Cleaning products maker McBride said on Thursday 'exceptional price increases' in raw materials as well as a lack of lorry drivers would push fiscal 2022 profits down by as much as 65%, sending its shares tumbling 17%.
'Although only seven weeks into the new financial year, the previously highlighted raw material environment remains extremely challenging both in terms of exceptional price increases and supply availability,' the company said in a statement.
It said adjusted pretax profit for the year ending 30 June, 2022 will be 55%-65% lower than the current analyst consensus for fiscal 2021.
McBride, which sells more than 1 billion products each year, said that while customers had agreed to price increases, "the effective start dates for those hikes were later than hoped for".
Variable Pricing Surcharge
The company said it was seeking a variable pricing surcharge to sales contracts, based upon certain key commodity prices.
"Although disappointing, this is not a big surprise given the extent of the input cost inflation and general supply chain issues," Peel Hunt analysts said.
They estimated cost increases to have been £8 million in the second half of last year and £30 million for the current year.
The company had reported overall cost of sales of £463 million for fiscal 2021.
Several blue-chip companies including consumer goods giant Unilever, Reckitt and packaging producer Smurfit Kappa have also warned on the impact of cost pressures from commodities.
In Britain, companies are also struggling with a shortage of lorry drivers due in part to the pandemic and European workers leaving the country following Brexit that has aggravated the situation.
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