Sustained private label profitability

McBride’s H126 results confirm that for the third year running, demand for private label cleaning products remains at high levels, with private label volumes +0.9%, and Adj. EBIT margin a robust 6.6%.

Management has confirmed that H2 has started in-line with expectations and that new contract wins across divisions underpin the positive outlook for H226 and into FY27E. Material costs are expected to remain flat and, with overhead costs under control, management is confident in meeting consensus expectations for FY26E of c.£64.7m Adj. EBIT.  

Given the group’s improved profitability, ROCE has sustained a jump to 30%+ (30.8% in H1). Yet, McBride is trading on only c.6.6x cal 27 PER, significantly below the rest of the consumer sector.

We see scope for a significant rerating and, as we move to 2027 valuation metrics, we raise our Fair Value from 235p to 245p per share (equivalent to a c.6% cal 27 FCF yield).