liquids and employs 340 people.
The Oven Pride maker unveiled its restructuring plans as it said annual profits for the year to the end of June were set to miss forecasts.
Revenues have fallen 4 per cent year-on-year since the beginning of January, with private label sales 2 per cent lower due to an “extraordinarily weak retail environment” in the UK and Italy.
Intense competition and promotional activity has also hit trading, it added.
The group warned over first half profits in January due to the competitive conditions in the UK, reporting an 11 per cent drop in interim underlying earnings a month later.
McBride said it expects an improvement in trading over its final quarter thanks to product launches, but said this would be offset by the tough UK and Italian trading conditions.
Shares plunged 10 per cent after its profit alert.
The firm was founded by Robert McBride in 1927 in Manchester to supply chemical processing products to Lancashire’s cotton industry.
Analysts at Panmure Gordon said: “The outlook remains uncertain for the UK and until we have a better understanding of the impact of the planned restructuring of the business we move our recommendation from buy to hold. Restructuring of the UK business is necessary and should allow this business to deliver improved margins over the medium term.”
Shares closed at 95.75p, giving McBride a market capitalisation of £174m.