British cleaning products maker McBride said it expects first-half adjusted operating profit to rise about 8%, driven by higher manufacturing volumes from consumer goods client contracts, and plans to re-instate annual dividends.
Shares in the company were up about 7% at 108.5 pence.
The London-listed owner of brands such as 'Clean N Fresh' and 'Oven Pride' had suspended its dividends in 2020 due to financial uncertainty triggered by the COVID-19 pandemic.
However, in September 2024, McBride announced that under the terms of a revolving credit facility it entered in 2022, it cannot pay dividends until certain exit event conditions are met.
'Capital Allocation Options'
'The recent, new, long-term financing facilities have allowed the normalisation of the group's capital allocation options,' the company said in a statement. As a result, it now intends to reintroduce dividends.
McBride expects interim group revenue to be 2.9% higher on a constant currency basis.
"The announcement today that it plans to pay a dividend for FY25 signals its confidence in the sustainability of the recovery and its increasing balance sheet strength," said Matthew Webb, an analyst at Investec.
In August of last year, the company announced the appointment of Paul Boardman as the new programme director for implementing its new enterprise resource planning (ERP) system.
At the time, McBride noted that the new ERP system will enable the company to swiftly respond to its retail and contract manufacturing customer demands, boost production volumes, and improve internal efficiencies.
The introduction of the new ERP system, in association with SAP and NTT DATA Business Solutions, is the contract manufacturer's largest critical project in terms of cost investment and scale.
News by Reuters, additional reporting by ESM.
