McBride PLC (LON:MCB) has raised its profit expectations for the year to June 30, 2021, as the first half of the year is expected to see a material improvement in earnings.
The cleaning and hygiene products maker said profit before tax is expected to be at least 10% ahead of the current market consensus of GBP25.2mln.
However, the group said it remains mindful of the uncertainty created by Brexit and coronavirus (COVID-19), while it estimates increases in certain input costs in the second half.
In the six months to December 31, 2020, McBride said sales are expected to grow by 2% compared to last year, albeit favoured by a weak November and December trading period in 2019.
The improved revenue performance combined with continued factory efficiencies, limited operational impact from COVID-19, lower than expected operating costs and input costs for certain raw material and packaging items, is forecast to lift earnings, it added.
The firm saw a spike in demand for its cleaning, dishwashing and aerosol products when the coronavirus pandemic started, but trading began to normalise as consumer behaviour returned to pre-coronavirus patterns in the summer, it said.
Analysts at Peel Hunt upgraded the stock to ‘add’ from ‘hold’ and raised the target price from 70p to 75p on the back of the positive update.
“A more settled trading performance should lead to a higher rating,” they commented, raising the profit before tax forecast to GBP28mln from GBP26mln.
Shares advanced 9% to 72p on Friday morning.
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