A long-term tie-up with the owner of Air Wick and Cillit Bang hands the private-label manufacturer a £170m revenue boost and two Iberian factories for a nominal sum.
McBride (LSE: MCB) shares jumped 10% after the private-label cleaning and hygiene products maker unveiled a major new contract manufacturing partnership with Vestacy, the household brands group behind Air Wick, Calgon, Cillit Bang and Mortein.
The move came after McBride said the tie-up, comprising two long-term contract manufacturing agreements running five to eight years, would ultimately generate around £170m in annual revenue by the second half of the 2028 financial year, equivalent to roughly a 15% uplift to group turnover.
The bulk of the new work sits in laundry, a category McBride has flagged as a strategic growth priority, and much of the volume is currently produced for Vestacy by a rival manufacturer. As part of the arrangement, McBride is acquiring two dedicated Vestacy production plants in Spain and Portugal for a nominal consideration, with output shared across those sites and its existing factories in Belgium, Italy, Poland, the UK and France.
Chief executive Chris Smith described the transaction as 'a disciplined application of our capital allocation framework', arguing it validates the value embedded in the group while allowing McBride to expand its European manufacturing footprint. He said securing the two sites so cheaply, backed by long-term, highly visible contracts, would accelerate the company's growth ambitions in laundry specifically.
McBride expects the deal to be materially earnings accretive, with margins broadly in line with the wider group and earnings per share growth tracking revenue growth. Investors will now watch for further detail on the additional contracts being signed alongside the Vestacy agreements, as well as progress integrating the two new Iberian plants ahead of the revenue ramp-up expected in the 2028 financial year, all while the group continues its existing share buyback programme.
This report is based on McBride’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Lalit Kumar on Unsplash.
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