McBride’s H126 trading update confirms that demand for private label cleaning products remains at high levels, with volume growth of 0.4% and total sales growth of 0.8%. Moreover, McBride continues to win new contracts leading to management’s confidence in achieving FY26E expectations of Adj. EBIT of c. £64m.
High levels of private label penetration were sustained across Europe’s largest markets in McBride’s H126 and despite some pressure on average selling prices, profitability has been sustained through product engineering and excellent cost control and service. New contract wins across divisions underpin the positive outlook for H226 (and beyond) and management is confident in meeting consensus expectations for FY26E of c.£64m Adj. EBIT.
ROCE has sustained a jump to 32%-33% and net debt is only 1.4x EBITDA. Dividends were reinstated in FY25 and having announced a £20m share buyback last November, we raise our Adj. EPS forecasts by 7%-8%.
Yet despite rallying c.30% since November the stock is still trading on only 5.7x cal 2026 PER and we see scope for a significant rerating towards our 235p Fair Value (equivalent to a c.6% cal 26 FCF yield).
