By Muhammed Husain
(Reuters) -British firm McBride said it will look to raise prices of its cleaning products after rising costs and supply chain pressures sent the maker of Oven Pride to a half-year loss.
"The group is experiencing the most extreme inflationary cost environment probably ever to hit this sector," CEO Chris Smith said in a statement.
The warning from the maker of Surcare detergent comes with UK consumer price inflation around its highest level in nearly 30 years.
The group reported an adjusted half-year pretax loss to Dec. 31 of 16.9 million pounds ($23 million) versus a profit of 16.9 million a year earlier.
McBride said the loss was caused mainly by surging costs of raw materials, packaging and logistics. It said it raised end-consumer prices once again after a hike during the summer, and noted this helped the business beginning in December.
It now expects to be "close to break-even" at an earnings before interest, taxes, and amortisation (EBITA) level in the final quarter of the year ending June 30, before moving on to modest profits in the following year.
The outlook, however, rests on the outcome of its discussions with business customers about price hikes, as well as future inflationary pressures, Smith said.
"Although demand is currently stable, it remains to be seen whether the company retains business if customers chose to retender contracts in future," analysts at Peel Hunt said.
Its London-listed shares were down 6.3% at 45.0 pence as of 1126 GMT.
Helping drive inflation are global supply chain bottlenecks as the pandemic slows work at docks, creating logjams for container ships.
McBride's larger rival Reckitt Benckiser last week reported a 12% fall in annual earnings amid soaring energy, transport and other costs, but forecast margins would rise in 2022 helped by price increases.
($1 = 0.7362 pounds)