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Everyday
cleaning
products,
expertly
made
McBride plc
Annual Report and
Accounts 2024
McBride plcAnnual Report and Accounts 2024
Strategic Report
Our Highlights 1
McBride At A Glance 2
Chairman’s Statement 3
Our Markets 4
Our Business Model 5
Our Strategy 7
Our Values 10
CEO’s Report 11
Our Divisions 13
CFO’s Report 18
Our Key Performance Indicators 21
Our Stakeholders 22
Sustainability 25
Climate-Related Financial Disclosures 36
Non-Financial and Sustainability
Information Statement 51
Our Principal Risks and Uncertainties 53
Going Concern and
Viability Statement 60
Governance Report
Chairman’s Introduction to
Governance Report 61
Our Board 62
Compliance with the UK Corporate
Governance Code 2018 64
Corporate Governance Statement 65
Nomination Committee Report 71
Audit and Risk Committee Report 76
Remuneration Committee Report 83
Statutory Information 103
Directors’ Responsibilities Statement 107
Financial Statements
Independent Auditors’ Report 108
Consolidated Financial Statements 115
Notes to the Consolidated
Financial Statements 121
Company Financial Statements 172
Notes to the Company
Financial Statements 174
Group Five-Year Summary 181
Additional Information
Shareholder Information 182
Registered Office and Advisers 184
Please note, throughout this report
McBride plc is referred to variously as
‘McBride’, the ‘Company’ or the ‘Group’.
Contents
Our
Strategy
on pages 7 to 9
Our
Divisions
on pages 13 to 17
Sustainability
on pages 25 to 35
As part of our ongoing commitment to sustainability, we have takena‘digital-first’
approach, printing only a small number of copies of this Annual Report & Accounts
on100%recycled paper.
www.mcbride.co.uk
Visit us online:
Our Highlights
Revenue
£934.8m
(2023: £889.0m)
Adjusted EBITDA
(1)
£87.1m
(2023: £34.1m)
Adjusted operating profit
(1)
£67.1m
(2023: £13.5m)
Operating profit
£64.3m
(2023: £10.3m)
Adjusted profit
before tax
(1)
£53.1m
(2023: £0.3m)
Profit/(loss)
before tax
£46.5m
(2023: £(15.1)m)
Adjusted return on capital
employed (ROCE)
(1)
33.5%
(2023: 6.4%)
Net debt/adjusted
EBITDA
(1)
1.5x
(2023: 4.9x)
Free cash flow
(1)
£81.7m
(2023: £38.0m)
Liquidity
£98.3m
(2023: £59.3m)
Total volume growth
5.7%
(2023: 5.6%)
Laundry volume growth
8.0%
(2023: 6.5%)
Private label volume growth
7.2%
(2023: 7.0%)
Private label share of household
35.4%
(2023: 33.3%)
Divisions growing
profit
Five
(2023: Five)
Transformation
programme
On track
Science Based Target initiative (SBTi)
Committed
Green energy usage
54.9%
(2023: 42.1%)
Financial highlights Strategic highlights
(1) Further details on APMs can be found in note 2 to the consolidated financial statements on pages 132 to 134.
Alternative performance measures
This report includes alternative performancemeasures (APMs) that are presented in addition to the standard
International Financial Reporting Standards (IFRS) metrics. The APMs
(1)
used are adjusted operating profit;
adjusted EBITDA; adjusted profit before tax; adjusted profit for the year; adjusted EPS; free cash flow; cash
conversion %; adjusted ROCE; liquidity; net debt; net debt cover ratio and interest cover ratio.
Strategic Report Governance Report Additional InformationFinancial Statements
1
McBride plc Annual Report and Accounts 2024
Ho Chi Minh City
Kuala Lumpur
Middleton
Étain
Bagnatica
Sallent
Strzelce
Foetz
Holstebro
Estaimpuis
Hammel
Moyaux
Rosporden
eper
McBride At A Glance
Our manufacturing locations
With trading roots dating back
to1927, McBride boasts a strong
heritage. As the leading
European manufacturer and
supplier of private label and
contract manufactured products
for the domestic household and
professional cleaning and
hygiene markets, McBride offers
end-to-end development
andmanufacturing capabilities
to a wide range ofcustomers
in Europe and Asia Pacific.
Watch corporate video online
See more about our divisions on pages 13 to 17
Asia PacificEurope
78%
of revenue from top
five European economies
>90%
of top European
retailers supplied
>1bn
units sold
3,695
colleagues globally
(1)
Liquids
57.0%
Unit Dosing
25.0%
Powders
9.9%
Aerosols
5.5%
Asia Pacific
2.6%
(1) Includes employees, third-party contractors,
consultants and agency workers.
Group sales by division
Key:
 Liquids
 Unit Dosing
 Powders
 Aerosols
 Asia Pacific
Strategic Report Governance Report Additional InformationFinancial Statements
2
McBride plc Annual Report and Accounts 2024
Chairman’s Statement
Dear shareholder
Welcome to the McBride 2024 Annual
Report and Accounts.
I am delighted to report an excellent
full-year performance by the Group. Led by
our committed executive team, McBride and
our specialist divisional teams have built
on the solid recovery in 2023 and delivered
an impressive turnaround, which has set a
strong platform for further financial success.
Strong full-year performance
For the year ended 30 June 2024,
the Group has substantially increased
revenue and delivered on upgraded profit
expectations, with each of its five divisions
growing profitably. Whilst the ongoing
cost-of-living pressure on consumers across
our geographies has fuelled a transition
towards value products and private label,
it is McBride’s strategic and operational
execution that has ensured the Group has
been able to capitalise on the market trend
and ensure consumers are provided with the
products they desire and need.
In addition, a key driver for this impressive
financial performance has been the strategic
focus of McBride’s divisional teams to build
closer customer relationships. The full-year
results demonstrate the significant strategic
benefit of building these partnerships and
what it means to have such depth of market
knowledge possessed by our teams.
Strategic and operational progress
At our Capital Markets Day (CMD) in March
this year, the executive and divisional teams
presented the Group’s progression against
the Compass strategy which was designed
to deliver divisional focus, specialism and
accountability. Now, having successfully
executed on its objectives, the foundation
has been laid for McBride to progress its
Transformation programme which will
enhance the Group’s operational, service
and commercial capability.
Importantly, the successful implementation
of the Compass strategy has continued to
enhance shareholder value, as demonstrated
by McBride’s consistent market valuation
appreciation since it was launched in 2021.
The Group is now in a strengthened financial
position having materially reduced the debt
level during the year, in line with our stated
ambition at the CMD.
Sustainability
We continue to ensure that a focus on
sustainability is embedded throughout our
business, with climate objectives closely
aligned to our fundamental values and key
to our strategy. Importantly, McBride has an
established governance structure to provide
a high level of expertise and oversight to
deliver on key initiatives. The Group has
also made the significant commitment to
science-based targets for Scope 1, 2 and 3
emissions, which cover operations, supply
chain and our product portfolio.
On pages 25 to 35 we explain our approach
to enhancing the sustainability of our
business, whilst outlining some of the key
initiatives we are taking to create value for
our customers, employees, shareholders
andsociety.
Governance
The Board remains focused on ensuring
that the UK Corporate Governance Code’s
Principles are applied. My introduction to
the Governance Report on page 61 sets
out how the Board has complied with the
Principles of the UK Corporate Governance
Code 2018 (‘the Code’), which were applied
throughout the financial year ended
30June 2024.
Our people
The Board would like to thank all colleagues
across McBride for their commitment
to ensuring we meet our customers’
requirements, and their relentless drive to
innovate and adapt to changing consumer
needs. Our executive management and
teams have demonstrated an outstanding
ability to combine their market knowledge
with customer engagement and innovation
to consistently deliver high-quality products
to market.
The Group has a clear strategy and
a direct line of sight for further value
creation opportunities. I look forward to
our future with confidence as we build on
the significant progress of our Compass
strategy and the implementation of the
Transformation programme to take the
business through its next stage of growth.
Jeff Nodland
Chairman
Building on the momentum
from 2023, McBride has
performed a significant
turnaround and achieved
anoutstanding full-year
result.
Jeff Nodland
Chairman
3
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Our Markets
Raw materials
There has been a general
stabilisation in raw material
costs, with the overall
environment remaining
relatively benign. Certain
materials, particularly
recycled materials and
alcohol-based products, are
seeing some upward cost
pressure.
Response
We continue to maintain
a prudent, cost-conscious
approach whilst working to
develop innovative solutions
to mitigate inflationary
pressures. Notably, our
divisions are focusing
on greater compaction
and working to enhance
product formulations and
concentration levels to
preserve andenhance
margins.
Sustainability
McBride’s customers,
consumers and employees
continue to place a high
level of importance on
the sustainability of its
manufactured products.
Response
Improving sustainability is
a core component of our
corporate strategy. We
have now set science-based
targets for our full supply
chain and established a
dedicated sustainability
team to lead our climate
risk initiatives. Our product
development teams
continue to be committed
to sourcing the most
appropriate raw materials
and, by understanding the
carbon footprint of those
components, they make the
most appropriate product
choices. They continue to
promote products that can
be reused and drive further
formulation compaction.
As we strive to achieve our
science-based targets, we
are collaborating actively
with our customers, suppliers
and employees to implement
meaningful actions that
further minimise our
environmental impact.
Regulation
The regulatory landscape for
McBride is rapidly evolving,
driven by the EU and UK’s
push towards Net Zero and
other green policies. Whilst
these changes may increase
operational costs, they
also present opportunities
to innovate and develop
sustainable products that
align with legal requirements
and meet customer demands.
Response
Compliance with legislation
is central to our full service
offering to our customers.
We fully support initiatives
that enhance safety and
sustainability for consumers
and the environment.
Toachieve this, we invest
heavily in our operations and
continuously improve our
product portfolio, ensuring
we not only meet, but exceed,
all relevant standards.
Sales channels
Despite the rates of inflation
slowing in the second half
of the year, cost-of-living
pressures remain significant,
meaning that shoppers are
focused on value. Retailers
are demanding extended
ranges of everyday value
household products to meet
demand. Thereare signs
of increasing competitive
pressure, with branders
beginning to engage inmore
promotional activity, which
can impact on private label
share.
Response
We continue to support
our retail partners and
customers to ensure we
deliver market-appropriate
and channel-relevant
recommendations. Through
our innovation and product
development, we deliver
products at the price
andrange that consumers
require, and which achieve
consistently high-quality
cleaning across all
productformats.
Consumers
Pressure on consumer
discretionary spend means
that whilst shoppers have
moved towards private
label, they also demand
high-quality products at
value pricing to service their
everyday needs.
Response
Through our product
development and market
expertise, our divisions create
award-winning products
that offer high-quality and
great value products to
the consumer. We can then
ensure consumers have
clean and hygienic living
environments despite the
pressure on their spending.
We also continue to
develop new ranges with
a focus on sustainability,
providing enhanced cleaning
capacity through smaller
doses, reformulation and
compaction initiatives.
Brand owners
Owners of household
cleaning and personal care
brands sometimes outsource
the manufacture of their
products to private label
suppliers, such as McBride.
This may be because they
lack capacity or specific
technologies in their own
manufacturing facilities, want
to bring new innovations to
market more quickly, or want
to reduce their operational
footprint.
Response
Our knowledge, ability,
scale, professionalism and
reputation for manufacturing
high-quality products assures
major brand owners that
we are the right partner to
support their innovation
or strategic outsourcing
objectives. Such contracts
offer significant growth
opportunities, de-risk
margins and drive operational
efficiencies by increasing
asset utilisation.
4
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Our Business Model
How we do it
Customer focus R&D expertise
We sell to retailers and branders their
finished products, as well as a small
number of McBride brands.
The Group has well-established
market positions in all major European
economies and supplies its products to
a wide range of customers, including
virtually all of Europe’s leading retailers.
Best-in-class expertise and know-how in:
• Formulation
• Prototyping
• Sourcing
• Manufacturing
• Packaging
Our sales
What sets us apart
Four pillars underpin
ourstrategy:
Market standing
• Wide market coverage/knowledge
from pan-European operations
• Reduced risk from customer
diversification
• Scale advantages: largest
volumeplayer
• Blue-chip reputation
Operational excellence
• Manufacturing excellence
• Supply chain co-ordination
andcapabilities
Sustainability
• Innovation: specialisation andfocus
• Sustainable product expertise:
formulation and packaging
Talent
• Experienced management
anddedicated employees
Our vision
McBride will extend its position
as the leading European
manufacturer and supplier
ofprivate label and contract
manufactured everyday value
cleaning products, through
focused and sustainable
divisional strategies.
 Private
label
84.5%
 Contract
manufacturing
12.4%
 McBride
brands
3.1%
Our values
Always
committed
Givingand taking
accountability
Working
together
Aspire to
be thebest
Our purpose
Everyday value cleaning
products so every home
canbeclean and hygienic.
Our guiding principles
Focused
growth
Effective
execution
Proud of our
identity
5
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Our Business Model continued
How we do it continued
Production process Distribution efficiency
We are end-to-end producers:
From:
• Resins
• Base chemicals
• Packaging
To:
• Shelf-ready finished products
Our in-house processes:
• Blow/injection moulding
• Liquid and powder mixing
• Bottle filling
• Capsule forming and filling
• Tablet pressing
• Powder filling
Consolidating the
customer requirements via:
McBride warehouse network
Into
Customer distribution hubs
Who we create value for
Our workforce Our customers
With our values-based culture, we
are committed to creating the best
possible working environment where our
employees feel included, engaged and can
achieve their full potential.
We follow a ‘customer focus’ approach,
building strong, collaborative customer
relationships to drive high customer
service levels and develop and
manufacture innovative new products.
Our suppliers Our shareholders
We believe that our suppliers should have
the opportunity to benefit from their
relationship with us. Effective supplier
relationships allow us to make high-quality
everyday value cleaning products.
We work to deliver long-term, sustainable
growth of the Group, to provide enhanced
shareholder value through our financial
performance and focus on long-term
valuecreation.
Our communities
We acknowledge our responsibility to actively engage with and support the local
communities where we live and work, extending beyond merely providing employment.
6
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Our Strategy
Our Transformation programme
Winning in a growing market
McBride operating model
We support divisional success by leveraging the scale of the Group through effective
central teams for purchasing, talent management and other shared services
Our strategy remains unchanged: to be the
leading value producer of everyday cleaning
products, leveraging scale and unrivalled
product expertise to deliver a segmented
product and customer proposition with a
cost-aware sustainability agenda.
The implementation of the Compass
operating model has delivered divisional
focus, specialism and accountability,
underpinned by shared services that
delivereconomies of scale for the Group.
Our divisional structure supports our
ambition to expand our position as the
leading value label producer of everyday
cleaning products and being the preferred
partner for our customers.
We achieve this ambition in several ways.
We grow and win across all laundry
categories. We lead with the largest
retailers in the top five economies, growing
disproportionately with the discounters. We
shall expand our number one status in the
UK, France and Italy to Germany and Spain,
as well as grow in contract manufacturing,
which we are targeting to grow to a
25%share of the Group’s revenue.
These targets will be met as we strengthen
our customer centricity, from joint value
creation to service and quality excellence,
and as we maintain the most competitive
product portfolio in the sector. Our business
Transformation initiatives are driving
excellence in core activities, generating
£50million in benefits over five years,
while our focused, accountable and
expert divisional teams lead a cost-aware,
innovation-led sustainability agenda.
One McBride
Shared services
Divisional
strategies and
Group strategy
Building oninitial
three-yearphase
Focus and
accountability
Responsiveness
Scale benefits from
sharedservices
People empowered
andengaged
Customer
interface
Gold programmes Silver programmes
Operating Systems Excellence
• Deployment of SAP S/4HANA
Enterprise Resource Planning
platform across Europe
• Target first deployment in UK in
first half of 2025
Commercial Excellence
• Sales & Marketing training and
development
• Commercial processes, new tools
and insights
Service Excellence
• Improved, consistent and
transparent service
• Demand planning, supply
chain planning and inventory
optimisation
• Logistics network evolution
HR Digital Excellence
• Modernisation of core HR platform
• Digitisation of payroll operations
Contract Manufacturing Excellence
• Thought leadership in packaging
and product innovation
• Moving from ‘fast follower’ to
‘innovation leader’
Operations & Overheads Excellence
• Production process re-engineering
• Aligning overheads to volume
growth
Our strategy and targets are clear
• Drive private label market share
• Focus on key growth opportunities:
• Laundry
• Germany
• Spain
• Increase contract manufacturing
share of revenue
• Deliver Transformation programme
enhancing excellence in core
activities
• Explore additional value
opportunities
7
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Our Strategy continued
Cost
leadership
Product
leadership
See more online See more online
Our market
• All categories supplied in
liquidsform
• Regional business
• Innovation focus driven
bysustainability
• Private label share gain
Compass priorities
1. Simplified portfolio,
increasingcompetitiveness
2. Lower cost
3. Enhanced customer proposition
4. Focused growth
Compass next phase
• Product sustainability to drive value
growth
• Generate value at competitive price
• Build valuable
customerrelationships
Each division has specialist teams
embedded in their markets, bringing
a unique level of knowledge
andexpertise.
Our model means divisions can target
different opportunities, initiatives,
challenges and improvement options;
all reinforcing the need for varying
strategies for the different parts of
this business.
Hence, the Group continues to be
managed as a series of portfolio
businesses, each with its own identity,
strategy, operating model and role
within the Group.
Separate, focused and accountable
divisional teams strengthen our
leading market position and improve
speed and agility in all our activities.
Our market
• Convenient and sustainable format
• European business
• High pace of innovation
Compass priorities
1. Become specialist supplier
2. Be embedded in the industry
3. Accelerate efficient innovation
4. Invest behind right asset base
5. Be more cost competitive
Compass next phase
• Lead as the specialist supplier
• Be ever closer to customers
andsuppliers
• High pace innovation–
sustainableand compact
• ‘FleXellence’
Five divisions
One McBride
See more online
8
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Our Strategy continued
Cost and
value leadership
Product
leadership
Cost
leadership
See more online See more online See more online
Our market
• The fastest growing
economyworldwide
• Growing middle class
prioritisinghealth & wellness
• Increased awareness
ofenvironmental issues
• Fragmented, localised supply base
Compass priorities
1. Invest in flexible
manufacturingcapacity
2. Develop household and
regionalformat capability
3. R&D drive behind sustainability
4. Wider relationships for new growth
5. Keen cost focus
Compass next phase
• Leveraging capacity
• Developing relationships
forcontract manufacturing
• Lead through innovation
andsuperior service
• Target further cost efficiencies
• Extend regional reach
forprivatelabel
Our market
• A growing market
• Strong manufacturers
inkeymarkets
• Sustainability is a top priority
Compass priorities
1. Expand horizons beyond France
2. Build on operational excellence
3. Capitalise on innovation
andecocredentials
Compass next phase
• Innovation remains key
• Collaborate with customers
togrowmarket reach
• Expand into new territories
• Invest in additional
capacityandcapabilities
Our market
• Declining market overall in Europe
• Private label gaining share
overbrands
• Germany and UK still
heavypowderusers
• Surplus industry capacity
Compass priorities
1. Low cost
2. Asset utilisation
3. Technical capability upgrade
4. Targeted market opportunities
Compass next phase
• Be the clear low-cost leader
• Improved utilisation for cost
andcapacity
• Continued technical capability
upgrade, sustainability-led
• Targeted geography and
channelopportunities
9
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Giving and taking
accountability
ProjectWhite
During 2024, we executed Project White
– an upgrade and expansion of our bleach
capacities in our Liquids factories in eper
(Belgium) and Étain (France). This significant
investment included a new automatic mixing
system, expanded bottle filling capacity,
upgrades to filling lines and essential
infrastructure development. The investment
programme followed discussions with potential
newcustomers.
The multi-functional project team faced
challenges, such as long lead times for
equipment due to material shortages.
However,despite these obstacles,
theoperational management teams at both
sites embraced the extra accountability,
diligently working towards the complex
project goals, with a real sense of pride and
empowerment. Human Resources played a
crucial role in recruiting resources for the
sizeable new business. The ‘One McBride’
team demonstrated ownership and teamwork,
makingdecisions to deliver the project on time
and within budget. Successfully manufacturing
for our first new customer in March 2024
stands as a testament to their commitment and
accountability.
Working
together
‘McBride Gives’ volunteering scheme
‘McBride Gives’ is an initiative designed to
provide our colleagues and all McBride people
with an opportunity to make a difference.
Through engaging with local communities,
offering not only time, but also resources, such
as clothes, blankets and flasks, we are trying to
make the world a better place.
Our new ‘McBride Gives’ volunteering scheme
had a positive impact on the local community
of Opole, Poland, this year. More than 50
colleagues from our Strzelce site dedicated a
day to volunteering at the House of Hope.
The House of Hope is a charitable organisation,
operated by volunteers and clergy, offering
essential support to homeless and poor
residents in the area. Beyond provision of
food, clothing, bathing facilities and other such
essentials, the House of Hope offers respect,
mercy and tolerance. This holistic package
uplifts spirits and restores dignity.
Aspire to
be the best
Commercial Excellence
In 2024, we launched our Commercial
Excellence programme – a strategic initiative
that will support our sales and margin growth
aspirations. This initiative directly aligns with our
core value of aspiring to be the best.
Programme objectives:
1. Bring clarity to our commercial
organisation’s roles and responsibilities,
meeting both colleague and business
expectations.
2. Establish a method to identify and address
training needs through competencies, which
will link into the McBride academy creation.
3. Streamline processes to simplify howwe
conduct business with customers,
implementing best-in-class processes that
will create value for both McBride and
ourcustomers.
4. Equip colleagues with modern systems,
processes and tools to enhance efficiency
and remove unnecessary burdens.
The guiding principles we adopted are a
consistent, programmatic approach applied
across our three largest divisions: Liquids, Unit
Dosing and Powders. Rather than ‘reinventing
the wheel’, we have leveraged past successes in
some areas.
By the end of the calendar year, the programme
will be fully rolled out and integrated into our
organisation. We will continue to strive for
excellence together.
Always
committed
SAPS/4HANA
To support our business strategy, we have
embarked on a transformation of our business
processes, enabled through the implementation
of SAP S/4HANA. SAP S/4HANA is a
cutting-edge Enterprise Resource Planning
(ERP) system that helps businesses to run
smoothly and efficiently. Built on the advanced
SAP S/4HANA database, it offers real-time
analytics and insights, which means we can
simplify complex processes and make quick,
informed decisions. By bringing together
key business functions, the system gives us
a complete view of our operations, boosting
collaboration and productivity.
We are currently collaborating withcolleagues
from all our sites, external suppliers and
customers to implement SAP S/4HANA.
Ourreadiness to embrace change,tackle
challenges head-on and maintain
acommitment to excellence lays the foundation
forthefuture. This transformation benefits
not only McBride, but also our customers
and suppliers. Byunifying our ERP system,
we will enhance our supply chain, improve
forecasting accuracy and respond more
swiftly tomarket demands. This streamlined
approach strengthens our partnerships and
enables us to provide even better service to our
customers.Throughadopting SAP S/4HANA, we
embody our ‘always committed’ value, leading
theway in innovation and operational excellence.
Our motivated teams are eager to deliver this
transformative programme for McBride and
make a meaningful impact.
Our Values
At McBride, our values are more than just words; they are commitments that guide everything we do.
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An excellent year of
operational and strategic
delivery, capitalising on the
consumer trend towards
private label.
Chris Smith
Chief Executive Officer
Overall business performance
It has been a year of significant growth
and progress for McBride, with the Group
delivering an excellent financial and
operational performance. All five divisions
maintained the positive momentum created
in the second half of 2023, generating profit
growth for the year, which is a testament
to our specialist teams and their ability to
execute our strategy. Whilst the consumer
trend towards private label has presented a
rising tide of potential growth opportunities,
it is McBride’s operational delivery that has
ensured such a strong trading and financial
performance.
It is also pleasing to report that the Group
continued to make good progress against
its strategic imperative of ensuring a safe
working environment. The lost time incident
frequency rate fell to 0.75 (2023: 0.88),
withnew tools and an online reporting
system being introduced. At the year end,
11 of the Group’s 15 manufacturing locations
had been free of lost time incidents for over
100days.
The Group continued to capitalise on higher
demand for everyday value private label
household cleaning products, with overall
sales volumes up 5.7% and private label
sales volumes up 7.2%. The strong demand
for McBride’s products was driven by a
combination of new business wins and
growth of existing private label products.
Whilst contract manufacturing volumes
were lower in the first half of the year
and for the year overall, they increased
by 13.4% in the second half, largely due
to strong fourth quarter volumes from
the commencement of a substantial new
long-term contract. In the second half, there
were some signs of increased promotional
activity from manufacturers of branded
products, but all divisions continued to see
solid demand for private label products.
Customer service levels (CSL) improved
by 2.5ppts compared to last year, with the
second half performance being over 3ppts
higher than the first half, as issues on a small
number of the Group’s manufacturing lines
were resolved.
The Group’s strong sales volume
performance resulted in revenue increasing
by 5.2% to £934.8 million (2023: £889.0m),
and adjusted operating profit of £67.1 million
(2023: £13.5m) being delivered slightly
ahead of upgraded market expectations.
The Group performed well in its strategic
focus areas of laundry and Germany, which
delivered sales volume growth of 8.0% and
6.2% respectively. Whilst the Group’s profit
performance has been driven in part by
sales volume growth, it was underpinned
by a combination of strong margin
management, improved operational output
and tight cost control in an inflationary
environment.
Net debt reduction has remained a key
area of focus for McBride. As presented at
the CMD in March 2024, net debt/adjusted
EBITDA is one of the primary financial
metrics used to measure progress against
the Group’s strategic priorities. Pleasingly,
this focus resulted in net debt closing at
£131.5 million, a £35.0 million reduction
versus the prior year (2023: £166.5m) and
a net debt/adjusted EBITDA of 1.5x, already
positioning the Group close to achieving its
net debt/adjusted EBITDA ambition of less
than 1.5x.
Inflationary environment
Over the course of the year, prices
for consumers continued to rise and
cost-of-living pressures resulted in
continued strong demand for good value,
high-quality private label products across
the Group’s markets.
The challenge for McBride has been
how to effectively and reliably serve the
significantly increased demand. As such,
the divisions have successfully focused
on efficient supply chain and logistics
management, with a key principle of the
business being its ability to deliver an
effective end-to-end supply chain solution.
The raw materials environment has been
relatively benign, with generally weaker
demand lowering input cost pressure, which
has supported McBride’s strong financial
performance. However, as the Group
exited the financial year, it has started to
see upward pressure on certain materials,
particularly recycled materials and natural
alcohol-based products, as customer and
consumer demand for these materials
continued to increase.
Strategic progress
At the CMD, McBride presented the
significant progress achieved in the
implementation of its Compass strategy
and outlined the key elements of its
Transformation programme. Importantly,
each division remains focused on delivery
of its key objectives, with the strategies
continuing to be as relevant today as they
were when they were first implemented
in2021.
In terms of the Transformation programme,
it is pleasing to report that the initiatives
are progressing to plan, as the Group
works towards its target of £50 million
of net benefits, annualising at £17 million
adjusted operating profit in 2028. The
focus at present is on the transition from
the technical design stages to a phased
implementation of three priority initiatives:
SAP S/4HANA; Commercial Excellence; and
Service Excellence.
One of McBride’s key strengths is the depth
to which its divisions are embedded in their
sectors and markets.
CEO’s Report
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Strategic progress continued
It is this focused specialism that provides
exceptional product and technological
knowledge, together with the ability to
adapt to changing customer and consumer
needs. Over the past two years, the Group
has developed closer partnerships with its
customers to enhance the value proposition
provided to them. In addition to creating
more dynamic pricing arrangements, the
clear customer-centric approach means that
the divisions can respond quickly and with
agility to evolving customer and consumer
needs, as well as having a better platform to
promote product innovations.
Innovation
The development of innovative products
remains at the heart of McBride and is a
driver of many of its new business wins.
Throughout the year, the divisions have
continued to create new solutions to meet
changing consumer demands and ensure
reliable delivery for their customers. A
common theme across the whole business
is the move to more compact or more
concentrated products, reducing the weight
of product to transport and the volume of
required packaging. Additionally, during
the year, Unit Dosing adapted product
packaging formats from plastic to carton
packs, Liquids introduced improved
product formulations, Powders developed
innovative solutions for greater compaction
and Aerosols introduced lighter-weight
packaging to mitigate the impact of input
cost pressures.
Sustainability
A commitment to sustainability, relevant
and tuned to the needs of our stakeholders
and wider society, is core to the Group’s
strategy and corporate proposition.
McBride continues to operate strong levels
of governance, as would be expected of a
listed company, and has made great strides
in engaging with its workforce and local
communities. During the year, McBride
appointed a small, dedicated team to drive
its environmental impact reduction plans.
The Group signed up to the SBTi, the only
major private label household supplier to
have done so, setting goals for the coming
years on all three carbon scopes. The
divisions’ research and development teams
work to ensure that each new product
launched is less carbon intense than the
one it replaces. Further detail on all of these
initiatives can be found on pages 25to 35.
Current trading and outlook
The first two months of the new financial
year have seen overall volume levels in
line with the Group’s expectations. The
overall market for household cleaning
products is showing volume growth,
and within that demand for private label
products remains robust in the face of
initiatives from branded manufacturers to
recover market share. The divisions have
a good pipeline of new product launches
and business wins ahead and continue to
prioritise growth initiatives. Input costs
for the main raw materials remain steady
overall, but with costs of recycled materials
and natural-based chemicals increasing in
line with expectations. The business will
continue to manage its margins through
informed and co-operative dialogue with
itscustomers.
CEO’s Report continued
The next year is a crucial period for a number of the Group’s Transformation projects,
especially the ‘gold programmes’, being the SAP S/4HANA ERP system upgrade,
Commercial Excellence and Service Excellence. The Group remains confident in the quality
of delivery and the benefits that will be delivered from these Transformation initiatives.
The Group’s outlook for the year is consistent with analyst expectations, which would
represent a third consecutive year of revenue growth, with profitability levels significantly
ahead of our historical average.
Revenue
2024
£m
2023
£m
Reported
change
Constant
currency
change
(2)
Liquids 532.8 497.9 7.0% 7.7%
Unit Dosing 233.6 234.2 (0.3)% 0.7%
Powders 92.8 85.9 8.0% 9.2%
Aerosols 50.9 46.2 10.2% 11.6%
Asia Pacific 24.7 24.8 (0.4)% 8.3%
Group 934.8 889.0 5.2% 6.2%
Adjusted operating profit/(loss)
(1)
2024
£m
2023
£m
Reported
change
£m
Constant
currency
change
£m
(2)
Liquids 45.6 10.5 35.1 35.0
Unit Dosing 19.4 10.0 9.4 9.2
Powders 6.0 (0.7) 6.7 7.0
Aerosols 2.1 0.3 1.8 1.8
Asia Pacific 1.4 1.1 0.3 0.4
Corporate (7.4) (7.7) 0.3 0.4
Group 67.1 13.5 53.6 53.8
(1) Please refer to APM in note 2.
(2) Comparatives translated at financial year 2024 exchange rates.
Chris Smith
Chief Executive Officer
16 September 2024
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Our Divisions
776.7m
units sold
Performance review
Revenue grew to £532.8 million
(2023:£497.9m), a 7.7% increase on a
constant currency basis
(2)
, generating an
adjusted operating profit of £45.6 million
(2023: £10.5m) and resulting in an adjusted
operating profit margin of 8.6% (2023: 2.1%).
Driven by sales volume growth of 6.6%,
the strong performance was supported
by efficient operational delivery and the
effect of prior year pricing actions agreed
with customers to offset significant input
cost inflation. All major geographies
saw sales volume and revenue growth,
with a standout performance in France,
as consumers continued to switch from
branded to private label products in
response to increased pressure on their
disposable incomes.
Private label revenue increased by 9.4%
on a constant currency basis
(2)
, driven
principally by private label share growth
and new contract wins, and was the result
of a strategic focus on building customer
partnerships. In the strategic focus areas of
laundry, private label sales volumes grew
by 17.9%, driven by contract wins and a
focused approach. Sales volumes of private
label products in the dishwash and cleaners
categories grew broadly in line with the
wider markets.
Contract manufacturing volumes decreased
by 1.8%; however, volumes in the second half
increased by 24.1%, driven by a major new
customer contract, which is expected to
generate further growth in 2025.
Liquids has made good progress with
the Transformation programme, creating
efficiencies and capacity through the
continued rollout of Lean manufacturing
methodology across the division and
using innovation to improve sustainability.
The development of more concentrated
products, together with a move towards
carton packaging, supports the Group’s
commitment to sustainability by reducing
the use of water and plastic in the
manufacturing process.
A focus on operational
delivery has driven market
outperformance in private
label volume growth.
Peter Ingelse
Managing Director Liquids
See more online
Revenue
£532.8m
(2023: £497.9m)
Adjusted operating profit
(1)
£45.6m
(2023: £10.5m)
Adjusted ROCE
(1)
37.8%
(2023: 9.1%)
(1) Please refer to APM in note 2.
(2) Comparatives translated at financial year 2024
exchange rates.
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Our Divisions continued
3.1bn
dishwasher tablets sold
Performance review
On a constant currency basis
(2)
, revenue
increased by 0.7% to £233.6 million (2023:
£234.2m), generating an adjusted operating
profit of £19.4 million (2023: £10.0m) and
resulting in an adjusted operating profit
margin of 8.3% (2023: 4.3%).
While the number of customer units grew
by 1.1%, the volume of individual doses sold
grew by 6.2%, driven by a shift in sales mix
towards larger consumer packs. Volume
growth in doses was seen across all product
categories and in both private label and
contract manufacturing customer segments,
despite certain operational challenges
limiting laundry capsules output. Contract
manufacturing sales volumes increased by
22.4% in the second half, mainly driven by
new product launches, with this positive
momentum expected to continue into2025.
Despite the average sales price per dose
reducing by 5.2% on a constant currency
basis
(2)
, driven by successful efforts to
create more compact and increasingly
sustainable products and certain price
reductions, the division improved
profitability through operating leverage
from higher production volumes, strong
margin management and tight cost controls.
As outlined at the CMD, product leadership
remains at the heart of Unit Dosing’s
strategy. Expertise in designing and
manufacturing compacted products and
sustainable packaging solutions, providing
its customers with affordable, easy-to-use,
fit-for-purpose, sustainable products, led
to multiple new business wins in 2024 and
created a healthy pipeline of new product
launches. Under the ‘FleXellence’ initiative
also discussed at the CMD, the division
made investments to improve the flexibility
of operations and increase capacity for
key product and packaging formats, while
ensuring the right balance between output
increases, cost to produce and the flexibility
required to fully satisfy its customers’ needs.
Unit Dosing delivered a solid
performance in a challenging
year, through its ability to
adapt and its focus on
sustainable innovation for
customers.
Lennard Markestein
Managing Director Unit Dosing
See more online
(1) Please refer to APM in note 2.
(2) Comparatives translated at financial year 2024
exchange rates.
Revenue
£233.6m
(2023: £234.2m)
Adjusted operating profit
(1)
£19.4m
(2023: £10.0m)
Adjusted ROCE
(1)
32.8%
(2023: 16.0%)
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Our Divisions continued
69,574
tonnes produced
Performance review
Revenue grew to £92.8 million
(2023:£85.9m), a 9.2% increase on a
constant currency basis
(2)
, generating an
adjusted operating profit of £6.0 million
(2023:lossof £0.7m) and resulting in an
adjusted operating profit margin of 6.5%
(2023: operating loss margin of0.8%).
This strong turnaround performance
resulted from a combination of good
operational delivery, business wins
outpacing contract losses, and a strong
recovery in demand from industrial
and institutional customers. More
broadly, underlying cost-of-living
pressures supported the continued
trend of consumers switching to private
label laundry powder from branded
products andother higher-cost laundry
productformats.
The division’s return to profitability was
also underpinned by the proactive cost
mitigation actions initiated in 2023 and,
in part, by the easing of raw material cost
inflation.
In the overall powders market, whilst
volumes increased slightly by 0.9%, pricing
increased in value by 5.5%, mainly due to
branders increasing prices, widening the
price gap between private label and brands.
The Powders division gained market share
versus higher-cost branded competition.
Across the five major European markets,
private label volume share in laundry rose
to29.8% (2023: 29.1%).
In line with the strategic priorities initially
outlined in 2021, Powders continued
to deliver award-winning products, led
by research and development product
compaction and sustainability actions.
Thisis a key component of a wider
programme to better tailor products to
meet the needs of European consumers,
with the aim of being the ‘go-to’ powder
specialist. The focus on operational
excellence resulted in efficiency
improvements and improved customer
service levels. Powders secured a number
of new customer wins, gaining new contract
manufacturing customers and expanding
itsprivate label presence into new
geographic regions.
As outlined at the CMD, laundry powder
remains a core part of the Group’s
product offering in the strategically
important laundry category. Powders has
developed a winning formula of being
an efficient powder specialist, meeting
its customers’ needs by offering a wide
portfolio of products, ranging from
low-cost everyday value to premium
award-winning products. Powders will
continue on its journey to become the ‘go
to’ powder specialist, by being the low-cost
leader, driving efficiencies by improving
asset utilisation, continuing to build on
technical and R&D expertise and targeting
growth opportunities in new geographies
andchannels.
Powders has built on a solid
end to 2023 to deliver a
strong turnaround
performance and return to
profitability.
Marielle Claudon
Managing Director Powders
See more online
(1) Please refer to APM in note 2.
(2) Comparatives translated at financial year 2024
exchange rates.
Revenue
£92.8m
(2023: £85.9m)
Adjusted operating profit/(loss)
(1)
£6.0m
(2023: £(0.7)m)
Adjusted ROCE
(1)
21.5%
(2023: (2.4)%)
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Our Divisions continued
73.7m
units produced
Performance review
Revenue grew to £50.9 million
(2023:£46.2m), an 11.6% increase on
aconstant currency basis
(2)
, generating
an adjusted operating profit of
£2.1million (2023: £0.3m) and resulting
in an adjusted operating profit margin of
4.1%(2023:0.6%).
Delivering on its strategy to expand
horizons beyond France, several contract
wins in the year delivered good growth
in Germany and Iberia. Private label
and personal care achieved standout
performances, with revenue increasing
by 16.0% and 17.5% respectively, on a
constant currency basis
(2)
. A clear focus
on innovation, particularly leveraging
sustainability credentials, allowed the
introduction of more eco-friendly packaging
and greener formulations using natural
ingredients. In addition to making its
products more sustainable, new product
developments enabled the realisation of
cost efficiencies.
As outlined at the CMD, Aerosols has
developed strong relationships with
customers, thanks to its proven track record
of being fast, agile and reliable. From its
established position as a leader in personal
care and household aerosol products,
Aerosols has a strong base from which to
expand into new territories, driving further
growth supported by significant capex
investments to expand its manufacturing
capacity and capabilities.
A strong performance driven
by new contract wins and
innovative development to
meet customer needs.
Marc Marot
Business Unit Director Aerosols
See more online
Revenue
£50.9m
(2023: £46.2m)
Adjusted operating profit
(1)
£2.1m
(2023: £0.3m)
Adjusted ROCE
(1)
17.7%
(2023: 2.7%)
(1) Please refer to APM in note 2.
(2) Comparatives translated at financial year 2024
exchange rates.
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Our Divisions continued
20.5m
litres produced
Performance review
Revenue grew to £24.7 million (2023:
£24.8m), an 8.3% increase on a constant
currency basis
(2)
, generating an adjusted
operating profit of £1.4 million (2023: £1.1m),
and resulting in an adjusted operating profit
margin of 5.7% (2023: 4.4%).
During the year, sales of personal care
products grew strongly, particularly as the
Malaysia facility returned to normal supply
levels to customers in Southeast Asia
and Australia after the extended Covid-19
slowdown period. Second half revenue
growth of 13.1% on a constant currency
basis
(2)
, was significantly up versus 4.0%
growth in the first half, as the division
secured new personal care contracts,
offsetting the partial loss of business with
a major customer at the end of the prior
financial year. Production output at the
Vietnam facility increased significantly
in the fourth quarter as a result of a new
contract manufacturing agreement.
As outlined at the CMD, with its
well-invested and flexible manufacturing
capacity, the division is well positioned
to grow in the Asia-Pacific region that
boasts some of the world’s fastest
growing economies and a growing
middleclass that is increasingly demanding
environmentally-friendly health and
wellness products. The division will
leverage its manufacturing capacity
and product development know-how to
drive growth opportunities in household
cleaning products, developing new
contract manufacturing relationships and
extending the regional reach for its private
label products. More concretely, while the
personal care products should continue
their strong momentum into 2025, the
Malaysia site will also begin to supply new
household products to Australia in the
firsthalf.
The division has improved
profitability on increased
demand for private label and
personal care products.
Teong Dee Ong
Business Unit Director Asia Pacific
See more online
Revenue
£24.7m
(2023: £24.8m)
Adjusted operating profit
(1)
£1.4m
(2023: £1.1m)
Adjusted ROCE
(1)
15.9%
(2023: 11.6%)
(1) Please refer to APM in note 2.
(2) Comparatives translated at financial year 2024
exchange rates.
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Group operating results
Operating profit of £64.3 million was
significantly higher than the prior year
(2023: £10.3m). Adjusted operating profit
(1)
of £67.1 million also improved significantly
(2023: £13.5m), with the adjusted operating
profit margin
(1)
increasing from 1.5% to 7.2%.
The Group’s improved profitability continues
to be underpinned by a focus on margin
management and volume growth, realised
through a combination of new business wins
and higher demand on existing private label
contracts.
Adjusted EBITDA
(1)
of £87.1 million (2023:
£34.1m) reflected the strong trading and
operational performance.
Exceptional items
Exceptional items of £4.6 million were
recorded during the year (2023: £13.0m).
The charge comprised the following:
• £0.8 million costs relating to the
re-evaluation of the environmental
remediation provision (2023: £0.8m); and
• £3.8 million charged to finance costs
(2023: £12.2m). The charge primarily
related to the termination of the
upside sharing fee. As announced on
25 October 2023, the Group agreed to
make a one-off payment of £5.0 million
to its lender group in respect of the
upside sharing fee. As £1.5 million had
already been recognised at 30 June
2023, a further £3.5 million cost was
recognised in the year. Costs of £12.2
million incurred in the prior year related
to the independent business review and
amendment of theGroup’s revolving
credit facility (RCF).
Finance costs
The decrease in total finance costs from
£25.4 million to £17.8 million was mainly
driven by the reduction in exceptional
finance costs. At £14.0 million, adjusted
finance costs
(2)
were £0.8 million higher
than the prior year (2023: £13.2m), driven
by high market interest rates. Excluding
pension interest costs and the impact of
foreign exchange movements, underlying
adjusted finance costs of £12.1 million (2023:
£12.9m) decreased by £0.8 million despite
high market interest rates, due to the
reduction in the cost of borrowing resulting
from lower levels of net debt.
Taxation
Reported profit before taxation was £46.5
million (2023: loss of £15.1m). Adjusted
profit before taxation
(1)
was £53.1 million
(2023: £0.3m). Thetax charge on adjusted
profit before tax
(1)
for the year is £14.8
million (2023: £0.3m) and the effective tax
rate is 28% (2023:100%).
The statutory effective tax rate for the year
is 28% (2023: 24%).
The Group operates across a number of
jurisdictions and tax risk can arise in relation
to the pricing of cross-border transactions.
Associated provisions have reduced in the
year mainly due to statute of limitation
expiries.
Earnings/(loss) per share
On an adjusted basis, diluted earnings per
share
(1)
was 21.7 pence (2023: loss of 0.0p).
Total adjusted basic earnings per share
(1)
increased to22.2 pence (2023: loss of 0.0p),
with basic earnings per share at 19.3pence
(2023: loss of 6.6p).
Payments to shareholders
Under the terms of the amended RCF
announced on 29 September 2022,
the Company may not, except with the
consent of its lender group, declare, make
or pay any dividend or distribution to its
shareholders prior to an ‘exit event’, being
a change of control, refinancing of the RCF
in full, prepayment and cancellation of the
RCF in full, or upon the termination date of
the RCF, being May 2026. Hence, the Board
is not recommending a final dividend for the
financial year ended 30 June 2024.
Excellent financial results,
driven by the continuing
commitment of our
McBride colleagues,
strong demand for our
great value private label
products and a laser-like
focus on delivering
shareholder value.
Mark Strickland
Chief Financial Officer
(1) Please refer to APMs in note 2.
(2) Please refer to note 8 for reconciliation to total finance costs.
CFO’s Report
18
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Cash flow and balance sheet
2024
£m
2023
£m
Adjusted EBITDA
(1)
87.1 34.1
Working capital excluding provisions and pensions (4.6) 7.1
Share-based payments 1.6 0.5
Loss on disposal of fixed assets 1.4 0.3
Impairment of fixed assets 0.2 —
Pension deficit reduction contributions (4.0) (4.0)
Free cash flow
(1)
81.7 38.0
Exceptional items (1.0) (1.4)
Interest on borrowings and lease liabilities less interest
receivable (10.9) (11.4)
Refinancing costs paid (5.5) (12.3)
Tax paid (5.1) (1.8)
Net cash generated from operating activities 59.2 11.1
Net capital expenditure
(2)
(19.6) (12.0)
Repayment of lease liabilities (4.5) (4.3)
Debt financing activities (25.9) 2.6
Settlement of derivatives 1.1 0.4
Free cash flow to equity
(3)
10.3 (2.2)
Purchase of own shares (2.8) —
Net increase/(decrease) in cash and cash equivalents 7. 5 (2.2)
Free cash flow
(1)
was £81.7 million (2023:
£38.0m) in the year to 30 June 2024, mostly
attributable to the strong performance in
adjusted EBITDA
(1)
. Working capital outflows
of £4.6 million (2023: £7.1m inflow) reflected
an increase in trade receivables, driven by
the growth in revenue.
Refinancing costs paid of £5.5 million (2023:
£12.3m) mainly reflected the payment of
£5.0 million to McBride’s lender group
to terminate the upside sharing fee. The
increase in tax paid to £5.1 million (2023:
£1.8m) reflects the return to taxable profit
across the tax jurisdictions in which the
Group operates.
During the year, net capital expenditure
(2)
was £19.6 million (2023: £12.0m) in cash
terms. The £7.6 million increase reflects
a return to more normal levels of capital
expenditure after a period of careful
management of cash flows to mitigate
increases in net debt. The Group continues
to prioritise investment to support divisional
growth objectives and the SAP S/4HANA
programme.
Strong levels of cash generation resulted in
a net repayment of £25.9 million external
debt, significantly reducing the amount
drawn on the Group’s RCF.
The Group’s net assets increased to £63.4
million (2023: £37.1m). Gearing
(4)
decreased
to 66.0% (30 June 2023: 78.4%) as net debt
levels decreased by £35.0 million. Adjusted
ROCE
(1)
of 33.5% was significantly higher
than the prior year (2023: 6.4%) driven by
the increased operating profit.
Bank facilities and net debt
(1)
Net debt at 30 June 2024 was £35.0 million
lower than the prior year end at £131.5
million (2023: £166.5m).
Throughout the year, the Group
had a €175million multi-currency,
sustainability-linked RCF. This facility
ensures the Group continues to have
significant levels of liquidity headroom.
At 30 June 2024, liquidity
(1)
was
£98.3million (2023: £59.3m). Liquidity
throughout the year remained comfortably
above the RCF’s minimum liquidity
covenant of £15 million.
At 30 June 2024, the net debt cover
ratio
(1)
, as defined under the RCF funding
arrangements, was 0.8x (2023: 2.9x) and
the interest cover
(1)
was 6.8x (2023: 2.7x).
The amount undrawn on the facility was
£82.9 million (2023: £40.0m). Under the
RCF agreement, net debt cover and interest
cover covenants will be tested quarterly
with effect from 30 September 2024.
(1) Please refer to APMs in note 2.
(2) Net capital expenditure is capital expenditure less proceeds from sale of fixed assets.
(3) Free cash flow to equity excludes cash flows relating to transactions with shareholders.
(4) Gearing represents net debt divided by the average of opening and closing capital.
CFO’s Report continued
19
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Bank facilities and net debt
continued
The RCF, which is aligned with the Loan
Market Association’s ‘Sustainability Linked
Loan Principles’, incorporates three
sustainability performance targets which
are central to McBride’s commitment
to maintaining a responsible business
and contributing actively to a more
sustainablefuture:
1. Renewable energy: McBride strives to
reduce its environmental impact by
increasing the percentage of energy
fromrenewable sources from 5.9% in
2020 to 70.0% in 2026. During the year,
54.9% (2023: 42.1%) of the Group’s
energy came from renewable sources,
surpassing the loan agreement target
of50.0% by 30June 2024.
2. Recycled content: Plastics are a
significant element in many of McBride’s
final products. During the year,
98.8% (2023: 98.2%) of polyethylene
terephthalate (PET) plastic packaging
sourced in manufacturing the Group’s
products had post-consumer recycled
(PCR) content, exceeding the loan
agreement target of 84.0%. This also
significantly exceeds the Company’s own
target of 94.0% PCR by 2026.
3. Responsible sourcing: McBride aims to
source all paper and card components
responsibly via FSC®-approved suppliers,
with the percentage of virgin carton
sourced from FSC®-approved suppliers
increasing from 50.0% in 2020 to
100.0% in 2026. By 30June 2024, the
percentage of FSC®-certified skillets
sourced was 78.9% (2023: 55.6%),
slightly below the loan agreement target
of 80.0% by 30June 2024. The limitation
in the use of FSC®-sourced board is due
to product mix and transition impacts.
McBride continues to focus on improving
our recyclability via product design and
working closely with customers.
Successful achievement of all three annual
targets results in a reduction of 0.05% of
the margin of the facility.
At 30 June 2024, the Group had a number
of facilities whereby it could borrow against
certain of its trade receivables. In the
UK, the Group had a £20 million facility,
committed until May 2026. In Germany
and Denmark, the Group had a €45 million
facility, committed until May 2026. In
France, Belgium and Spain, the Group had
an unlimited facility, committed until May
2026. The Group can borrow from the
provider of the relevant facility up to the
lower of the facility limit and the value of
the qualifying receivables.
Pensions
In the UK, the Group operates a defined
benefit pension scheme, which is closed
tonew members and to future accrual.
A cash flow driven investment (CDI)
strategy was implemented during the first
half of the financial year to 30 June 2020.
Using credit/bond investments, the CDI
strategy was intended to deliver a stable,
more certain, expected return and reduce
volatility. The strategy previously targeted a
c.100% hedge of interest rates and inflation.
This strategy worked well until the UK
government bond crisis in 2022. Following
that crisis, and the resultant changes in
liability-driven investment managers’
collateral requirements, the Trustee
amended the strategy in October 2022 and
as an interim step moved to an unlevered
government bond-based hedge with c.40%
of interest rate and inflation hedging. The
investment strategy was then reviewed
and hedging was increased to c.65% of
interest rates and inflation during October
to December 2023 to broadly hedge the
funding level of the Fund and strike a
balance between risk and return objectives
and liquidity needs of the Fund.
At 30 June 2024, the Group recognised
a deficit in the scheme of £27.5 million
(30June 2023: £24.7m). The increase in
deficit is due to a reduction in corporate
bond yields over the year, leading to a
decrease in the discount rate used to value
the Fund’s liabilities, which has led to an
increase in the liabilities and a loss on
assetsin excess of interest income.
Following the triennial valuation at
31March2021, McBride and the Trustee
agreed a new deficit reduction plan
based on the scheme funding deficit
of £48.4 million. The current level of
deficit contributions of £4.0 million per
annum is payable until 31 March 2028.
McBride separately agreed that, from
1October 2024, conditional profit-related
contributions of £1.7 million per annum will
be paid over the period to 31March2028.
If adjusted operating profit exceeds
£35.0 million, additional annual deficit
contributions of £1.7 million will be
due over the following year. If adjusted
operating profit is below £30.0 million
then no profit-related contributions will
be due the following year. If reported
adjusted operating profit is between £30.0
million and £35.0 million, a proportion of
the £1.7million contribution will be due
over the following year, with incremental
increases of £0.34 million of additional
contributions for each whole £1.0 million
of adjusted operating profit in excess of
£30.0 million. As adjusted operating profit
for the twelve months ended 31 March 2024
exceeded £35.0 million, additional deficit
contributions of £0.14 million will be payable
each month from 1 October 2024, with total
additional payments for the year ended
30 June 2025 expected to be £1.3 million.
McBride also agreed to make additional
contributions such that the total deficit
contributions in any year match the value
ofany dividendpaid.
The funding arrangements and recovery
plan will next be reviewed by McBride and
the Trustee as part of the 31March 2024
valuation, which has a statutory deadline
forsigning of 30 June 2025.
The Directors acknowledge the appeal
judgement dated 25 July 2024 in the case
of NTL vs Virgin Media and will be reviewing
the implications for the Group in the
comingmonths.
The Group has other post-employment
benefit obligations outside the UK that
amounted to £1.9 million (30 June 2023:
£1.9m).
Mark Strickland
Chief Financial Officer
CFO’s Report continued
20
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Revenue
(£m)
2024
2023
2022
2021
2020
706.2
682.3
678.3
889.0
Why we measure: A key performance indicator
of the relevance of our portfolio to our
customers and consumers.
How we have performed: Group revenue
increased by £45.8 million (5.2%), driven by
volume increases.
How it links to our strategy

Transformation benefits
(£m)
2024
Why we measure: Net profit benefit achieved
from the Transformation programmes will
play a key role in delivering the long-term,
sustainable profit growth of the Group.
How we have performed: In 2024, the net
cost of £(1.6) millionreflects the initial
operating expenditure investment required
in commencing the seven Transformation
programmes.
How it links to our strategy
 
Adjusted EBITDA
(1)
margin
(%)
2024
2023
2022
2021
2020
Why we measure: We measure adjusted
EBITDA
(1)
margin to get a good view of the
underlying profitability of the Group.
How we have performed: The Group’s
improved profitability continues to be
underpinned by volume growth, realised
through a combination of business wins and
strong demand increases on existing private
label contracts.
How it links to our strategy
 
Free cash flow
(1)
(£m)
2024
2023
2022
2021
2020
Why we measure: Free cash flow
(1)
is an
important indicator of our overall operational
performance as it reflects the cash we generate
from operations.
How we have performed: Free cash flow
(1)
increased by £43.7 million, driven by
increased adjusted EBITDA (£53.0 million)
and offset slightly by working capital outflows
(£11.7million).
How it links to our strategy
 
Adjusted ROCE
(1)
(%)
2024
2023
2022
2021
2020
Why we measure: Adjusted ROCE
(1)
serves as
an indicator of how efficiently we generate
returns from the capital invested in the
business.
How we have performed: Adjusted ROCE
(1)
has increased from 6.4% to 33.5%, driven by
substantially higher profit achieved in the
current year.
How it links to our strategy
 
Lost time incident frequency rate
(#)
2024
2023
2022
2021
2020
Why we measure: Ensuring that all of our
colleagues return home safe and healthy at
the end of every workingday is the primary
objective of the Group.
How we have performed: Our lost time
frequency rate decreased in 2024 in line with
key objectives focused on Group standards,
risk assessment, zero loss journey maps and
leading indicators.
How it links to our strategy
 
Customer service level (CSL)
(%)
2024
2023
2022
2021
2020
Why we measure: Consistently delivering
a high CSL underpins our customer-focus
approach.
How we have performed: Our CSLs increased
in 2024, following continued focus in this area.
Whilst improving, CSLs are not yet back to
historical levels as changes in customer and
consumer behaviours have resulted in unstable
demand signals. We continue to work closely
with our customers to improve CSLs further.
How it links to our strategy

Key:
Market standing
Operational excellence
Sustainability
Talent
(1) Please refer to APM in note 2.
81.7
38.0
(22.7)
33.1
64.9
9.3
3.8
(0.5)
6.7
7.0
33.5
6.4
(11.4)
11.5
12.8
0.75
0.88
0.48
0.80
0.67
89.9
87.4
85.4
90.8
90.8
934.8 (1.6)
Our Key Performance Indicators
21
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Section 172(1) statement
How we engage and foster
strong relationships with some
of our key stakeholders
The Directors are fully aware of their
responsibilities to promote the success
of the Company in accordance with
section 172 of the Companies Act 2006
(‘the2006 Act’). The Board considers it
has acted in good faith and made decisions
which promote the long-term success
of the Company for the benefit of its
shareholders and its people. In doing so,
it considered the interests of stakeholders
impacted by the business as well as its legal
duties. It acknowledges that as it works
towards securing the Group’s success
and sustainability and delivering on our
strategy it needs to build and maintain
successful relationships with a wide range
of stakeholders within an interconnected
society. The Board has identified five key
stakeholder groups and recognises that it
must ensure the perspectives, insights and
opinions of stakeholders are understood
and considered when key decisions are
being made. Equally, not all decisions
will result in a positive outcome for all
stakeholders; however, the Board recognises
that its decisions should nonetheless be
justifiable in themselves.
Factors taken into account in the Board’s
decision making included:
• likely consequences of any decisions in
the long term;
• the interests and wellbeing of our people,
including health and safety risks;
• the need to foster the Company’s
business relationships with suppliers,
customers and others;
• the impact of the Company’s operations
on the community and environment;
• the desirability of the Company
maintaining a reputation for high
standards of business conduct;
• the compliance and financial risks to the
Company and our stakeholders; and
• the need to act fairly between
shareholders of the Company.
Examples of how the Board had oversight
of stakeholder matters and had regard for
these matters and the potential impact on
stakeholders when making decisions, are set
out below.
Our Stakeholders
Workforce
Why significant
We remain dedicated to fostering a supportive
and dynamic work environment that empowers
our 3,695 colleagues
(1)
across 14 countries to
achieve their full potential.
How we engage
The Executive Committee believes we can
ultimately differentiate our business through our
colleagues, so it is important to us that we create
a culture where our people can be themselves
and fulfil their potential. By focusing on inclusion
and diversity, we can make better business
decisions, informed by diverse perspectives.
Our culture comes to life through our three core
values, which remain unchanged. These values
underpin our purpose and have become a vital
part of our culture.
We are committed to providing an open and
inclusive culture, where colleagues have the
opportunity to progress and where they are
supported in their development.
2024 highlights
• Employee Voice surveys, launch of our
engagement survey in December 2023 and
our health and wellbeing survey in April
2024, both of which have provided valuable
information on how our colleagues feel whilst
identifying areas that need addressing.
• The launch of McBride Gives, our corporate
volunteering scheme, supporting local
charities that align with our purpose in
Poland, Denmark and France.
• Progressed with the Diversity, Equity and
Inclusion (DEI) awareness programme roll
outfor senior leaders as the first step in
ourDEI journey.
• Continued to provide career development
options, empowering our colleagues to
fulfil their potential and their professional
ambitions.
• Regular communications and town halls
fostering transparency, engagement and a
sense of belonging.
• Board member engagement with our
European Works Council (EWC) throughout
the year to ensure that the Board is well
informed about perspectives, concerns and
the ideas of the workforce.
Outcomes and impact
of key decisions
Our continued commitment to creating an
attractive, diverse, equitable and inclusive
environment, where our colleagues feel they
belong and that their safety and wellbeing
matters, is fundamental to the delivery of our
strategic priorities.
(1) Includes employees, third-party contractors, consultants and agency workers. Figure given as at 30 June 2024.
22
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Section 172(1) statement continued
Suppliers
Why significant
Raw materials are responsible for a large
proportion of our product costs. Price increases,
delays or interruption in the supply of raw
materials could have a significant detrimental
effect on both our operations and financial
position.
How we engage
Our Supplier Code of Conduct, which is available
on our website, sets out the standards of
behaviour we expect from all of our suppliers.
Westrive to establish mutually beneficial
relationships across our supplier base,
encouraging them to match our high standards.
Our centralised Group Purchasing function is
committed to sourcing the Group’s key materials
and maintaining constructive and collaborative
two-way communication across our supplier base.
A due diligence exercise is carried out on new
suppliers prior to engagement.
2024 highlights
Despite supply/demand balance improvements
throughout 2024, pockets of tightness still
remained as output restrictions continued to
be applied by some of the large global players.
Whilst the rate of inflation has started to slow,
it is clear that prices remain at high levels. As a
strategic Group function, the Group Purchasing
team has leveraged its supplier relationships, and
the expert market knowledge that the team has,
to ensure supply continuity and reliability.
Outcomes and impact
of key decisions
We continue to benefit from a strategic,
centralised Group Purchasing function, with
supply reliability a key achievement. The Group
also reaps the rewards of the market-leading
market knowledge and insights that the Group
Purchasing team are able to provide to the
business regarding the complex commodities
markets that our industry is relianton.
Customers
Why significant
Good relationships with our customers are the
fundamental bedrock of our business. Under
our divisional structure, a core ambition is to
provide focused and specialist insight to help our
customers with the optimal portfolio proposition
that best suits their business.
How we engage
We aim to deliver industry-leading value, service
and quality for our customers. Our specialist
commercial and technical teams, supported by
central teams such as logistics and purchasing,
look to drive long-lasting, trusted relationships
with our customers, ultimately providing a
compelling range of value products. Reacting
quickly and effectively to changing requirements
is increasingly a core competence in our customer
proposition.
2024 highlights
The strong momentum in the private label market
at the end of the prior financial year carried
on into the start of the year under review as
consumers continued to move towards private
label goods as a result of the strong inflation in
2022 and 2023. The private label market grew
substantially in a short period of time.
In this period, we focused on supporting our
customers in the realisation of their private
label growth, by scaling up, creating capacity,
reinforcing our logistics operations and upskilling
our teams to better serve them. This required
strong co-operation with our customers in the
forecasting, supply chain management and
logistics processes.
In the second half of the year under review,
our customers were looking for support to
strengthen their private label offerings and
grow their sales volumes and market shares.
With our comprehensive services, we were able
to deliver added value solutions to customers,
strengthening our relationships with them.
Outcomes and impact
of key decisions
Our ability to react quickly and effectively to
evolving customer needs, to work together with
our customers and to further improve our offering
to our customers has enabled us to better
servethem.
Our Stakeholders continued
23
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Section 172(1) statement continued
Communities
Why significant
We acknowledge our responsibility to actively
engage with and support the local communities
where we live and work, extending beyond merely
providing employment.
How we engage
McBride proactively supports and encourages
colleagues from all locations to unite in
supporting local initiatives, organising product
donations, raising funds for chosen charities and
volunteering for local organisations. Examples
are provided in the Sustainability report under
‘Community and social vitality’ on pages 33 to 34.
2024 highlights
Each of our McBride sites continues to support
their local community through specific efforts
such as:
• the launch this year of the ‘McBride Gives’
volunteering scheme, encouraging colleagues
to donate their time to local charities aligned
to our purpose;
• donating products to a range of local
organisations including schools, hospitals,
aid organisations, churches, shelters and
foundations in the countries in which we
operate;
• supporting the children of McBride
colleagues with educational grants;
• continuing to support In Kind Direct with
product donations; and
• providing local employment opportunities.
More information on this can be found in the
Sustainability report under ‘Community and
social vitality’ on pages 33 to 34, which highlights
some of the charitable activities over the last
financialyear.
Outcomes and impact
of key decisions
Helping and supporting local communities and
improving the living conditions in the areas where
we operate is a high priority of our Group.
Shareholders
Why significant
A key objective of the Board is to create value for
shareholders and deliver long-term, sustainable
growth. By engaging with our shareholders, we
ensure confidence and continued support from
shareholders and alignment of interests.
How we engage
We place considerable importance on maintaining
effective and balanced dialogue with all
shareholders to discuss the Company’s strategy
and other associated objectives. The Chairman
and Executive Directors proactively engage
with both existing and potential shareholders.
Inaddition, the Executive Directors deliver formal
presentations of full-year and half-year results and
attend meetings with analysts, brokers and fund
managers to promote a better understanding of
our business and our strategic plans.
The Board is kept informed of investors’ views
through the distribution and regular discussion
of analysts’ and brokers’ briefings and through
summaries of investor opinion feedback.
All Directors are available at the Annual General
Meeting (AGM), either in person or virtually,
toanswer questions.
2024 highlights
During the year:
• We undertook our regular programme
of engagement with shareholders, which
included the financial reporting cycle
comprising full-year and half-year results,
trading statements and the AGM.
• A Capital Markets Day (CMD) was held to
enable us to present to shareholders our
strategy and explain how we intend to
deliver shareholder value. A video of the
CMD is available on the McBride website.
Subsequent to the CMD, follow-up calls
were held with our key shareholders as part
of the Company’s standard engagement
programme.
• Following engagement with shareholders,
theBoard put forward resolutions at the
2023 AGM in respect of Directors’ authority
to allot shares in McBride with a reduced
authority to allot on both a non-pre-emptive
and pre-emptive basis of 5%.
• The Board received updates from the
Company’s brokers.
• Shareholder feedback was provided to the
Board by the Chairman, Chief Executive
Officer or Chief Financial Officer following all
meetings or conversations with shareholders.
Outcomes and impact
of key decisions
Shareholder views consistently inform our
strategic activities and the views of the Group’s
major shareholders continue to inform the actions
of the Board as it implements its Compass
strategy and Transformation programme.
Thesewill play a key role in supporting the
long-term, sustainable growth that will enable
the Board to deliver value for all of McBride’s
stakeholders.
Our Stakeholders continued
0
30
60
90
120
150
Share price (pence)
Jun
2023
Aug
2023
Oct
2023
Dec
2023
Feb
2024
Apr
2024
Jun
2024
24
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Sustainability
Our 2025 product sustainability
targets were set in 2020 from a
baseline of 2019 and have been
monitored and reported on for
thepast four years. The targets
areasfollows:
Operations
• 15% improvement in
eco-efficiency (measured in
output volume per gigajoule
ofenergy).
• Procure a minimum of 30% of
energy used in our operations
from renewable sources.
• Zero waste to landfill.
Product and design
• All paper and board sourced will
be FSC® compliant.
• All our packaging will be 100%
fully recyclable, compostable or
reusable.
• On average our plastic
packaging will contain at least
50% recycled content.
• We will exit all multi-layered
flexible packaging.
• We will remove all
REACH-defined microplastics
from our formulations.
We will continue to report on these
product sustainability targets until
the end of 2025. After this date,
we will update our targets to align
with our science-based target
commitment. In December 2023,
we committed to science-based
targets for climate action via
the Science Based Target
initiative (SBTi) for Scope 1, 2
and 3emissions. Our plan was
submitted in May 2024 and we
expect this to be reviewed by the
SBTi in late2024.
Introduction
At McBride, we strive to embed
long-term environmental, social and
governance sustainability principles into
every facet of our divisional and overall
business strategies. This report covers
these three aspects of sustainability.
Our environmental sustainability approach
is grounded in a thorough analysis of the
most relevant and significant sustainability
issues. We acknowledge that taking
actions to address climate-related risks is
critical to our ongoing market relevance
and viability.
Recognising their strategic importance,
our sustainability priorities are actively
managed by a cross-functional
Sustainability committee, overseen
directly by the CEO, with regular
reporting updates provided to the
Board. In order to further emphasise
this commitment, we appointed a Group
Head of Sustainability during the year.
This individual will play a crucial role in
driving the delivery of our science-based
targets for climate action, working in
close collaboration with our divisions,
customers and supply chain partners.
Our plans are aligned with the
Sustainable Development Goals
adopted by all United Nations
Member States in 2015 as part of
the 2030 Agenda for Sustainable
Development.
Our sustainability initiatives are:
Operating
sustainably
Fit for
the future
products
Responsible
sourcing
and supplier
engagement
Green
energy
54.9%
PCR weight of our
PET packaging
65.5%
Year-on-year
reduction in
wasteto landfill
23.5%
CO
2
e saving
from operations
(tonnes)
1,989
Pages 27 to 28 Page 29 Page 30
Our foundations
Our people and communities
See more on page 31
Governance
See more on page 35
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McBride plc Annual Report and Accounts 2024
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Sustainability continued
Progress on carbon emissions
In 2021, we measured our corporate
carbon footprint with an external partner,
ClimatePartner® to gain an understanding
of our Scope 1, 2 and 3 emissions and
have continued to measure this annually,
following the GHG protocol. The
measurement includes all sites except
Vietnam, which is excluded due to low
materiality. The hotspots that were
identified in 2021, being Scope 1 and 2
emissions from our energy consumption
and Scope 3 emissions from our purchased
goods, are still relevant today. As a result
of this carbon assessment, we can see that
the highest percentage of emissions are
generated by the chemicals and packaging
materials that we buy to manufacture our
products.
The table below reports our CO
2
e emissions
data for the current year, prior year and
the 2021 baseline. In order to remain in line
with the GHG protocol, data for the 2021
baseline and 2023 comparative have been
restated to reflect the most recent updates
in emission factors and changes in SBTi
methodology used in calculating corporate
carbon footprints.
Following the latest calculation of our
carbon footprint for 2024, our total
emissions are 1,096,835 tonnes of CO
2
e.
This is an increase in emissions of 5.5%
compared to the latest calculated 2021
baseline for Scope 1, 2 and 3 emissions,
mostly driven by increased production
volumes as the Group grows its market
share. The intensity ratio of CO
2
e tonnes
per product sold in tonnes is marginally
favourable compared to the 2021 baseline.
The Group is considering the best measure
to demonstrate carbon intensity going
forward. As more products are compacted,
the number of consumer ‘uses’ per tonne of
production grows, possibly distorting this
progress measure.
The increase in our footprint versus the 2021
baseline is driven by a mix of changes in
Scope 1, 2 and 3. Scope 1 emissions (mainly
natural gas) have increased by 10.3% versus
2021 to support the increased production
volumes in 2024. We have reduced Scope
2 emissions from electricity as a result of
an increase in energy efficiency during the
year and an increase in the procurement
of green electricity. Scope 3 emissions
have increased by 6.7% as a direct result
of an increase in production volumes
relative to our 2021 baseline. Thisincrease
is predominantly driven by our purchased
goods, with a 9.0% increase in emissions
coming from our chemical portfolio and
4.6% increase from packaging.
Emissions 2024
(tonnes CO
2
e)
Emissions 2023
(tonnes CO
2
e)
(1)
Emissions 2021
baseline
(tonnes CO
2
e)
(1)
% emissions
change 2024
from 2023
% emissions
change 2024
from 2021
baseline
Total
(2)
1,096,835 1,033,690 1,039,929 6.1% 5.5%
Scope 1 9,132 8,251 8,282 10.7% 10.3%
Scope 2 7,630 10,841 19,190 (29.6)% (60.2)%
Scope 3
(2)
1,080,073 1,014,598 1,012,457 6.5% 6.7%
Output: net weight of products sold (tonnes) 912,323 880,628 859,449 3.6% 6.2%
Intensity: tCO
2
e per tonne net weight of sold product
(excluding use phase)
1.20 1.17 1.21 14.8% (0.6)%
In order to meet our new science-based
target commitment, we will prioritise
operational energy efficiency, enhance our
responsible sourcing practices and engage
proactively with our supply chain and
customers. Our product development teams
will continue to focus on reducing carbon
emissions through the innovation of new
household cleaning products.
(1) Scope 3 and total emissions data has been restated to reflect the latest changes in SBTi calculation methodology and most recent updates in emission factors.
(2) Supply chain emissions only. McBride is exempt from calculating emissions associated with the use of the product.
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McBride plc Annual Report and Accounts 2024
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Sustainability continued
Operating sustainably
Total energy consumption, efficiency
and emissions
Our total energy consumption (kWh)
acrossall our operations has increased
by 4.6% in the year, driven by increased
production volumes. As at 30 June 2024,
energy efficiency increased to 6.96kgs
produced per kWh, up 9.6% versus
2019. Our target of achieving a 15.0%
improvement in energy efficiency by 2025,
compared to the 2019 baseline, remains a
key area of focus.
More sites are adapting to use energy
monitoring software, with sensors to gain
further granularity on where electricity is
being consumed across the site. Energy
champions have been appointed to each
production site to share best practice across
our divisions.
Our investment in green electricity has
continued in 2024. As a result, energy
from green sources as a proportion of total
energy has increased from 42.1% in 2023 to
54.9% in 2024, significantly exceeding our
2025 target of 30.0%. As part of our SBTi
submission, this target will be increased and
will be published once confirmed by SBTi.
Increasing our consumption of green
electricity and improving our overall
energyefficiency has positively impacted
our GHG emissions, resulting in a reduction
of 1,989 tonnes of CO
2
e. We produced
considerably more product per tonne of
CO
2
e emissions, increasing from 48,216
tonnes of production per tonne of CO
2
e
in2023 to 59,537 in 2024.
0
30,000,000
60,000,000
90,000,000
120,000,000
150,000,000
2019 2021 20222020
Oil
Gas Electricity (non-green) Electricity (green)
2023
2024
kWh
7.00
6.20
6.10
6.30
6.40
6.60
6.50
6.80
6.70
6.90
kg production per kWh
Efficiency
6.35
6.55
6.48
6.96
6.47
133,528,505
126,484,015
145,424,095
136,936,256
130,335,790
136,306,239
6.62
Total energy consumption
(1)
0
10,000
2019
20,000
30,000
40,000
50,000
38,347
48,216
Scope 1
Scope 2 COe efficiency
0
10,000
20,000
30,000
40,000
50,000
60,00060,000
kg production per tonne CO
2
e
CO
2
e tonnes
8,589
30,781
2022
7,141
14,199
2023
7,415
10,510
2024
8,112
7,824
2021
7,642
19,170
2020
7,615
22,400
59,537
29,879
23,470
32,287
Net Scope 1 and 2 CO
2
e emissions (tonnes CO
2
e)
(2)
for energy consumption
(1) Total energy consumption for 2024 of 136.3 million kWh relates to 17.1 million kWh for the UK (12.5%)
and119.2 million kWh for the Rest of the World (87.5%).
(2) Total emissions for energy in 2024 of 15,936 tonnes relates to 588 tonnes for the UK (3.7%) and
15,348tonnes for the Rest of the World (96.3%).
27
McBride plc Annual Report and Accounts 2024
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Sustainability continued
Operating sustainably continued
Total energy mix
McBride purchases a mix of gas and
oil. Theconsumption of this is relatively
stable year on year and proportionate to
production growth. We generate solar
power on site at our factories in Belgium,
whilst our Sallent site in Spain buys solar
electricity directly from the grid. In addition,
we buy certified green electricity across
many of our other factories, and all of
these contribute to our total green energy
usage. We also track the energy from our
non-green energy providers, which can be
amix of non-green and zero carbon energy.
Operational waste
In 2024 we reduced our waste to landfill
across all our factories from 222 tonnes
to 170 tonnes. Our sites have continued
to focus on reducing waste year on year,
the result of which is shown in the second
chart. This year our Strzelce plant in Poland
has changed their waste management
provider, aiming to reduce their waste to
landfill significantly in 2025. The Group will
continue to work on its zero waste to landfill
target for 2025.
New targets for operations –
in line with science-based targets
In 2025, we will continue to monitor
performance against our 2025 product
sustainability targets. From 2025 onwards,
we will also start to collect data for our new
operational targets, which are aligned to our
science-based target commitment.
Our Scope 1 and 2 targets are currently
under review with the SBTi and we expect
to receive feedback in late calendar year
2024. In order to deliver our emission target
for the Group, each of our production sites
will have an energy reduction target, which
will be supported by our energy champions.
We will continue to increase the proportion
of green electricity used in our operations.
Looking ahead
In 2025, our energy champions will focus
on driving best practice sharing to ensure
delivery of our product sustainability
targets. We will conduct a water and gas
usage study to look for ways to reduce
water and gas usage going forwards. We are
also planning to raise awareness amongst
our colleagues through introduction of a
climate literacy programme. All operational
activities will be reported at our quarterly
Sustainability committee meetings.
Solar power electricity 0.9%
Certified green electricity 54.0%
Fuel oil 0.5%
Gas 29.1%
Supplier mix with
zero carbon electricity 8.0%
Supplier non-green electricity 7.5%
0
300
2021
502
2022
379
400
500
600
700
Tonnes
200
100
2023
222
2024
170
597
2020
581
2019
Split of energy source, including green element of supplier grid mix in 2024
Waste to landfill (tonnes)
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McBride plc Annual Report and Accounts 2024
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Sustainability continued
Fit for the future products
In 2024, we continued to focus on the following product improvements:
1. Improve plastic recyclability
2. Reduce total plastic use
3. Drive product compaction
Performance versus 2025 product sustainability targets:
Area of focus 2024 2023 2025 target
FSC® sourced 91.9% 88.4% 100.0%
100% recyclable 99.4% 99.0% 100.0%
50% PCR in our plastic packaging 25.8% 19.3% 50.0%
– PET 65.5% 60.2%
– PE 9.2% 8.4%
Flexible multi-plastic moved to
mono-material plastic
44.6% 36.0% 100.0%
In 2024, we increased the percentage of FSC®-sourced paper we buy and are still
committed to move this closer to 100% by the end of 2025. The challenge we still face is
increasing our percentage of PCR for our PE packaging. This challenge is a combination of
PCR availability, cost of PET and customer acceptance. We continue to drive a shift to more
recycled content and as of 2024, we have increased from 60.2% to 65.5% by weight of PCR
in our PET portfolio.
All of the divisions have driven compaction projects this year, which has been well received
by our customers. Product compaction projects have been across some of our most
popular products, including laundry liquid, fabric conditioner, auto dishwashing tablets,
laundry capsules and laundry powder.
Whilst we continue to provide everyday household cleaning products that are effective and
safe to use, we need to ensure that each new development is more sustainable than the
product it replaces. We continue to push forward this principle.
New targets for product development
– in line with science-based targets
In 2025, we will invest further in software
to measure individual product carbon
footprints to help guide product
development design decisions. This will
allow our developers to model different
approaches, ensuring we drive the lowest
carbon footprint possible through each new
product that we bring to market, to support
both our and our customers’ climate targets.
Looking ahead
The product development team will use
our new product carbon footprint tool to
support ongoing development. This will aid
our teams to find sustainable solutions with
the right balance in carbon reduction and
maintaining a great cleaning solution. Our
development teams across the divisions will
work together and share best practice.
29
McBride plc Annual Report and Accounts 2024
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Sustainability continued
Responsible sourcing and supplier engagement
In 2025, supplier engagement will be a key
area of focus to gain a better understanding
of the carbon footprint of our current
components and identify opportunities to
reduce the carbon footprint of our portfolio.
Our supplier engagement programme
will involve working collaboratively with
our largest suppliers who contribute
significantly to our footprint. We recognise
the criticality that suppliers play in our
decarbonisation journey. We are engaging
with our top suppliers via supplier webinars
and one-to-one meetings. We will assess
our suppliers in terms of carbon maturity
and will provide technical support to our
smaller less experienced suppliers.
Looking ahead
It is our intention to engage with our
key suppliers to understand their carbon
maturity and how we can support them
to set their own science-based targets.
We will be requesting emission factors for
the chemicals and packaging we buy from
our suppliers to use in our product carbon
footprint analysis. Over time, we want to
increase the percentage of primary data
weuse in our calculations.
Sustainability summary
In summary, we will continue to focus on our 2025 product sustainability targets.
These targets will transition into new science-based targets and in 2025, we will
continue to focus on our three strategic initiatives:
• operating sustainably;
• fit for the future products; and
• responsible sourcing and supplier engagement.
These activities will be underpinned with robust data management for monitoring
and reporting, customer and supplier engagement and rolling out a climate literacy
programme for all colleagues.
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Sustainability continued
Our people and communities
Social – Our contribution to our
colleagues and the communities
wherewe do business
As we reflect on the past year, our
unwavering commitment to creating
positive social impact remains at the
forefront of our mission. From fostering
DEI, to prioritising health, safety and
wellbeing, we have actively worked towards
creating a great place to work. Our focus on
developing skills for the future, promoting
employment opportunities and generating
wealth has strengthened our ties with
local communities. Together, we continue
to enhance community vitality and create
lasting change.
Highlighted in this section, you will find
examples from various locations of some
ofour initiatives over the year.
Diversity, Equity and Inclusion
As we progress on our journey towards
creating a more inclusive workplace,
our dedication to DEI remains resolute.
Throughout the year, we conducted
educational workshops for senior leaders
across all countries, emphasising pathways
to inclusion. These workshops equipped
leaders to actively champion DEI and
respond effectively to non-inclusive
behaviour.
At Hammel and Holstebro we embraced the
Danish Industry’s ‘Gender Diversity Pledge’.
This pledge, grounded in 16 principles,
inspires us to take action and drive positive
changes. Our focus includes strengthening
gender distribution within our company
and management, as well as promoting DEI
across the organisation.
Bycommitting to this pledge, we gain
valuable support and insight from other
businesses on our journey towards
becoming a more diverse, equitable and
inclusive workplace.
In December 2023, we introduced
our Employee Voice engagement
survey, achieving a commendable 74%
participationrate. Whilst the participation
rate for this initial survey was encouraging,
there is room for improvement, especially
amongst our manufacturing colleagues.
Theoverall engagement score of 7.3 out of
10 highlighted areas where we can enhance
the employee experience. By providing
verbatim comments, colleagues shared
valuable insights into how we can improve
their work environment and help to make
McBride a great place to work.
Furthermore, we maintain our commitment
to recruiting, developing and rewarding
colleagues based on their performance
and role, regardless of identity, background
orcircumstance.
Our commitment to transparency remains
unwavering. We continue to report our
gender pay gap statistics annually, both
on the UK’s government website and our
corporate website. As of 30 June 2024,
female representation on both the Board
and Executive Committee stood at 33.3%.
Our goals for Board diversity canbe found
on page 75.
33.3% (2/6)
Female Directors
33.3% (2/6)
Female Executive Committee members
32.7% (17/52)
Female senior leaders
(1)
37.1% (1,369/3,695)
Female total global workforce
(2)
(1) Includes senior female leaders that report directly to the Executive Committee.
(2) Includes employees, third-party contractors and agency workers.
As at 30 June 2024
31
McBride plc Annual Report and Accounts 2024
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Sustainability continued
Health, safety and wellbeing
At McBride, we take health, safety and
wellbeing seriously. Our Group health
andsafety lead reports directly tothe CEO,
underscoring our commitment. Dedicated
health and safety professionals at local
site levels across all countries ensure the
delivery of Group policies and standards.
They also implement initiatives, processes
and procedures, fostering a culture of safety
and accident prevention.
In 2024, we once again ensured zero
work-related fatalities. Our overall lost
time incidents (LTI) frequency rate
decreased from0.88 to 0.75. To assess
our performance, we use a mix of lagging
and leading indicators. Lagging indicators
include LTI, whilst leading indicators
encompass near miss reporting, training
compliance, quick risk predictions, dynamic
risk assessments, correctiveactions, risk
assessments and safety observational walks.
Our zero loss journey maps, developed
from a comprehensive Health, Safety and
Environment (HSE) gap analysis in 2023,
guide our progress. Thesemaps include a
five-year overview plan, an annual master
plan and a quarterlypriority plan, ensuring
site teams have clear strategies and priority
objectivesfor continuous improvement.
In 2024, we implemented EcoOnline,
anenvironmental, health, safety and quality
(EHSQ) software solution. It provides
real-time insights, consistent information
and actionable data. Safety observational
walks, standardised across the Group,
alsocontribute to valuable analysis.
Additionally, we appointed an HSE resource
to develop 28 Group standards for key
health and safety elements. Our revised
health and safety governance framework
includes a steering committee, ensuring our
goals are achievable. We are committed
to building structures that meet future
demands and expectations.
Early in calendar year 2024, we launched
our second Employee Voice survey focused
on health and wellbeing. Withan impressive
77% participation rate, the surveyyielded
an overall score of 7.2outof 10. Employee
wellbeing encompasses various dimensions,
includingphysical, mental and social health.
By combining insights from this survey
with our engagement data, we will develop
targeted approaches to enhance employee
engagement and health and wellbeing
across all our locations in the coming year.
During 2024, we partnered with
an externalcompany to conduct a
comprehensive cultural survey within our
organisation. This survey explored individual
and group values, attitudes, perceptions,
competencies and behavioural patterns
related to health and safety management.
We have developed action plans to address
key findings in the upcoming financial year.
Our strategic focus for 2025 centres on
enhancing employee engagement, fostering
a culture of responsibility, accountability
and compliance. By doing so, we aim to
reduce the risk of injuries and uphold our
health and safety vision statement: ‘Working
together to ensure everyone returns home
healthy and safe every day’.
Skills for the future
At McBride, we offer a wide range of
careerdevelopment options, empowering
our colleagues to reach their full potential
and achieve their professional ambitions
through learning and coaching programmes.
Our approach involves aligning individual
goals with the Company’s overall success.
During the past year, as part of our
commitment to internal growth and
colleague investment, we facilitated four
cohorts of ‘Investing in Me,’ two cohorts
of ‘Learning 2 Lead,’ and one cohort of
‘Leading with Impact’ from our ‘Let’s Grow’
development framework. These initiatives
collectively involved 70 colleagues across
the Group, totalling 2,153 training hours.
Since the launch of our ‘Let’s Grow’
programmes in 2020, 407 colleagues
from various functions and countries have
participated in these courses, accumulating
10,283 training hours.
In addition to our focus on internal
capability development through ‘Let’s Grow,’
we prioritised the following areas in2024:
1. Compliance training: We introduced
essential compliance training for
colleagues, emphasising the importance
of maintaining a safe and reliable
company. Addressing risks such as
anti-bribery, corruption, conflicts
of interest and data protection, our
interactive online training programme is
available in twelve languages covering all
countries where we operate.
2. Self-paced learning library:
Ourrevamped self-paced learning library
offers over 1,000 programmes, allowing
colleagues to acquire new skills at their
convenience.
3. Change management certification:
Tosupport our transformation
journey, we have certified eleven
internal colleagues as Prosci
change management practitioners.
Theirexpertise will help drive our
strategic objectives and support
colleagues during organisational shifts.
4. Role-specific training: We continue to
provide targeted training, both on and
off the job, ensuring colleagues have the
necessary skills for their roles, including
health and safety training.
5. Internal coaching scheme: Our safe and
supportive internal coaching scheme
remains active, allowing colleagues to
work with qualified coaches.
6. Myers-Briggs Type Indicator (MBTI)
utilisation: We have delivered MBTI
training courses to enhance individual
and team awareness.
At McBride, we are passionate about
creating growth opportunities for all
colleagues, enabling them to thrive in their
current roles and fulfil their aspirations for
the future.
Our people and communities continued
32
McBride plc Annual Report and Accounts 2024
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Sustainability continued
Employment and wealth generation
Our staff turnover figures have remained
consistent throughout the year at c.5%.
Additionally, we have observed several
‘boomerang’ employees returning
to McBride over the course of the
year. Thishas been beneficial as they
bring familiarity with our culture and
organisational expectations, whilst also
offering a fresh perspective.
We have maintained close collaboration
with the EWC over the past year. Partnering
with employee representatives from all
countries where we operate remains a
priority for us.
Community and social vitality
We believe that community involvement
and engagement programmes strengthen
our relationships with colleagues and
communities, benefiting our company
andshareholders through colleague
retention, enhanced reputation and positive
relationships with local governments and
communities.
This year, we launched our ‘McBride
Gives’ volunteering scheme, encouraging
colleagues to participate in giving time
to local charities. We will partner with
community centres and associations that
provide services and support to low-income
families as this aligns with our company
purpose of ‘everyday value cleaning
products, so every home can be clean
andhygienic’.
Supporting McBridechildren
Promoting future talent is a priority for
us through our McBride Charitable Trust,
where we offer educational (university/
apprenticeships/vocations) grants to
support children of our colleagues that
are undertaking a supplementary course
of study leading to a recognised national
qualification, after having obtained a first
national recognised qualification. During
the year, we granted £12,411 to 67 children
of McBride colleagues, supporting their
education and personal growth
Supporting charitablebodies
Throughout the year, we sustained our
commitment to the UK charity ‘In Kind
Direct’ by making monthly product
donations from our Middleton site.
Theseessential cleaning products directly
benefit those who are less fortunate.
Additionally, our teams across all locations
have remained dedicated to supporting our
local communities, whilst also strengthening
our culture and team engagement.
Thefollowing pages highlight some of the
impactful activities across our business.
Rosporden, France:
Team McBride
Our entire Rosporden team of 135 colleagues gathered for a ‘team building’ day at
Domaine de Lanniron in Quimper. The aim was to enhance collaboration amongst
colleagues who do not usually work together. The morning was spent revisiting key
departmental events, celebrating successes and reflecting on our pride in being part
of McBride Aerosols. Participants formed 24 teams and played games to earn points,
before merging into twelve teams who were then challenged to construct a car
using materials won during the games. This activity promoted co-ordination, active
listening and innovation. The creative results were impressive, with one car chosen
as a symbol of our day. We also shared future project ambitions and welcomed new
joiners. Thedayended with a quiz based on the day’s activities, with teams performing
admirably. This event fostered a deeper understanding of our business and created
convivial moments that contribute to our growth.
Our people and communities continued
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McBride plc Annual Report and Accounts 2024
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Sustainability continued
eper, Belgium:
Products come to life:
Afamily experience
On 19 and 26 April, our eper Liquids
manufacturing site welcomed family
and friends of colleagues. The purpose
was to offer them an opportunity to
connect with their loved ones and gain
insight into our products and processes.
Over the two dates, more than 400
visitors enjoyed a 90-minute guided tour
of our site led by McBride colleagues.
Colleagues and visitors alike provided
positive feedback, and everyone received
goodie bags containing samples of
the products manufactured at the
site. Theevent not only enhanced our
presence within the local community,
butalso served as a testament to the
exciting career opportunities that
McBride offers to potential future talent.
Hammel & Holstebro,
Denmark: Local Code
ofCare
Through our membership in the local
Code of Care, a non-profit organisation
that promotes social responsibility,
creating opportunities for individuals
facing challenges entering or re-entering
the job market, we have organised and
participated in local job fairs to promote
McBride as an employer of choice.
Additionally, we offered apprenticeships,
part-time roles and express employment
as part of the Care for Young initiative,
which focuses on helping young
people enter the job market and
gainessentialskills.
Bagnatica, Italy:
Fostering connections
Creating and fostering a great place
to work, our Italian team organised an
end-of-financial-year gathering where
colleagues and their families joined
in. The event aimed to commemorate
the year’s achievements and foster
relationships. More than 50 colleagues
participated, enjoying time together
withfood and drinks.
Our people and communities continued
Strzelce, Poland:
Making a difference
bygiving time
This year, our new ‘McBride Gives’
volunteering scheme positively impacted
the community of Opole, Poland. More
than 50 colleagues from our Strzelce
site dedicated a day to volunteering at
the House of Hope, which is a charity
operated by volunteers and clergy
to provide crucial support to people
suffering from homelessness or economic
deprivation. The House of Hope provides
food, clothing and bathing facilities, as
well as the respect and dignity needed
tohelp its patrons get back on their feet.
Our ‘McBride Gives’ scheme
demonstrates commitment to the
communities where we work and
live. By volunteering locally at places
like theHouse of Hope, we actively
contribute to making a difference
acrossthe world. Together, we
strengthen our community bonds and
create a ripple effect that extends far
beyond our immediate surroundings.
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How we conduct ourselves
We believe robust corporate governance
fosters sound and responsible
decisionmaking and strengthens
accountability, transparency and fairness.
As a public company, we consider that
our governance processes are already well
established. However, we recognise these
processes need to be maintained and
regularly reviewed to ensure we continue to
govern our activities with financial integrity
and in accordance with best practice.
Governance body quality
Our guide to how we have complied with
each principle in the Code is set out on
page 64. Our metrics on tenure, gender,
nationality and Board members’ relevant
experience are set out on page 67. Our
metrics on Board activity and attendance at
Board and Committee meetings are set out
on pages 66, 69, 70, 71, 76 and 100.
Stakeholder engagement
How we engage with our stakeholders is
set out in our Section 172(1) statement
on pages 22 to 24 and in our Corporate
governance statement on pages 65 to
70. Both the quality and frequency of our
engagement with our key stakeholders are
reviewed regularly by the Board. We are
open and transparent in all our dealings
with our stakeholders, which we consider
as fundamental to our way of working.
Monitored via our framework of key
indicators and metrics, we strive to improve
our customer experience, our impact on our
communities, including our environmental
and social impact and the quality of
engagement with all stakeholders.
Ethical behaviour
We are committed to conducting business
with integrity and high standards of
business ethics. Our Business Ethics Policy,
which can be found on our website, is a
guide for our employees to promote the
right behaviours and to help them make
the right decisions. McBride’s Business
Ethics Policy is updated and reviewed by
the Board annually. It is promoted to all
employees through internal communication
channels and is highlighted to suppliers.
To ensure a constant minimum standard
across the workforce on good business
ethics, McBride has rolled out mandatory
ethics and compliance training modules
to all its colleagues in management and
administrative roles. This includes modules
on anti-bribery and corruption, conflicts of
interest, data protection and whistleblowing.
Whilst McBride aims to reinforce a healthy
culture at all levels of the organisation,
itknows that sometimes things go wrong.
McBride has an independent whistleblowing
channel, as well as local internal channels,
which employees can use to speak up
against possible malpractice or wrongdoing
by any employee, supplier, customer,
competitor or contractor. The independent
whistleblowing reporting line is designed
to give colleagues and others a way,
anonymously and confidentially, without
fear of detriment or retribution, to report
suspected violations of our standards of
conduct, policies, laws or regulations. The
reporting line is available in all languages
commonly used in our business. Any reports
received are evaluated by representatives
from the Internal Audit and Legal functions
to determine the appropriate action to
address the issues raised.
If warranted, an investigation is undertaken
to determine the validity of the issue
reported and to identify appropriate action
to address it.
Cyber security and data protection
With the advancement and widespread
use of information and communication
technologies, comes an increased cyber
security threat. We regularly assess our
corporate readiness against external
cyber attacks and insider threats, and
weimplement corporate-wide measures
to protect data and preserve data
privacy. In addition to complying with
applicable data protection laws and
regulations, wealso implement cyber
security and data protection measures
to safeguard ourassetsand to protect
ourstakeholders’data.
Our policies and procedures focus on
protecting our data from unauthorised
disclosures, use or access, and include
monitoring mechanisms to prevent
unauthorised intrusion into our network
and identify vulnerabilities against potential
cyber attacks. These risk-based cyber
security measures help to ensure the
integrity, confidentiality and availability
of our data. Regardless of where the data
resides, we apply appropriate safeguards
to ensure a sustainable and robust
corporate environment in the interest of
our stakeholders. Compliance with our
IT policies is required of anyone who has
access to our networks. We raise awareness
about the importance of data protection
and cyber security with our colleagues
through training.
Risk and opportunity oversight
We are focused on continuous improvement
to develop and enhance our control
mechanisms to manage risks and maximise
financial returns for our stakeholders. There
is active engagement with management
and leadership teams to identify and assess
risks related to our strategies and business
models. The experience of management
and leadership teams helps to anticipate
emerging and interrelated risks, in addition
to facilitating effective risk control and
mitigation mechanisms.
The Board is responsible for overseeing and
monitoring the management of risks and
opportunities. Our governance framework
of committees and advisory forums
provides updates and information to the
Board to ensure it is able to make informed
decisions. Details on the responsibilities of
the Board and its Committees are set out
in the schedule of matters reserved for the
Board and Committee Terms of Reference,
which are available on our website.
Our risk management framework and
oversight of risk is set out in the Audit and
Risk Committee Report on pages 80 to 82
and in the Principal Risks and Uncertainties
section on pages 53 to 59. This is our
third year of reporting our climate-related
financial disclosures. Governance around
climate-related risks and opportunities can
be found on pages 36 to 37.
Sustainability continued
Governance
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McBride has structured its climate
disclosures according to the
recommendations set out by the Task
Force on Climate-Related Financial
Disclosures (TCFD), in order to improve
reporting of climate-related risks and
opportunities (CROs) and support
shareholders in making more informed
long-term investment decisions.
According to the Financial Conduct
Authority Listing Rule LR 9.8.6 R(8),
reporting is on a ‘comply or explain’ basis.
We are fully consistent with the full
set of TCFD recommendations and
recommended disclosures. We have
continued to make further progress on
our TCFD journey this year by building
on the activities of 2023. We have
also considered the TCFD’s All Sector
Guidance in determining our consistency
statement above.
We will continue to work on the maturity
of climate risk assessment in 2025 as
data collection and internal sustainability
policies are further developed, helping
to inform residual risk exposure.
Our analysis will continue into 2025,
assessing key risks in greater detail,
including the residual risk impacts across
products, operations and potential
changes in consumer behaviour and
usage. Our longer-term risks, primarily
physical risks, will also be assessed and
quantified in greater detail starting in
2025, building upon the initial work
done in previous years. This will help us
to focus activity where we can create
the greatest impact and to capitalise on
potential opportunities associated with
a low-carbon transition, supporting our
business resilience and growth in a future
low-carbon economy.
Page 49 explains the work to be
completed to ensure consistency with the
TCFD recommendations and sets out the
activities McBride has planned to perform
during 2025, as it continues on its journey
towards increased consistency.
Governance
Board oversight of climate issues
The Board
• Is responsible for overseeing and
monitoring the management of risks and
opportunities, including CROs.
• Maintains knowledge and understanding
of current and emerging legislative and
regulatory developments pertaining to
climate-related matters.
• Provides strategic guidance in respect
of McBride’s Sustainability programme
covering its ESG activities.
• Endorses actions to address
climate-related matters and how McBride
adapts its strategy to take account of
potential CROs.
• Reviews climate-related reporting as part
of the overall assessment of the Annual
Report and Accounts.
Nomination Committee
• Is responsible for Board appointments.
• Ensures the Board possesses the correct
depth and balance of capabilities, including
the ability to assess the impact ofclimate
change through ongoing briefing sessions
during the course of the year.
• Ensures Board appointments support
McBride’s long-term position.
Audit and Risk Committee
• Oversees the assurance model and
supports the Board on matters relating
to financial reporting, internal control and
risk management.
• Monitors climate-related risks and
associated key risk indicators (KRIs) on
an ongoing basis, as part of reports on
principal Group-wide risks presented to
itby the Risk Council.
• Appraises the integrity of McBride’s
climate-related financial reporting.
• Assesses the process used to develop
McBride’s TCFD-aligned disclosures.
TCFD governance structure
The TCFD governance structure is set out in the graphic below. This framework enables the
Board to make more informed business decisions with climate-related perspectives in mind.
McBride Board
CEO
Nomination
Committee
Audit and Risk
Committee
Remuneration
Committee
Executive Committee
Sustainability committee
(1)
Risk Council
TCFD Working Group
(1) The Executive Committee and Sustainability committee, both led by the CEO, provide advice and input to the
TCFD Working Group during the preparation of the TCFD disclosures.
Climate-Related Financial Disclosures
 Decision making
 Advisory
 Reporting line
  Exchange of
information and
insights
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McBride plc Annual Report and Accounts 2024
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Board oversight of climate issues
continued
Remuneration Committee
• Supports the future implementation
of Board-approved policy on
CROs, including climate factors
and sustainability goals within
performance-related pay for Executive
Directors and senior management.
Seefurther details in the Remuneration
Committee Report on pages 83 to 102.
Role of senior management
Executive Committee
• Is responsible for the implementation
of strategy and the management of
financial risks, including those of meeting
the Group’s climate-related goals.
This is done through the operational
management of McBride’s divisions and
monitoring of performance in line with
agreed plans.
• Receives information periodically from
the Risk Council and Sustainability
committee on progress towards the
Group’s climate goals. This is done by
reviewing regular reports by the Risk
Council on climate-related risks and
associated KRIs, and taking appropriate
actions, asnecessary.
Sustainability committee
• Is responsible for the Group’s overall
Sustainability programme, with each
committee member responsible
for monitoring key sustainability
developments and implementing actions
within their own business area.
• Delivers the Sustainability programme,
monitoring progress against key
indicators and action plans.
• Continues to develop, review
and monitor progress against
Board-approved science-based targets
and a focused roadmap of emissions
reduction opportunities.
• Provides oversight to the Executive
Committee on sustainability matters,
collaborating with subject matter experts
within McBride, as appropriate.
• Will be enhanced during 2025 by a
broader multi-functional committee led
by the newly appointed Group Head
of Sustainability. The Group Head of
Sustainability, in conjunction with the
Sustainability committee, is expected to
drive and co-ordinate the achievement of
the Group’s carbon reduction ambition
and lead the cultural and compliance
requirements to achieve agreed
targets and meet applicable reporting
obligations in this area.
Risk Council
• Is responsible for managing climate risks
through its existing risk management
processes. This includes review and
oversight of the underlying activities,
processes, risks and impacts surrounding
our climate-related financial disclosures.
• Reports to the Audit and Risk Committee
on McBride’s principal risks, including
CROs, and on the performance of
the TCFD Working Group, including
progress against the TCFD disclosures
requirements.
• Has direct responsibility for principal
risks and uncertainties, reporting to the
Executive Committee and the Audit and
Risk Committee, communicating any
updates on key climate-related risks on
at least a twice-yearly basis.
TCFD Working Group
• Is responsible for identifying and
considering CROs and their impact as
they pertain to the organisation.
• Evaluates the resulting implications of,
and responses to, key CROs, ensuring
valuable input from stakeholders is
incorporated into the process.
• Reports to the Risk Council, operating
on a collaborative basis with members
from various divisions and departments,
playing a pivotal role in shaping
climate-related financial disclosures.
• Collaborates with the ESG Committee
to ensure that the roadmap of emissions
reduction opportunities is aligned with
the TCFD recommendations.
• Actively monitors and tracks the progress
made towards climate-related targets,
ensuring a comprehensive approach to
address climate-related concerns.
External advice
McBride continues to engage expert
external advisers to supplement the
capabilities within the Company and assist
in establishing reporting frameworks for
our Scope 1, 2 and 3 emissions and to aid
in the process of setting and monitoring
science-based targets for our Scope 1,
2 and 3 emissions. External expertise
has also been employed in the detailed
analysis of our transitional and physical
CROs associated with the transition to a
decarbonised economy and the potential
impact of specific physical risks to the
McBride estate. Further details can be found
on pages 38 to 46.
Climate-Related Financial Disclosures continued
Governance continued
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Overview of scenario analysis
The distinctive nature of climate risks poses
a challenge for standard risk assessment.
This is because there is a high degree
of certainty that some combination of
climate risks will materialise, but the exact
outcomes are dependent on short-term
actions and are therefore still unclear.
Scenario analysis provides a flexible ‘what if’
framework that enables the exploration of
potential economic outcomes and financial
risks under a range of different future
pathways. As such, qualitative scenario
analysis was used to assess McBride’s
strategy against two contrasting climate
scenarios: a 1.5°C low carbon world scenario
and a 4°C hot house world scenario, similar
to prior years.
McBride has continued to work closely
with expert external advisers since 2022 to
address our climate risks and opportunities
(CROs). In 2022, physical and transitional
CROs were identified and assessed via a
workshop with a cross-section of internal
stakeholders. The identified risks were rated
in the context of McBride’s ERM framework.
Based on the findings, further detailed work
was undertaken in 2023 to better quantify
six transition CROs which were perceived as
posing more immediate short/medium-term
risk. During 2024, McBride has worked with
the external adviser to strengthen ongoing
efforts to improve the quality and maturity
of climate risk assessment and disclosure,
with the objective of improving alignment
with the TCFD and other related emerging
regional disclosure frameworks and
standards (e.g. ISSB/IFRS).
Specifically, wehave:
• refreshed the overall CRO assessment
initially conducted in 2022, detailing
specific physical and transition risks;
• analysed residual risk for key transition
CROs, assuming a low carbon world
(1.5°C) scenario, including potential
regulatory, market and reputational
risks;and
• commenced a detailed assessment and
quantification of longer-term physical
CROs, to be conducted on a three-year
cycle across the entire McBride estate
under climate scenarios that include both
the low carbon economy (+1.5°C) and the
hot house world (+4°C) scenarios.
Selection of climate scenarios
We constructed scenarios by referencing a
collection of published scenarios developed
by widely used sources, including the IPCC,
IEA and NGFS. These sources are detailed
in the following table. The assumptions
underpinning each of these scenarios, such
as greenhouse gas emissions pathways,
energy demand and policy responses, are
detailed further on pages 59 and 60 of our
2022 Annual Report, supplementing our
TCFD disclosures for 2024. Going forward,
and in line with TCFD requirements, we
intend to review and update our climate
scenario analysis at least every three years,
when scenario indicators change, or if there
is a change to our business. This is planned
to be conducted during 2025.
(1) Technical Summary, IPCC, 2018.
(2) World Energy Outlook 2021, IEA, 2021.
(3) NGFS Climate Scenarios, NGFS, 2021.
(4) SSP1 – The roads ahead: Narratives for shared
socioeconomic pathways describing world futures
in the 21st century, O’Neill, B et al, 2015.
(5) Technical Summary, IPCC, 2018.
(6) SSP5 – The roads ahead: Narratives for shared
socioeconomic pathways describing world futures
in the 21st century, O’Neill, B et al, 2015.
See more on page 45
Strategy
Climate-Related Financial Disclosures continued
Climate
scenario
Temperature
riseby 2100
Policy
action Informed by
Low carbon
world scenario
Not likely to
exceed + 1.5°C
by2100
Aggressive
mitigationto bring
about a reduction
inemissions
RCP 1.9
(1)
IEA NZ2050
(2)
NGFS NZ2050
(3)
SSP1
(4)
Hot house
world scenario
Likely to exceed +
4°C by 2100
Minimal policy
action taken
RCP 8.5
(5)
SSP5
(6)
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Likelihood
Low Medium High
Timeframe
Short term Medium term Long term
Climate risks and opportunities
In 2022, 15 CROs were identified, including
regulatory changes, market shifts and
physical impacts, such as extreme weather
events. These risks and opportunities were
identified over short (before 2027), medium
(2027 to 2040) and long-term (post-2040)
time horizons. The short-term time horizon
was considered as the mid-point of time
horizons used for business planning
purposes, with the medium-term time
horizon encompassing timelines for
sustainability targets (including SBTi).
Thelong-term time horizon was selected
based on the longer-term timeframes
involved with some climate-related risks,
specifically physical risks.
As part of the assessment, a structured
scenario analysis methodology was
employed to evaluate the likelihood of
each risk impacting McBride and the most
likely time horizon of impact, incorporating
quantitative and qualitative data.
These 15 risks and opportunities are
evaluated in further detail on pages 61
to 66 of McBride’s 2022 Annual Report,
which supplements our TCFD risk
reporting for 2024. These CROs continue
to be monitored as part of management’s
ongoing risk management processes. In
2024, the original assessment of transition
risks conducted in 2022 was refreshed to
ensure an up-to-date understanding of risk
exposure and to check for any emerging
transition risks.
The key results from this exercise are:
• nine of the eleven transition CROs
identified in 2022 were deemed
relevant for 2024, with updates to their
likelihood and timeframe assessments
based on recent market and regulatory
developments;
• the previously identified climate-related
employee risk, initially focused on
employee health and safety, is now
managed alongside the broader
enterprise risk of employee attraction
and retention, leading to its removal
fromour CROs;
• the transition opportunity related to
operational decarbonisation has been
integrated into a broader initiative
focusing on more efficient production
and distribution processes, reflecting
a more holistic approach to reducing
carbon footprint;
• a new transition risk related to emissions
offset was identified in 2024, driven by
anticipated increases in offset prices and
the impact on cost structures; and
• the four physical risks identified
in 2022, including risks related to
flooding, heatwaves and supply chain
disruptions, remain relevant with updated
assessments reflecting the latest climate
models and impact projections.
These changes resulted in 14 CROs
considered relevant for 2024 which are
summarised in the chart opposite.
Transition risks
1
Pricing of GHG emissions
2
Climate change litigation
3
Mandates and regulation
4
 Increased cost of raw materials
5
 Change in consumer demands
6
Investment and finance risk
7
 Substitution of existing tech to lower
emissionoptions
8
Emissions offset
Transition opportunities
9
 Use of more sustainable and efficient
production and distribution processes
10
 Development of new products or services
through R&D and innovation
Physical risks
11
Heat stress (heatwaves)
12
Drought stress (prolonged drought period)
13
Floods, storm surge and sea level rise
14
Windstorms
8
2
3
6
9
10
Strategy continued
1
4
5
7
11
12
13 14
Climate-Related Financial Disclosures continued
Note: Relative position of risks/opportunities within grid boxes does not reflect relative ranking (e.g. for 2, 6 and 9).
39
McBride plc Annual Report and Accounts 2024
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Climate risks and opportunities
continued
Based on the above, physical and
transition risks and opportunities have
been considered across the climate
scenarios described above. In 2024, as
a result of marked progress in McBride’s
decarbonisation strategy and more detailed
site-level physical risk analysis, the business
has been able to better define mitigations/
adaptation measures and factor these
into the scenario analyses. McBride is
consequently able to better evaluate the
resilience of its strategy to climate-related
risks.
A subset of these CROs was prioritised for
residual risk assessment in 2024, based on
the quantitative assessment of inherent risk
in 2023. Specifically, the following should
benoted:
2
This remains unlikely with minor impact
and was deemed most likely to occur
later than previously thought.
6
This is no longer deemed an immediate
risk, although still likely. Impact has
dropped considerably due to a Group
refinancing facility that was successfully
established since the last assessment,
with sustainability-based performance
targets that are being consistently
achieved.
8
This is now deemed a risk due to
the setting of SBTi targets but was
considered to be longer term due to
theNet Zero target time horizon.
Strategy continued
Climate-Related Financial Disclosures continued
Consequently, no further quantification
or updated assessment was considered
necessary for these three risks at this
stage, whilst a residual risk assessment
for all other CROs was conducted in
2024, outlined in the following pages.
The tables below detail the impact of
climate-related risks and opportunities
on McBride’s businesses and strategy,
providing a comprehensive breakdown
of exposure by both key transition and
physical risk.
Pricing of GHG emissions
Inherent risk 2027 2040
Gross risk score
Max financial impact £2.9 million
per annum
£4.5 million
per annum
Residual risk 2027 2040
Net risk score
Max financial impact £2.3 million
per annum
£2.0 million
per annum
Key: Gross and net risk and opportunity scores (impact x likelihood):
Lower Medium Higher
Description
Carbon taxes are expanding globally, with the
EU Emission Trading System (EU ETS) already
up and running. The EU ETS benchmark carbon
price in February 2022 reached a record high
of nearly EUR 96 per tCO
2
e. Carbon pricing
could manifest as a range of policies such as
environmental,and/or sector-wide taxes, which
could increase operational costs.
Impact assumptions
Carbon prices based on IEA and NGFS
forecasts; emissions based on current Scope 1
and 2 assuming it is not anticipated to increase.
Residual risk has been calculated based on
Scope 1 and 2 emissions reduction target of
58.9% by 2033, with linear reduction out to
2027. Calculations for 2040 assume emissions
will remain consistent beyond 2033, given no
SBTi targets have been set beyond this yet.
Controls/mitigation
Ensure continued achievement of 30% of
energy from renewables by 2025 and 100% by
2033 to meet target, as well as enforcement
of site energy saving targets. In addition, a
science-based target project is underway to
develop Net Zero targets and an associated
action plan. In parallel, proposals are also under
consideration for upgrading vehicle fleet to
electric vehicles, as well as accelerating the shift
from gas to electricity.
Transition risks
1
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Strategy continued
Climate-Related Financial Disclosures continued
Increased cost of raw materials
Inherent risk 2027 2040
Gross risk score
Residual risk 2027 2040
Net risk score
Max financial impact not applicable for inherent or residual risk.
Key: Gross and net risk and opportunity scores (impact x likelihood): Lower Medium Higher
Description
As we move to a low-carbon economy, the
implementation of carbon taxation could lead
to higher prices for raw materials, chemicals,
plastics and energy costs. This could lead
to higher costs of packaging and product
costs. Increased cost of fuel could also affect
the transport of products to customers. The
higher costs suppliers face may be passed
onto McBride’s supply chain; this could be
passed onto customers or alternatively erode
McBride’smargins.
Impact assumptions
Carbon prices based on IEA and NGFS
forecasts; emissions based on current Scope 3
(with a focus on purchased goods and services)
estimates assuming levels remain consistent
through to 2040. For residual risk, Scope 3
reduction could be driven by supplier-led
emissions reduction. These cannot currently be
accurately estimated until feedback is received
from suppliers over the next five years and so
savings have been factored in based on the
manufacturing changes.
Controls/mitigation
Committed to a supplier engagement target for
the next five years in order to refine Scope 3
current estimates and outlook. Initial assessment
of top suppliers and RAG exercise completed,
with 53% suppliers confirming plans to set
SBT targets. Reformulation of products will be
explored to minimise cost impact. At a divisional
level, McBride will work with both suppliers and
customers to explore levers to manage cost risk
and reduce emissions across the supply chain.
Mandates and regulation
Inherent risk 2027 2040
Gross risk score
Residual risk 2027 2040
Net risk score
Max financial impact not applicable for inherent or residual risk.
Description
Increased compliance/operational costs,
reformulation costs and/or legal fines for
non-compliance.
Impact assumptions
• Environmental legislation such as PEF
ratings and other mandates for detergents
are likely to emerge in EU post-2025. This
could result in fines and possibility of lower
demand of certain products.
• Certain chemicals could be banned within
products for environmental reasons which
could result in the need to reformulate
some McBride products.
• Introduction of digital product passports
across the EU would increase administration
costs and require more FTEs.
• McBride already pays plastic taxes in
countries that require this and the cost
of these, plus any new taxes, will likely
increase between 2025 and 2030.
Controls/mitigation
• Employ experts in regulatory compliance
and product safety to act on behalf of the
Company.
• Continue working with industry group such
as AISE on monitoring developments and
engaging with regulators.
• Continuing to internally scan regulations,
monitor developments and provide impact
assessments to the business.
• Undertake technology scanning to
ensure McBride remains up to date in its
knowledge, explore use of third-party
assistance.
Transition risks continued
4
3
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Substitution of existing tech
tolower emission options
Use of more sustainable and efficient
production and distribution processes
Strategy continued
Climate-Related Financial Disclosures continued
Inherent risk 2027 2040
Gross risk score
Max financial impact <£0.5 million
per annum
>£4 million
per annum
Gross opportunity score
Max financial opportunity <£0.5 million
per annum
<£0.5 million
per annum
Residual risk 2027 2040
Net risk score
Max financial impact £1-3 million revenue per annum
Net opportunity score
Max financial opportunity <£1.0 million per annum
Key: Gross and net risk and opportunity scores (impact x likelihood):
Lower Medium Higher
Change in consumer demands
Inherent risk 2027 2040
Gross risk score
Gross opportunity score
Residual risk 2027 2040
Net risk score
Max financial impact £1-3 million revenue per annum
Net opportunity score
Max financial opportunity £3-5 million revenue per annum
Max financial impact not applicable for inherent risk or opportunity.
Description
McBride’s retail customers are increasingly
prioritising reducing carbon emissions and more
sustainable business practices as awareness
of the impacts of climate change increases.
This shift is more likely to accelerate as Gen Z’s
spending power increases. Failure to meet these
shifting values could cause retail customers to
switch to alternative products. Alternatively,
capitalising on sustainability reputational
benefits could provide McBride the opportunity
to extend market share and/or increase revenue.
Impact assumptions
McBride’s divisions were consulted regarding
the perceived risk to their products and
services based on their technical expertise
and experience in the markets. Each division
provided an indication of financial impact range,
which were consolidated for an enterprise risk
level exposure.
Controls/mitigation
Each division is addressing this risk/opportunity
differently depending on the relative impact
on their product mix. All divisions have
considered sustainability in the context of
product development, including with respect
to: sustainability of packaging; reducing
energy intensiveness of production; reducing
the embodied carbon content of products via
alternative materials; and increasing production
capacity for eco-friendly products.
Liquids is the largest division by revenue;
its focus is on reducing packaging material,
reducing water use in production, reducing
Scope 3 emissions, compact formulations,
transitioning to plant-based, reducing waste
and increasing the use of recycled plastic in
packaging.
Divisions will continue to innovate via R&D and
work closely with retailers and branders to stay
abreast of consumer requirements.
Development of new products or
services through R&D and innovation
Description
As we move to a low-carbon economy, the
implementation of different packaging, new
materials and technology could lead to a
requirement for some technology enhancement
and substitution. Meanwhile, more efficient
distribution processes could lead to operational
savings, for example due to lower input material
requirements or due to more compact products
leading to more efficient distribution.
Impact assumptions
McBride’s capital asset register was reviewed,
and assumptions were built around the
obsolescence risk to different technologies.
Analysis from McBride’s science-based target
setting workstream on other technological
initiatives was also factored in to inform
potential cost ranges, as well as insight from
internal subject matter experts.
Controls/mitigation
The science-based target setting workstream
is in the process of finalising recommendations
for emissions targets. The workstream has
identified some costs and opportunities
associated with technology initiatives. McBride
is exploring alignment between climate risk
assessment. Significant budget spend has
been allocated across divisions to mitigate this
risk. Further consideration is being provided
– aligned with market demand; however, the
capital expenditure mitigation will be part of the
general capital expenditure as assets reach the
end of their useful life.
Transition risks continued
7
5 10
9
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Climate-Related Financial Disclosures continued
Strategy continued
Heat stress (heatwaves)
Periods of time with sustained high
temperatures in excess of 30°C.
Impact:
Minor Moderate High
Likelihood:
Unlikely Possible Likely
Business impact assessment
People:
• Reduced labour productivity/ineffective
work performance.
• Fainting potential if exposed to
temperatures over 35°C. Threat to life for
the vulnerable.
Physical assets (operations & suppliers):
• Increased OPEX, energy consumption and
carbon emissions due to increased cooling
demand.
• Inadequate or inefficient ventilation leading
to H&S risks.
• Issues with equipment cooling and quality
control.
• Potential overloading of the power grid.
• Supply chains can be disrupted due to
transportation delays, reduced productivity,
or interruptions in the availability of goods
and services.
• Higher chances of ‘fire weather’.
Risk response: adaptation/
mitigation options
People:
• Limiting or modifying the duration of heat
exposure time of workers.
• Reducing the metabolic component of the
total heat load, majorly through automation
of the physical components of the job.
• Workers medical evaluations.
• Identify tedious/discomforting commute
journeys and encourage transport modes
that are less affected by heatwaves.
Physical assets (operations & suppliers):
• Review operating temperature tolerances
for machinery.
• Review inefficiencies and improve five major
types of engineering controls – general
ventilation, cooling fans, air conditioning,
reflective shields to redirect radiant heat,
and insulation of hot surfaces to reduce
heat stress.
• Considering heat-reflecting exterior
treatment on the walls. Cool roof paint has
a cooling potential of 2°C to 4°C; reflective
paints applied to roofs can help reduce
the amount of indoor heat by reflecting
heataway.
• Consider installation of exterior shading as
an energy-effective measure for responding
to the impact of increased heat gain.
• Introduce natural cooling and ventilation
solutions.
• Maintain a good practice fire loss control
maintenance and mitigation regime.
• Collaborate with suppliers, implementing
real-time monitoring systems, and fostering
transparent communication can enhance
supply chain resilience.
Key: Current/2030 RCP 2.6 2040-50 RCP 8.5
Drought stress
(prolongeddroughtperiods)
Period of abnormally dry weather sufficiently
prolonged for the lack of water to cause
serious hydrologic imbalances and regional
water scarcity.
Impact:
Minor Moderate High
Likelihood:
Unlikely Possible Likely
Business impact assessment
People:
• Impact on mental health.
• Worsens likelihood of heat stroke and threat
to life.
Physical assets (operations & suppliers):
• Resulting water stress and prolonged
impact on water utilities.
• Impact to water-intensive manufacturing
processes.
• Potable and process water supply
reduction/disruption could impact
manufacturing and commercial operations.
• High water costs and tariffs.
• Water usage restrictions.
• Water shortages for suppliers reliant on
water-intensive processes can disrupt
supply of raw materials and instrument
parts, this could also lead to higher cost of
those goods and potential delays in supply.
• Higher chances of ‘fire weather’.
• Disruption of inland water routes
transportation.
• Electricity utilities disruption where reliant
on hydropower.
Risk response: adaptation/
mitigation options
People:
• Awareness campaigns promote long-term
adaptation.
Physical assets (operations & suppliers):
• Water system audits, pipe repair and leak
maintenance.
• Explore options for water saving in the
manufacturing process.
• Incentivise and encourage water saving by
employees.
• Engage with water supply and disaster
management agencies on water resources
and droughts planning.
• Recycling and reusing water wherever
possible.
• Introduce grey/rainwater collection and
input to non-potable uses.
• Engage with suppliers expecting to see the
biggest changes and how water availability
might affect them.
• Diversify supplier base to mitigate
risks associated with a single supplier’s
water-related disruptions.
• Develop contingency plans that outline
steps to take during water scarcity events
to ensure continuity of operations.
• Maintain a good practice fire loss control
maintenance and mitigation regime.
Physical risks
11 12
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Strategy continued
Floods (inland flood,
storm surge andsea level rise)
Includes inland floods caused by heavy
precipitation (flash floods) and/or by river bank
overflow (riverine).
Coastal flooding caused by storms.
Sea level rise plays an important role on the
severity of storm surges.
Impact:
Minor Moderate High
Likelihood:
Unlikely Possible Likely
Business impact assessment
People:
• Long-term/temporary road and railroad
damage and closure.
• Traffic congestion and delays.
• Threat to life.
Physical assets (operations & suppliers):
• Factory and infrastructure damage.
• Damage to foundations and drainage
systems.
• Damage to main or backup utilities stored
in basements.
• Damage to contents including raw material
and equipment stored on ground and
basement level.
• Impact on utilities (water supply, energy
supply, telecoms/internet).
• Possible long disruptions for repairs or
installation of critical utilities.
• Impact on emergency services.
• Safe building access issues.
• Delays in supply chain and distribution.
Risk response: adaptation/
mitigation options
People:
• Train employees on flood response
protocols, evacuation procedures and
safety measures.
Physical assets (operations & suppliers):
• Risk transfer/insurance/captive/parametric
solutions.
• Deep dive (engineering) assessment for
high-risk assets to gauge the flood risk at
each site and recommend the most suitable
course of action.
• Review water ingress routes (including
drainage) with facility management and
local protection and/or elevation features
that could minimise the exposure.
• Prepare business continuity and emergency
response plans and create stress test ‘what
if’ scenarios.
• Consider temporary and portable flood
defence systems, investing in backup
utilities, door guards, etc.
• Elevate equipment on platforms if possible.
• Reduce critical equipment and operations in
basements.
• Review ponding areas on ground or at roof
level. Review and upgrade drainage system
capacity on ground and at roof.
• Fix leaking roofs.
• Plan for future possible extents of flooding
and build in physical protection.
• Engage with government agencies on
coastal protection measure and plans.
• Engage with suppliers currently at risk and
for those having future risk of flooding and
heavy precipitation, ensuring these events
are covered in their ERPs (Emergency
Response Planning) and BCPs (Business
Continuity Planning).
Key: Current/2030 RCP 2.6 2040-50 RCP 8.5
Windstorm (extratropical
cycloneand tropical cyclone)
Includes the wind-related impact of different
types of storms such as winter storms,
extratropical cyclones or hurricanes.
Impact:
Minor Moderate High
Likelihood:
Unlikely Possible Likely
Business impact assessment
People:
• Long-term/temporary road and railroad
damage and closure.
• Traffic congestion and delays.
• Threat to life.
Physical assets (operations & suppliers):
• High winds,storm surges and flooding can
all cause significant damage to buildings,
equipment and inventory.
• Damage to factory fabric including
claddings, roofs, windows and any external
gear attached to the building.
• Damage to building access points and
vehicles in open parking areas.
• Damage from flying debris.
• Power outages and transportation
disruptions can hinder daily operations.
• Possible long disruptions for repairs or
installation of critical utilities.
Risk response: adaptation/
mitigation options
People:
• Consider setting up a fully trained
Emergency Response Team, including
representatives with decision-making
authority as well as knowledge of the
facility and operations.
• Define actions for each warning level
issued by the responsible authority
(government/ met office) and the employees
responsible for implementing these actions,
as well as resources required.
Physical assets (operations & suppliers):
• Risk transfer/insurance/captive/parametric
solutions.
• Review exterior walls and doors by
inspecting if the building is well sealed to
prevent wind from getting in openings and
crevices, causing interior damage, also if
siding and windows are tightly attached.
• Review the roof strength and roof-wall
connections by inspecting if roof sheathing
is securely nailed down and HVAC units,
skylights and pipes are tightly affixed and
will not be blown off.
• Electrical supply to circuits or equipment
that could be flooded should be turned
off unless the equipment is designed and
required to operate when immersed.
• Inspect outdoor area by inspecting if
storage sheds (with equipment, inventory
and supplies) and outbuildings are securely
anchored.
• Survey external claddings/screens, attached
signs and others for durability and consider
removing debris from outdoor areas, to
prevent the risk of flying debris.
• Engage with suppliers and ensure they have
covered these events in ERPs and BCPs.
Physical risks continued
13 14
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McBride plc Annual Report and Accounts 2024
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Resilience of McBride’s strategy
toclimate risks
Low carbon world scenario
In a low carbon world (1.5°C) scenario,
McBride faces an overall medium residual
climate risk exposure, which is lower than
the overall gross risk scores, indicating that
current and planned mitigations promote
resilience of the strategy. TheCompany’s
risk profile is shaped by physical climate
risks as well as transition risks and
opportunities, with varying impacts across
its operations and portfolio. Physical
climaterisks could pose challenges to
McBride’s operations, with heat stress
being a primary concern. The 2023
Western Europe heatwave demonstrated
the potential for extreme weather events
to disrupt operations. Looking ahead,
the frequency and severity of heatwaves
and droughts are expected to increase.
Currently, drought stress minimally
affects McBride’s production sites, with
appropriate risk mitigation arrangements
already in place where relevant. Other
physical risks, which are projected to be
moderate compared to current levels, are
likely to be prevalent across the McBride
estate. McBride has implemented risk
management strategies for such future
risks. TheCompany’s property damage and
business interruption insurance helps to
mitigate potential financial losses from flood
and windstorm risks.
Transition risks also play a significant role in
McBride’s risk exposure:
• Pricing of greenhouse gas emissions,
though mitigated by science-based
targets.
• Increased raw material costs, partially
offset by various company actions.
• Changing customer demands, presenting
both risks and opportunities, especially in
the Powders division.
• Technology substitution for more
sustainable options and distribution
processes, offering moderate risks but
potential operational cost savings.
Over the short to medium term, McBride’s
exposure to transition risk is expected
to decrease due to effective mitigation
strategies and adaptation measures.
The Company also anticipates upside
opportunities, such as adopting sustainable
technologies and improving processes for
operational efficiencies. To enhance its
resilience, McBride is continuing to assess
and adapt its operations across all sites.
Key actions have been incorporated into
McBride’s strategy, risks and opportunities,
including:
1. Energy and emissions reduction:
• Blow-moulding process: This
energy-intensive process is a
significant area of focus for reducing
carbon emissions. McBride is investing
in energy-efficient technologies and
exploring alternative methods to
minimise environmental impact.
• Compaction: By concentrating
formulas across divisions and
optimising product compositions,
McBride aims to reduce emissions
from both manufacturing and
distribution processes. Compaction
also presents an opportunity for
operating expenditure savings through
optimised packaging and logistics.
2. Sustainable packaging:
• Transition from polyethylene
terephthalate (PET): McBride is
committed to moving away from
PET to more sustainable packaging
options. This transition is aligned with
consumer demands and regulatory
pressures, ensuring the business
remains competitive and compliant.
• Innovation and collaboration:
Partnering with third-party experts
and appliance manufacturers, McBride
is focused on developing innovative
packaging solutions that meet
sustainability criteria and consumer
preferences.
3. Market adaptation and investment:
• Adaptation to demand shifts: McBride
recognises the importance of staying
ahead of market trends, such as the
growing preference for compacted
products. Investments in new
technologies and production methods
are crucial to remain competitive and
meet evolving consumer demands.
• Future trends: Anticipating the rise
of self-dosing machines and other
disruptive technologies, McBride is
prepared to invest in research and
development to ensure its product
offerings remain relevant and
sustainable.
4. Risk management:
• Raw material shortages: As more
companies adopt sustainable
solutions, McBride is proactive in
securing its supply chain to mitigate
potential raw material shortages.
• Customer strategy: McBride’s strategy
includes engaging with major
customers to align on sustainability
goals and exploring opportunities
with smaller customers to diversify its
market base.
• Supply chain engagement: McBride is
committed to a supplier engagement
target for the next five years to
refine Scope 3 current estimates and
outlook, ultimately to manage cost
risk and reduce emissions across the
supply chain.
• Legislative compliance: McBride
continues to employ experts in
allareas of legislation that impact
the Company’s products and
operations, thereby ensuring all
current and emerging climate-related
legislativerequirements are
effectivelyaddressed.
Strategy continued
Climate-Related Financial Disclosures continued
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McBride plc Annual Report and Accounts 2024
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Resilience of McBride’s strategy
toclimate risks continued
Hot house world scenario
Under a hot house world (>4°C) scenario,
McBride was assessed to have similar
physical risk exposure for its 14 production
facilities, with heat stress exposure
expected to remain similar to current
climate conditions by 2040-50. Its strategy
is moderately resilient, as the Company
and its suppliers are likely to adapt to these
adverse climate conditions where relevant.
Over time, the heat stress exposures for the
wider portfolio of physical assets, including
warehouses and key suppliers, will likely
increase from 11% to 38% by 2040-50. This
increased exposure is expected to result in
higher operational costs, such as cooling
machinery and office spaces, as well as
possible increases in raw material costs.
However, the understanding of overall
resilience will be enhanced as work
continues on other sites. For example, by
2040-50, the drought hazard exposure
for the wider portfolio is expected to rise
from 4% to 39%, which could increase
operational costs and potentially impact
supply routes such as river shipping.
Additionally, river flood exposure and
heavy rainfall exposure could also rise,
although the associated financial impact
is anticipated to remain largely covered by
insurance. Further risk adaptation measures,
such as embedding ‘what if’ scenarios in
business continuity plans and implementing
physical adaptation measures, could protect
sites and infrastructure during any future
climateevents.
Overall, continued efforts at all sites
will provide a more comprehensive
understanding of McBride’s resilience
tothese climatic changes.
Key actions have been incorporated into
McBride’s strategy to address physical risk,
including:
• Site level engagement: A number of
measures listed in the tables above have
been identified to help manage risk
exposures within individual sites. This
is expected to be further developed
over a three-year cycle across the entire
McBride estate.
• Central capex decisions: McBride is
currently developing central processes
to ensure overall climate impact is being
considered on all capex submissions and
decisions across the Group.
No or little transition risk/opportunity is
expected under this scenario.
Strategy continued
Climate-Related Financial Disclosures continued
46
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Defining a process for climate risk identification and management
As detailed on pages 53 to 59, the Group has a rigorous process in place to report the organisation’s principal and emerging risks. Through this process, and as in 2023, climate change
and environmental concerns were identified as principal risks and assessed accordingly. Aspects of climate change risk are also captured in other principal risks, notably supply chain
resilience, changing market dynamics and increased regulatory focus. In addition, we built upon the initial climate risk and opportunity assessment that was carried out in 2022 with
third-party consultants, with a deeper dive into financial impact and residual risk assessment in 2024. The overall process used for identifying, assessing and managing CROs under
different climate scenarios is detailed in the graphic below.
Risk management
1. Define
climate
scenarios
2. Identify climate-related risks
to McBride under articulated
scenarios
3. Assess business
impacts to McBride
5. Perform detailed impact
assessment on selected CROs
4. Identify potential
responses
Transition risk
1.5°C
Physical risk
1.5°C and 4°C
Policy and legal
risks
Reputational risks
Acute physical
risk
Market risks
Technology risks
Chronic physical
risks
Impact on:
• Physical asset portfolio
• Input costs
• Operational costs
• Revenue
• Supply chain
• Business interruption
Impact on:
• Physical asset portfolio
• Input costs
• Operational costs
• Revenue
• Supply chain
• Business interruption
1
Pricing of GHG emissions
3
Mandates and regulation
4
 Increased cost of raw materials
5
 Change in consumer demands
7
 Substitution of existing tech to lower
emissionoptions
9
 Use of more sustainable and efficient
production and distribution processes
10
 Development of new products or
services through R&D and innovation
11
Heat stress (heatwaves)
12
 Drought stress (prolonged drought
period)
Responses might include:
• Changes to business model
• Portfolio mix
• Investments in capabilities
and technology
Responses might include:
• Changes to business model
• Portfolio mix
• Investments in capabilities
and technology
Climate-Related Financial Disclosures continued
47
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Defining a process for climate risk
identification and management
continued
Details of the articulated approach used
to assess climate-related physical and
transition risks and opportunities are
included on page 67 of our 2022 Annual
Report, supplementing our TCFD risk
assessment process for 2024. A list of
potential CROs that could impact McBride’s
business were identified in 2022 under
the two articulated scenarios. These were
refreshed and validated by management in
2024 based on likelihood and timeframe.
These were tracked and monitored for key
developments, financial impact assessment
and appropriate mitigating factors during
the year, as outlined in the Strategy section
above. In addition, during both 2023 and
2024, the key CROs were assessed via
workshops with a cross-functional set of
internal stakeholders and a focused set of
surveys and questionnaires. The process
identified the impact, likelihood and
mitigations for each CRO in the context
of an adapted set of McBride’s Enterprise
RiskManagement (ERM) impact and
likelihood scales.
Risk was assessed from a residual
perspective in 2024 (i.e. by factoring in
mitigation) by building upon the inherent
risk assessments for key CROs performed
last year. Going forward, the identification
and assessment of CROs will be refreshed
by McBride on an annual basis.
Integration of climate risk
management into McBride’s wider
riskmanagement
We continue to assess climate risk in 2024
against an adapted version of our ERM
scales. The adapted scales have allowed
for longer time horizons due to the nature
of climate risk and the assessment of
upside opportunities. Using aligned scales
has also enabled McBride to integrate
the assessment of its climate risks into its
corporate risk register. We have continued
to identify, assess and manage climate
risks through the existing risk management
process on an annual basis, adopting a
top-down risk management approach
whereby the risks associated with climate
are centrally monitored by the Risk Council
and the TCFD Working Group.
Risk management continued Metrics and targets
Details of the Group’s Scope 1, 2 and 3
carbon emissions for the financial year
ended 30 June 2024 are set out on page
26. This data has been provided as eleven
months actual and one month extrapolated.
Our Scope 1, 2 and 3 GHG emissions
have been calculated in accordance with
the relevant GHG Protocol Corporate
Accounting and Reporting Standards and
latest emissions factors from recognised
sources. The Group’s Scope 3 emission data
covers the following categories:
• purchased goods and services;
• upstream transportation and distribution;
• end-of-life treatment of sold products;
• downstream transportation and
distribution;
• capital goods;
• waste generated in operations;
• fuel and energy-related activities;
• employee commuting; and
• business travel.
These are the categories that are considered
most relevant to McBride. Emissions relating
to the use of sold products are considered
as indirect as they do not directly consume
energy and therefore are not required to be
disclosed.
We continue to engage with an external
partner to identify a heatmap of Scope
1, 2 and 3 GHG emissions sources, by
raw material/packaging category, which
continues to inform progress against our
Scope 1 and 2 science-based targets.
OurScope 3 emissions target is based on
a supplier engagement model and will be
fully embedded and reported from 2025
onwards.
The table on page 49 details the metrics
and targets (linked to the specific CROs
identified by the Company) that have
currently been defined and are being
monitored by McBride.
The CO
2
Scope 1 and 2 targets outlined in
the table on page 49 have been costed
in detail and the financial impacts have
been factored into our short-term financial
forecasts and plans. A number of the
targets in the table below conclude in
2025. McBride expects its ESG agenda and
targets will be refined and developed over
2025 and beyond, with new and updated
targets set. Where these are considered to
be financially significant, the impacts will be
identified and reflected in forward-looking
forecasts.
Climate-Related Financial Disclosures continued
48
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Metric
CO
2
Scope 1 and 2 emissions
Output volume per gigajoule
ofenergy
Use of FSC® certified board
Packaging recycling
Recycled plastic content
Flexible packaging
Microplastics
Target
Reduce Scope 1 and 2 by
54.6% by2033
15% improvements in
eco-efficiency by 2025
All paper and board sourced
will be FSC® compliant
by2025
All our packaging will be 100%
fully recyclable, compostable
or reusable by 2025
On average, all our packaging
will contain at least 50%
recycled content by 2025
We will exit all multi-layered
flexible packaging by 2025
We will remove all
REACH-defined microplastics
from our formulations by 2025
Performance
against target
See page 26
See page 27
See page 29
See page 29
See page 29
See page 29
See page 29
Link to
identified CRO
1

3

6

8

9

10

1

9

10

4

5

11

4

5

11

4

5

11

4

5

11

4

5

11

Metrics and targets continued
Focus for 2025
McBride will continue to build on the
progress achieved in 2024 in relation to
the refinement and introduction of new
metrics and targets. Our strategy outlines
our commitments to continue to reduce
carbon emissions by setting appropriate
science-based targets and continuing to have
these externally validated. For2025 ourfocus
will be on embedding and reporting our
Scope 3 carbon emissions target, which will
be based on a supplier engagement model,
emphasising the critical role that suppliers
play in our decarbonisation journey.
We also remain very aware of the impact
that climate change may have on us as an
organisation. The CRO identification process
is now an established tool for us to identify
the inherent and residual risks that McBride
faces. Our Scope 1, 2 and 3 targets, as well as
the technologies selected to achieve these,
continue to be pivotal in defining McBride’s
ultimate risk under a transitional climate
scenario. The outcomes of climate risk
assessment continue to be disseminated and
mitigation actions reviewed and progressed
by teams across the Company following
the standard Company agreed risk process.
In addition, we also intend to continue
the process of assessing and quantifying
long-term risks (i.e. physical risks) via a
site-by-site approach. This will ultimately
enable us to monitor and assess these risks
and allow for their effective communication
and mitigations at a Group level.
Climate-Related Financial Disclosures continued
49
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Location of TCFD-aligned disclosures within the Annual Report
Governance
Disclose the Group’s governance around climate-related risks and opportunities
a) Describe the Board’s oversight of climate-related risks and opportunities
b) Describe management’s role in identifying, assessing and managing climate-related risks and opportunities
Climate-Related Financial Disclosures
Audit and Risk Committee Report
See page(s)
36 to 37
80
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the Group’s business, strategy and financial
planning where material
a) Describe the climate-related risks and opportunities that the organisation has identified over the short, medium and long term
b) Describe the impact of climate-related risks and opportunities on the Group’s business, strategy and financial planning
c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C
orlower scenario
Climate-Related Financial Disclosures
Principal Risks and Uncertainties
See page(s)
38 to 46
57
Risk management
Disclose how the Group identifies, assesses and manages climate-related risks and opportunities
a) Describe the Group’s process for identifying and assessing climate-related risks and opportunities
b) Describe the Group’s process for managing climate-related risks and opportunities
c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall
risk management
Climate-Related Financial Disclosures
Principal Risks and Uncertainties
Audit and Risk Committee Report
See page(s)
47 to 48
57
80 to 82
Metrics and targets
Disclose the metrics and targets used to assess and manage climate-related risks and opportunities
a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk
management process
b) Disclose Scope 1, 2 and, if appropriate, Scope 3 GHG emissions, and the related risks
c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance againsttargets
Climate-Related Financial Disclosures
Sustainability
See page(s)
49
26 to 28
Climate-Related Financial Disclosures continued
50
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Understanding the impact of our activities with regard to specified non-financial matters
Non-Financial and Sustainability Information
Statement
In accordance with sections 414CA and 414CB of the Companies Act 2006, which outline requirements for non-financial reporting, the table below is intended to provide our stakeholders
with the content they need to understand our development, performance, position and the impact of our activities with regard to specified non-financial matters.
Reporting requirement and our material areas of impact
Relevant Group
principal risks
Relevant Group
policies/statements
Policy embedding, due diligence,
outcomes and KPIs – page reference
Environmental matters
Responsible approach to product design and production
Consumer and
customer trends
• Sustainability and the
EnvironmentPolicy
Pages 25 to 35
Employees
Responsible for the health and safety of our workforce
Legislation • Health and Safety Policy Pages 21 and 32
Social matters
Responsible approach to taxation
Financial risks • Preventing the Facilitation of Tax
Evasion Policy
• Tax Strategy Statement
• Business Ethics Policy
Pages 21 and 139 to 142
Respect for human rights, anti-bribery and corruption
Reinforcing an ethical business culture
Legislation • Business Ethics Policy
• Supplier Code of Conduct Policy
• Anti-Bribery and Corruption Policy
• Gifts and Hospitality Policy
• Conflicts of Interest Policy
• International Sanctions Policy
• Share Dealing Policy
• Data Protection Policy
• Policy on the use of independent
auditors for non-audit services
• Policy on the employment of former
employees of the auditors
• Whistleblowing Policy
• Anti-slavery and Human Trafficking
Statement
Page 35
51
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Non-Financial and Sustainability Information
Statement continued
Reporting requirement and our material areas of impact
Relevant Group
principal risks
Relevant Group
policies/statements
Policy embedding, due diligence,
outcomes and KPIs – page reference
Business model All risks n/a Pages 5 to 6
Non-financial KPIs n/a n/a Page 21
Description of principal risks anduncertainties n/a n/a Pages 53 to 59
Climate-related financial disclosures
• A description of the Company’s governance arrangements in relation to assessing and
managing climate-related risks and opportunities.
• A description of how the Company identifies, assesses and manages climate-related risks
and opportunities.
• A description of how processes for identifying, assessing and managing climate-related
risks are integrated into the Company’s overall risk management process.
• A description of:
(i) the principal climate-related risks and opportunities arising in connection with the
Company’s operations; and
(ii) the time periods by reference to which those risks and opportunities are assessed.
• A description of the actual and potential impacts of the principal climate-related risks
and opportunities on the Company’s business model and strategy.
• An analysis of the resilience of the Company’s business model and strategy, taking into
consideration different climate-related scenarios.
• A description of the targets used by the Company to manage climate-related risks and
to realise climate-related opportunities and of performance against those targets.
• A description of the KPIs used to assess progress against targets used to manage
climate-related risks and realise climate-related opportunities and of the calculations
onwhich those KPIs arebased.
Climate
change and
environmental
n/a
Pages 36 to 37
Pages 47 to 48
Pages 47 to 48
Pages 38 to 46
Pages 38 to 46
Pages 38 to 46
Pages 48 to 49 and pages 25 to 30
Pages 48 to 49 and pages 25 to 30
Understanding the impact of our activities with regard to specified non-financial matters continued
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Our risk management process
continues to be based on
an integrated and joined-up
approach to managing risk
across the Group. It involves
understanding, analysing and
addressing risk to enable the
business to achieve its overall
strategic and day-to-day
operational objectives,
delivering on its commitments
to all stakeholders.
The Group continues to operate under a
robust, well-established and externally
benchmarked risk management framework,
which is aligned to ISO 31000:2018, and
supported by a formally defined risk
taxonomy structure. The risk management
framework is also supported by a
comprehensive risk appetite framework to
help with the assessment, escalation and
reporting of principal risks. These activities
are performed by identifying and regularly
monitoring key risk indicators (KRIs) tracked
by senior business leaders on an ongoing
basis, from across the organisation.
Further detail on the risk management
process can be found on pages 80 to 82.
This process has allowed the Board to
identify those risks which are deemed
fundamental to the business as they
potentially threaten the achievement of the
Group’s strategic objectives and the delivery
of its key business priorities. These risks
are identified as ‘principal’ based on the
likelihood of occurrence and the potential
impact on the Group.
They have been consolidated by the Risk
Council and reviewed and agreed with the
Board (having been considered by the
Group Executive Committee and the Audit
and Risk Committee). It should be noted
that these principal risks and uncertainties
in many instances also offer potential
opportunities for the business to harness
benefits from.
The principal risks and uncertainties to
which the Group is exposed are summarised
on pages 54 to 59, outlining the risk
impact, key mitigating actions and any key
developments during the year. The risk
trend over the year is also noted, showing
any changes in the risk profile compared
to the prior year. The Group continues to
review its overall risk framework within
the context of further geopolitical and
macroeconomic uncertainty and the
instability being experienced globally this
year, which continues to test the resilience
of our supply chains, as well as impacting
an ever shifting and evolving set of market,
customer and consumer dynamics.
The business has also been faced with a
complex and evolving set of legislative
requirements across individual jurisdictions,
which need to be continually monitored and
acted upon. There remains a heightened
focus on managing the risks associated
with cyber threats and potential security
breaches relating to sensitive business data,
climate and environmental considerations
from both consumers and governments
and financing risks affecting liquidity and
funding considerations, although the overall
risk profile in each of these instances is
being actively managed by a number of
mitigation strategies currently in place.
The business continues to prioritise the
need to attract and retain talent within the
organisation, whilst ensuring health and
safety considerations and product quality
remain fundamental areas of focus for
theGroup.
In addition, a structured Transformation programme underpins our overall business strategy,
to drive improvements in business performance, efficiency and the operating model.
Whilst this risk has previously been managed in our operational risk registers, this has been
elevated as a principal risk in 2024, reflecting the focus on continuing improvements within
this area.
Likelihood
Rare Unlikely Possible Likely Almost certain
Impact
Minimal Minor Moderate Major Catastrophic
1
 Changing market, customer
and consumer dynamics
2
 Disruption to systems
andprocesses
3
 Financing risk
4
 Supply chain resilience
5
 Safe and high-quality
products
6
 Health and safety
7
 Climate change and
environmental concerns
8
 Challenges in attracting
andretaining talent
9
 Increased regulation
10
 Economic, political and
macro environment
instability
11
 Business transformation
challenges
Our Principal Risks and Uncertainties
1
2
3
4
5
6
7 8
9
10
11
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The set of principal risks and uncertainties
provided on the following pages is not
intended to be an exhaustive list. Additional
risks not presently known to management,
or risks currently deemed to be less
material/strategically important, may also
have the potential to cause an adverse
impact on our business.
The Board continues to have confidence
in the ongoing risk horizon scanning and
monitoring activities, embedded within
the Group’s risk management processes,
to provide early notification of emerging,
strategically important and potentially
significant risks on a regular basis.
Changing market, customer
andconsumer dynamics
Risk trend/change:
Risk appetite rating: Moderate to high
Averse Low Moderate High Very High
How it links to our strategy:
 
1
Key:
Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk
Risk impact
• Whilst consumers’ available income
remains limited, branders may target
innovation as a route to regaining
some of the lost volume.
• International retailers face pressure
to be consumer ‘Champions’, driving
the pricing agenda at the expense of
wider value-added offerings.
• Despite an increasingly fragile
competitor set, retailers demand high
levels of CSL, with failure impacting
our reputation and sales performance.
• Increased focus on innovation could
reduce the time and resource available
for value engineering initiatives.
• A heightened sustainability and
regulatory focused environment could
add costs that are difficult to recover.
Mitigation
• Investment in skills and tools and
increased knowledge of our markets
supports our commercial teams’
ability to demonstrate the true value
added by our offering.
• An agile approach to portfolio
management allows rapid response to
changes in consumer behaviour.
• Our rolling five-year strategic plan
reviewed on an annual basis balances
capital allocation between new initiatives
and existing business.
• A continued strengthening of
partnerships with key retailers highlights
the value added by McBride and avoids
one-dimensional discussions solely
focused on price.
• Continued exploration of contract
manufacturing activities with branders
dilutes potential private label risk.
Key developments
• A centralised approach to market data
and insights provides visibility of trends
and developments across our markets,
allowing focused decision making.
• The ESG Group continues to progress,
measuring our environmental impact by
setting appropriate targets supporting
ongoing business growth.
• Continue demonstrating high levels
of resilience and agility in supporting
retailers who have suffered disruptions
in supply linked to competitors’ financial
and operational difficulties.
• A widened supplier network ensures
reliable supply at highly competitive
price levels.
• Clear cost-saving targets exist, enabled
by continued investment in business
processes.
Our Principal Risks and Uncertainties continued
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Key: Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk
Disruption to systems
and processes
Risk trend/change:
Risk appetite rating: Low
Averse Low Moderate High Very High
How it links to our strategy:
 
2
Risk impact
• Loss of key and sensitive business
data due to security breaches, auto
software updates, external hacking
and/or cyber attacks.
• Increased legislation (NIS2) exposes
the organisation to regulatory fines in
cyber security.
• Increased use of artificial intelligence
tools internally exposes a risk of data
leakage.
• Outdated technologies with
weak IT General Controls (ITGCs),
potentially leading to a higher risk of
cyber-attack, loss of key data and an
inability to harness digitalisation.
• Failure to implement a new ERP
system would disrupt our operations
and our ability to serve customers.
Mitigation
• We continually invest in security
policies, controls and technologies to
protect commercial and sensitive data.
• We monitor developments in cyber
security, which includes engaging
with third-party penetration
testers and other specialists where
appropriate.
• Ongoing hardware and software
refreshes and upgrade programmes
are conducted.
• Business systems roadmaps are
updated to ensure relevance
including core ERP.
• Strong programme governance
is in place for major ERP
implementations.
Key developments
• Annual external vulnerability testing
and third-party risk assessments
are undertaken, with underlying
improved cyber resilience.
• Security KRIs are in place to
monitor progress and drive
appropriate action, where
necessary, with the overall roadmap
updated.
• Critical infrastructure is upgraded,
ensuring the correct patch levels
are applied.
• We are moving critical systems
away from our sites into an external
cloud infrastructure.
• An annual review of disaster
recovery processes for all
business-critical systems has been
undertaken, ensuring relevant
backup and recovery plans are
inplace.
• IT strategy continues to be updated
in line with Group strategy.
Financing risks
Risk trend/change:
Risk appetite rating: Low
Averse Low Moderate High Very High
How it links to our strategy:

3
Risk impact
• Financing risk covers the risk of a
deterioration in profitability and its
knock-on/resultant potential negative
impact upon liquidity.
• In 2022, an inability to offset in a
timely manner the significant input
cost inflation by raising prices had
resulted in a deterioration of the
Group’s profitability and liquidity.
• Not achieving the required levels of
profitability and cash flows increases
the risk that banking facilities may be
withdrawn due to breach of banking
covenants.
Mitigation
• We have a robust and reliable input
cost forecasting process designed to
equip the Group with forward visibility
of both the direction and magnitude
of input cost evolution.
• Divisional Managing Directors are
accountable for maintaining gross
margins through cost saving product
redesigns and/or cost price increases
agreed with customers.
• A comprehensive governance process
of divisional performance reviews is in
place to monitor actual performance
versus pricing and financial targets.
Thisincludes the Executive Committee’s
weekly review of key operational and
financial performance metrics, meaning
that risks can be identified and mitigating
actions agreed in a timely manner.
• A 13-week cash, debt and liquidity
forecast is performed each week to
highlight any risks and allow effective
liquidity management.
Key developments
• The strong financial performance in
2024, driven by sales volume increases,
continued focus on cash management,
and the extension of invoice discounting
facilities to unencumbered sales ledgers,
has continued to drive improved
liquidity. At 30 June 2024, liquidity
of £98.3 million is significantly above
the £15.0 million minimum liquidity
covenant required by the lender group.
The Group is meeting normal banking
covenant requirements, ahead of testing
recommencing in September 2024.
Our Principal Risks and Uncertainties continued
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Key: Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk
Supply chain resilience
Risk trend/change:
Risk appetite rating: Moderate
Averse Low Moderate High Very High
How it links to our strategy:

4
Risk impact
• Global supply chains remain
susceptible to sudden changes in
supply and demand, with the resultant
volatility creating potential uncertainty
over forward input price inflation.
• The continued trend of some
customers for an increasingly
transactional relationship could lead to
prolonged discussions around pricing
adjustments and have a substantive
impact on Group profitability.
• Any over-reliance on any single
supplier could pose a significant
business interruption risk to
theGroup.
Mitigation
• The Group Purchasing function is
adequately resourced with high levels
of market and industry knowledge,
ensuring the ability to spot market
trends and developments.
• Strong, established and highly
effective supplier relationships
allow McBride to leverage scale
whilst securing prioritisation in
times of material shortages.
• A robust, reliable and effective
input cost forecasting process
provides forward visibility of the
direction and magnitude of input
cost evolution.
• The Commercial Excellence
programme has been designed
to equip our commercial teams
with the tools required to ensure
our customer account plans allow
timely, appropriate and effective
engagement with customers on
commercial topics.
• We continue to apply a robust
and effective risk management
approach to identify supply risks
and drive corrective actions.
Key developments
• We have increased access to
market intelligence and data,
coupled with a clearly defined
training pipeline.
• An effective and embedded
monthly forecasting cycle provides
ongoing insights over differing time
horizons.
• Embedded KRIs allow us to monitor
progress and drive appropriate
actions.
• We have an appropriate focus
on contractual cover, with close
alignment between the Group
Purchasing, Commercial and
Legalfunctions.
Safe and high-quality products
Risk trend/change:
Risk appetite rating: Averse
Averse Low Moderate High Very High
How it links to our strategy:

5
Risk impact
• Issues with quality or safety of
products could lead to reputational
damage with customers, consumers
orregulators.
• Potential financial losses could arise
due to a need to recall products,
disruptions in supply, delays to launch
or fines imposed on the Company
Mitigation
• Our product quality processes and
controls are comprehensive, verified
annually and monitored for continuous
improvement.
• Raw materials are approved against
our standards and material quality is
regularly monitored.
• In the event of a safety or quality
incident, processes are in place to make
sure that the right experts take prompt
and effective action.
• Our labelling processes comply with all
applicable regulations and are kept up to
date with all regulatory changes.
• We engage with regulators and industry
groups to stay updated on emerging
safety and regulatory concerns.
Key developments
• All annual reviews of processes and
controls are completed.
• Raw material and fragrance policies
have been updated in line with all newly
identified requirements.
• We continue to participate in all relevant
trade associations and taskforces.
• Our product compliance processes have
successfully passed both external and
internal audits.
Our Principal Risks and Uncertainties continued
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Key: Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk
Health and safety
Risk trend/change:
Risk appetite rating: Averse
Averse Low Moderate High Very High
How it links to our strategy:

6
Risk impact
• Insufficient assessment of hazardous
tasks, activities and specialised areas,
coupled with differing standards in
key elements of Health, Safety and
Environment (HSE) could result
in the risk of injury, ill health or
environmental incidents.
• An insufficient ‘Training Needs
Analysis’ could lead to an inconsistent
approach to training, ultimately
affecting the HSE performance of
ourteams.
Mitigation
• The Group Health and Safety
Lead reports directly into the
CEO, supported by dedicated HSE
professionals at each site.
• The health and safety governance
framework oversees the development
and implementation of continual
improvement initiatives.
• Developing a standard Group health
and safety proforma provides a more
robust risk assessment of general
tasks and activities.
• Defined Group standards help to
establish minimum requirements
for key elements of HSE.
• A Root Cause Analysis review
process helps to drive alignment
on identified issues and corrective
actions to support continual
improvement.
Key developments
• An HSE resource has been
appointed to develop Group
standards for key elements
of health and safety, defining
minimum requirements subject to
local legislation.
• Additional leading indicators
have been implemented to drive
a more proactive approach, e.g.
dynamic risk assessment, quick risk
prediction, etc.
• A leading HSE software tool has
been implemented to provide
greater visibility, analysis and
management of incidents and
corrective actions to further
enhance Group-wide HSE
performance.
• A health and safety cultural
survey has identified individual
and Group-wide beliefs, values,
attitudes and perceptions
regarding health and safety, with
defined action plans for areas of
improvement.
Climate change and
environmentalconcerns
Risk trend/change:
Risk appetite rating: Low
Averse Low Moderate High Very High
How it links to our strategy:

7
Risk impact
• Government actions to mitigate
climate change may increase costs or
limit operational flexibility.
• Failing to adapt our business models
and strategies to the sustainability
concerns of customers and consumers
could reduce our ability to continue
to produce and deliver appropriate
goods and services. The increased
incidence of extreme weather events
could impact our ability to sustainably
source essential components for our
products and services, potentially
leading to supply disruptions.
Mitigation
• We remain focused on our
preparedness for both supply chain
disruptions (e.g. through flexible
sourcing policies in place) and the
ongoing reduction of our operational
carbon footprint, aligned to our
customers’ needs and objectives
(measured via appropriate metrics
and validated targets).
• An annual measurement of our corporate
carbon footprint and creation of a
carbon heat map has been developed
with external consultants.
• Our focused cross-functional ESG forum
continues to lead the Group’s ESG
activities.
Key developments
• Validation of the existing CROs,
previously assessed in 2022, was
conducted by key business stakeholders
during 2024.
• We have started a rolling programme
of physical climate risk assessments
at specific sites during 2024, to be
completed on a triennial basis across the
whole Group.
• Our GHG emissions reduction target has
been set at 58.9% by 2033.
• We have established a supplier
engagement programme to support our
Scope 3 emissions ready for delivery
during 2024-2025. We have completed
our Carbon Disclosure Project (CDP)
disclosure requirement on climate action
for this year.
Our Principal Risks and Uncertainties continued
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Key: Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk
Challenges in attracting
andretaining talent
Risk trend/change:
Risk appetite rating: Low
Averse Low Moderate High Very High
How it links to our strategy:
8
Risk impact
• Our ability to attract, develop and
retain a diverse workforce with a
wide range of skills is critical for the
effective delivery of our strategies.
• The loss of talented colleagues and
the inability to effectively replace
them could make it difficult to manage
the business, adversely affecting
operations and financial results.
• Market competition for key leadership
and talent remains strong.
Mitigation
• People performance, potential and
succession management is formally
reviewed each year. Clear action plans
are developed to address key risks.
• The Executive Committee frequently
discuss talent and retention with
regular Board oversight.
• Our Remuneration Committee agrees
the objectives and remuneration
arrangements for senior leaders.
• We regularly review our ways
of working to drive speed and
simplicity through our business
and to motivate, retain and attract
talent, allowing us to remain agile
and responsive to market trends.
Key developments
• Our Human Capital Management
(HCM) system is now embedded
within the business, helping
us to run a full talent cycle
annually, enabling us to better
determine, report and act on
colleagues’ performance and
potential to enhance retention
of key colleagues. Actions have
been taken to ensure that staff
remuneration remains competitive
within each local market.
• We continued to build on our
wellbeing initiatives, including
delivering Diversity, Equity and
Inclusion awareness training for all
senior leaders.
• We launched a new Group-wide
employee survey in December
2023 to understand and develop
employee engagement levels,
especially around why colleagues
enjoy working at McBride and
what can be done to enhance
engagement. We will continue to
regularly survey colleagues using
our new survey tool.
Increased regulation
Risk trend/change:
Risk appetite rating: Low
Averse Low Moderate High Very High
How it links to our strategy:

9
Risk impact
• Non-compliance with relevant laws
and regulations could expose McBride
and our customers to civil and criminal
actions and reputational damage.
• Changes to and introduction of
additional laws and regulations also
have a material impact on the cost of
doing business via increased reporting
and complex evolving compliance
needs.
Mitigation
• Our continued focus on product
compliance processes and controls
is regularly monitored to drive
improvement.
• Communication with employees
ensures that compliance is embedded
within key roles.
• Our Supplier Code of Conduct sets
out our expectations from all raw
material suppliers from an ESG
perspective, with suppliers required to
verify compliance to relevant legal and
safety requirements.
• Legal and regulatory specialists continue
to monitor the relevant legislative
framework that McBride operates under,
with external legal guidance sought
where appropriate.
• McBride is an active member of relevant
trade associations and industry bodies.
Key developments
• There have been continual improvements
of monitoring and oversight systems,
processes and activities to respond
to increased emerging regulatory
compliance and reporting obligations.
• We continue to use a range of
digital tools to check compliance of
formulations against legal and McBride
policy requirements.
• Chemicals and packaging legislation
road maps are available to the business
showing new and updated legislative files
that will impact McBride.
• Current legislative focus is on the
implementation of the new extended
allergen labelling, a requirement which
stems from the Detergent Regulation.
Our Principal Risks and Uncertainties continued
58
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Key: Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk
Economic, political and
macroenvironment instability
Risk trend/change:
Risk appetite rating: Moderate to high
Averse Low Moderate High Very High
How it links to our strategy:

10
Risk impact
• Failure to react quickly to rapidly
changing geopolitical landscapes may
impact our freedom to operate in
specific markets, adversely impacting
financial performance.
• General economic and geopolitical
climate, disposable income, changing
demographics and buying patterns
could all impact consumer spending.
• Prolonged uncertainty triggered by
the Russian invasion of Ukraine and
the Israel–Palestine conflict provides
significant inflationary pressures,
withthe potential to affect global
supply chains.
• Disruption could be caused by
sanctions linked to geopolitical events,
or the failure to respond or react to
sanctions on a timely basis.
Mitigation
• Cross-functional steering groups
manage acute issues, including inflation
and other supply chain considerations.
• Robust sourcing strategies are
supported by centrally administered
currency and interest rate hedging.
• Specific pricing agreements have
been implemented with a range of
suppliers, designed to reduce input
cost volatility.
• There is a proven record of being
able to pass on inflationary costs
through increased pricing.
• Our established forecasting and
planning processes provide early
visibility of significant changes in
consumer demand patterns.
• Our Group-wide Sanctions Policy
and risk-based process ensure
compliance with international
sanctions measures applicable
toour business.
Key developments
• The risk profile increased this year,
primarily due to ongoing political
and macroeconomic developments.
• Our improved forecasting and
planning capabilities help us to
better assess and respond to
long-term opportunities and risks.
• McBride has taken a commercial
decision not to trade with any
countries subject to comprehensive
sanctions programmes, or with any
entity or individual that is located,
incorporated or ordinarily resident
in any of these locations. In relation
to other countries subject to less
restrictive programmes, we risk
assess and perform adequate
due diligence on our business
partners and the final destination
of our products when establishing
or reviewing trade relationships
to ensure that we do not trade
with listed sanctions targets or
otherwise engage in activities
that are prohibited under relevant
sanctionsmeasures.
Business transformation
challenges
Risk trend/change:
Risk appetite rating: Low
Averse Low Moderate High Very High
How it links to our strategy:
 
11
Risk impact
• Our business strategy is underpinned
by a Transformation programme
which seeks to improve our business
performance and efficiency through
structured process and systems
re-engineering designed to simplify
and strengthen our operating model.
• The multi-year deployment of a new
business-wide ERP system is a core
element of our programme which
carries a significant risk of business
disruption.
• Failure to execute and deliver the
Transformation programme effectively
may adversely impact the delivery of
benefits and our potential returns to
shareholders.
Mitigation
• Our fully resourced, dedicated,
inter-disciplinary transformational
team ensures that progress on our
transformation commitments is
monitored on an ongoing basis.
• A dedicated Change Panel has been
in place for over a year, responsible
for oversight and stewardship of the
Transformation programme.
• Steering Committees with ExCo sponsors
and dedicated Project Managers are in
place for individual functional projects.
• A robust governance plan and detailed
roadmap has already been agreed and
developed on our multi-year ERP system
deployment. This is continuously being
tracked, monitored and refined to ensure
on time and on budget delivery.
Key developments
• We have recently appointed an interim
Programme Director to lead our overall
Transformation programme, driving
an appropriate and consistent level of
programme oversight and governance,
whilst helping to facilitate effective
change management across the Group.
• Appropriate and independent finance
resource and support is provided to
each project within the Transformation
programme.
• Our dedicated team of Business Process
Owners supported by a wider network
of Subject Matter Experts provide the
necessary expertise and knowledge
to effectively re-engineer and simplify
activities in each project area.
• McBride has appointed an independent
external partner to provide ongoing
and independent monitoring and
assurance on key areas of the Group’s
transformation strategy.
Our Principal Risks and Uncertainties continued
59
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
In accordance with the UK Corporate
Governance Code 2018, the Board has taken
into consideration the Group’s principal
risks and uncertainties when determining
whether to adopt the going concern basis
of accounting and when assessing the
prospects for the Group when preparing its
viability statement.
Going concern statement
The Group’s business activities, together
with the factors likely to affect its future
development, performance and position,
are set out in the Strategic Report. The
financial position of the Group, its cash
flows, liquidity position and borrowing
facilities are described in the CFO’s Report
on pages 18 to 20. In addition, notes 20 and
21 to the consolidated financial statements
include the Group’s objectives, policies
and processes for managing its capital;
its financial risk management objectives;
details of its financial instruments and
hedging activities; and its exposures to
credit and liquidity risks. The Group meets
its funding requirements through internal
cash generation and bank credit facilities.
At30 June 2024, liquidity, as defined
in note 2 to the consolidated financial
statements, amounted to £98.3 million.
The Group’s base case forecasts are
based on the Board-approved budget and
three-year plan. They indicate sufficient
liquidity, debt cover and interest cover
throughout the going concern review period
to ensure compliance with current banking
covenants. The Group’s base case scenario
assumes:
• revenue growth of c.4% per annum,
driven predominantly by volume
increases;
• raw material prices stabilising after the
exceptional levels of input cost inflation
seen in the previous two years;
• interest rates reducing in line with current
market expectations; and
• a Sterling to Euro exchange rate of
£1:€1.15.
The Directors have considered the Group’s
principal risks with the highest likelihood
of occurrence or the severest impact, and
the adverse effect this would have on
the Group’s financial forecasts. Changing
market, customer and consumer dynamics
could adversely impact revenue growth.
Lack of supply chain resilience influences
raw material and packaging input costs.
Economic, political and macro environment
instability potentially affects both revenue
growth and input costs, in addition to
market interest rates and foreign exchange
rates. Considering these risks, together
with the risk that the Group’s credit
facility is reduced as part of the upcoming
refinancing project, a severe but plausible
downside scenario to stress test the Group’s
financial forecasts has been modelled, with
the following assumptions:
• no revenue growth in 2025;
• revenue growth reducing to 1% in 2026,
being half of the Group’s long-term
target of 2%;
• an increase in raw material and
packaging input costs compared to latest
forecasts;
• interest rates increasing by 100 basis
points;
• Sterling appreciating significantly against
the Euro to £1:€1.25; and
• credit facility reducing from €175 million
to €150 million.
In the event that such a severe but plausible
downside risk scenario occurs, the Group
would remain compliant with current
banking covenants.
After reviewing the current liquidity
position, financial forecasts, stress
testing of potential risks and considering
the uncertainties described above,
and based on the currently committed
funding facilities, the Directors have a
reasonable expectation that the Group
has sufficient resources to continue
in operational existence and without
significant curtailment of operations for
the foreseeable future. For these reasons
the Directors continue to adopt the going
concern basis of accounting in preparing
the Group financial statements.
Viability statement
In accordance with the requirements of
the UK Corporate Governance Code 2018,
the Directors have performed a robust
assessment of the principal risks facing the
Group, including those that would threaten
its business model, future performance,
solvency or liquidity. The Board has
determined that a three-year period to
30June 2027 constitutes an appropriate
period over which to provide its viability
statement. The strategic plan under our
Compass strategy is based on detailed
action plans developed by the Group with
specific initiatives and accountabilities;
there is inherently less certainty in the
projections for years four and five.
The Group has a €175 million multi-currency,
sustainability-linked RCF, with a tenor to
May 2026, as well as a number of facilities
whereby it could borrow against certain
of its trade receivables: in the UK a £20
million facility, committed until May 2026;
inGermany and Denmark a €45 million
facility, committed until May 2026; and in
France, Belgium and Spain an unlimited
facility committed until May 2026. The
Group can borrow from the provider of
the relevant facility up to the lower of the
facility limit and the value of the qualifying
receivables.
The Group’s strategic plan assumes that
financing facilities will be available on an
appropriate basis and as required to meet
the Group’s capital investment and growth
strategies for the entire viability period.
In assessing the Group’s viability, the
Directors have considered the current
financial position of the Group and its
principal risks and uncertainties. The
analysis considers a severe but plausible
downside scenario, featuring the principal
risks from a financial and operational
perspective, with the resulting impact on
key metrics, such as debt headroom and
covenants. The downside risk scenario
assumes sensitivity around exchange rates
and interest rates, along with significant
reductions in revenue and cash flow over
the three-year period. The Group’s global
footprint, product diversification and access
to external financing all provide resilience
against these factors and the other principal
risks to which the Group is exposed.
Whilst the Group ends the year with
net current liabilities of £26.0 million
(2023:£11.9m), the Directors conclude that
the Group has access to sufficient financing
facilities in order to support this position.
After conducting their viability review,
the Directors confirm that they have a
reasonable expectation that the Group
will be able to continue in operation and
meet its liabilities as they fall due over the
three-year period of their assessment to
30June 2027.
Going Concern and Viability Statement
The Strategic Report was approved by
the Board on 16 September 2024 and
signed on its behalf by:
Chris Smith
Chief Executive Officer
60
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional InformationFinancial Statements
Dividend
The Board is not recommending a final
dividend for the year ended 30 June 2024.
As stated in the 2023 Annual Report,
future dividends will be final dividends
paid annually in cash, not by the allotment
and issue of non-cumulative redeemable
preference shares (‘B Shares’).
As outlined in the RNS dated
29September2022, under the Company’s
€175 million RCF as amended, the Company
is not permitted to redeem or repay any
of its share capital. This restriction remains
in place until either the current RCF
matures in May 2026 or it is superseded
by a new financing agreement. As a result,
no redemption of existing B Shares is
permitted at the present time. Once this
restriction is lifted, B Shares will continue
to be redeemable but limited to one
redemption date per annum, in November
of each year.
S172 of the Companies Act 2006
Stakeholder interests are at the heart of
every strategic and operational decision
taken by the Board. Our focus on
discharging our responsibilities to promote
the success of the Company in accordance
with section 172 of the Companies Act
2006, and the impact our decisions will
have on our stakeholder groups, is at the
forefront of our minds at each and every
Board and Committee meeting.
Further information on our stakeholders,
how we have considered them in decisions
during the year and our engagement with
these stakeholders is set out on pages
22to24.
Board effectiveness
As Chairman, I am responsible for
ensuring we continue to have an effective
and functioning Board. We review our
effectiveness as a Board on an annual basis,
including an assessment of its Committees.
The internally led Board performance
review undertaken in May 2024 gave us
the opportunity to reflect on our own
performance and consider areas of focus
which will drive improvement and positive
change over the coming years. Further
details of the Board performance review
can be found in the Nomination Committee
Report on pages 73 and 74.
I will continue to work with my fellow
Directors and with the Company Secretary
to seek enhancements to the effectiveness
of the Board and our Board Committees
and create further focus on those areas
that the Board believes will make the most
impact in achieving long-term sustainable
success for the business.
Annual General Meeting (AGM)
The 2024 AGM will be held at Arbeta,
11Northampton Road, Manchester M40 5BP
on 12 November 2024 at 2.00pm.
Each ordinary share of the Company
carries one vote at General Meetings of
the Company. Any ordinary shares held
in treasury and the B Shares have no
votingrights.
A shareholder entitled to attend, speak and
vote at a General Meeting may exercise
their right to vote in person, by proxy,
or in relation to corporate members, by
corporate representatives. To be valid,
notification of the appointment of a proxy
must be received not less than 48 hours
(excluding non-working days) before the
General Meeting at which the person named
in the proxy notice proposes to vote.
The Board would like to thank our
colleagues, suppliers, investors, lender
group and customers for their continued
support. I believe that your Board
has the right balance of skills and
expertise to continue to support and
challenge management as we move
forward in embedding our Compass
andtransformation strategies.
Jeff Nodland
Chairman
Chairman’s Introduction to Governance Report
The Board was pleased with the Group’s performance in 2024 as
it executed its strategy successfully and delivered record results.
The Board’s focus in the year ahead will be to ensure the Group
builds upon those successes and, in doing so, delivers further
value for its shareholders.
Jeff Nodland
Chairman
Dear shareholder
On behalf of the Board, I am pleased to
present this year’s Governance Report and
the audited consolidated and Company
Financial Statements for the year ended
30June 2024, and to update you on the
work of the Board and its Committees and
how we have discharged our responsibilities
during this financial year.
Board leadership
As Chairman, I am responsible for
leading and ensuring an effective Board.
Pleasingly, this year has seen the Group
deliver successfully upon its strategy and,
as a result, the Group’s performance has
improved significantly. In the year ahead,
the Board will be focused on building
upon the foundations laid this year and,
in doing so, we hope to deliver for our
stakeholders and to create further value
for our shareholders. I would like again to
pay tribute to my Board colleagues for
their dedication and outstanding support
throughout the year.
Governance
The application of the Principles of
the Code is evidenced throughout this
AnnualReport.
We are accountable to all of our
stakeholders for ensuring that governance
processes are in place and we are fully
committed to meeting the standards of
the 2018 Code as far as it applies to a FTSE
SmallCap company. The table on page
64 provides details of our compliance
with the 2018 Code for the financial year
under review. We are also reviewing and,
where necessary, revising our corporate
governance processes to ensure that we are
able to comply with the 2024 UK Corporate
Governance Code when it begins to apply
to McBride from 1 July 2025.
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A
Audit and Risk Committee 
N
Nomination Committee 
R
Remuneration Committee  Chair
Our Board
Jeff Nodland
Chairman
Appointed to the Board:
26 June 2019
Skills and experience:
Jeff has significant experience in consumer chemicals manufacturing
businesses, including both private label and contract manufacturing
activities.
He was most recently President and CEO of KIK Custom Products,
one of North America’s largest independent manufacturers of
consumer-packaged goods (including branded and private label
products), retiring in February 2019 after 11 years in the role.
During that time Jeff led the financial turnaround and growth of the
business, both organically and via acquisition.
Previously, Jeff held executive positions at specialty chemical
businesses including Hexion Speciality Chemicals, Inc., McWhorter
Technologies and The Valspar Corporation, with responsibility for
activities at a number of chemical plants in Europe. In addition, Jeff
was previously a Non-Executive Director of Pioneer Recycling Inc.
Other roles:
Independent Non-Executive Director of EcoSynthetix Inc., Partner
of Brenton Point Capital Partners and Board member of Trademark
Cosmetics Inc.
Appointed to the Board:
7 January 2015
Skills and experience:
Chris joined the Company in 2015 as Chief Financial Officer. During
the period 22July2019 to 1 November 2019 he held the position of
Interim Chief Executive Officer and on 11June2020 he was appointed
to the role of Chief Executive Officer.
Chris’s career spans over 30 years working in listed manufacturing
businesses in highly competitive global industries. He brings extensive
experience of international leadership in multi-site and multi-country
organisations, covering mostly the UK, Europe and Asia Pacific.
From 2008 to 2014, Chris was Group Finance Director at API
Group plc, the AIM-listed specialty metallic film, foil and laminates
producer. Other previous roles have included Scapa plc, where he
was Finance and IT Director for Europe and Asia, and also a number
of senior finance roles at Courtaulds plc, where he gained extensive
international experience, including overseas positions based in
Germany and Hong Kong.
Appointed to the Board:
4 January 2021
Skills and experience:
Mark has operated at the C-Suitelevel for more than 25years,
possessing extensive and hands-on finance experienceacross
chemicals, logistics, retail/own label food businesses, B2B/B2C
services, insurance and financial services.
More recently, Mark has been involved in a number of business
turnarounds/transformations and has delivered a number of
successful private equity exits (having worked with CBPE, Apollo and
Promethean). Immediately prior to joining McBride, he was Interim
Chief Financial Officer at The AA plc.
Mark has an MBA from Manchester Business School and is a Fellow
member of CIMA.
Chris Smith
Chief Executive Officer
Mark Strickland
Chief Financial Officer
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McBride plc Annual Report and Accounts 2024
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Governance Report Additional InformationFinancial Statements
A
Audit and Risk Committee 
N
Nomination Committee 
R
Remuneration Committee  Chair
Our Board continued
Elizabeth McMeikan
Senior Independent Non-Executive Director
Alastair Murray
Independent Non-Executive Director
Regi Aalstad
Independent Non-Executive Director (and Designated
Non-Executive Director for Employee Engagement)
Appointed to the Board:
14 November 2019
Skills and experience:
Elizabeth has extensive experience within the consumer goods and
retail sectors, including senior management roles in operations and
marketing at Colgate Palmolive and Tesco. This, combined with her
strong non-executive experience, makes her a valued member of
theBoard.
Her past appointments include Senior Independent Director and
Remuneration Committee Chair of Unite Group plc, Senior Independent
Director at J.D. Wetherspoon plc and Senior Independent Director and
Remuneration Committee Chair at Flybe plc.
Other roles:
Non-Executive Chair of Nichols plc, Senior Independent Director and
Remuneration Committee Chair at Dalata Hotel Group plc, Senior
Independent Director at Custodian Property Income REIT plc and
Non-Executive Director and Chair of the Audit Committee of Fresca
Group Ltd.
Appointed to the Board:
2 August 2021
Skills and experience:
Alastair, a chartered management accountant, brings a strong financial
background, having operated as Chief Financial Officer of Premier
Foods plc until August 2019. He has recent and relevant financial
experience across a number of listed companies, including Premier
Foods plc, Dairy Crest plc and The Body Shop International plc.
Aswellas a background in finance, Alastair has significant experience
in corporate strategy, restructuring and M&A.
Other roles:
Independent Member of the Audit and Risk Committee for the
Department for Education and Non-Executive Director and Chair
ofthe Audit and RiskCommittee at Greencore Group plc.
Appointed to the Board:
14 March 2022
Skills and experience:
Regi has extensive leadership experience in global fast-moving
consumer goods. Shehas held Regional General Manager and Vice
President positions with Procter & Gamble (P&G) in Europe, Asia, the
Middle East and Africa. She first joined P&G in the Nordics within the
laundry and cleaning sector. Regiis currently a Non-Executive Director
at several tech start-ups in Switzerland, where she resides.
She also works as an adviser to private equity companies and
asacoach.
Regi holds a Master of Business Administration from the University
ofMichigan, USA.
Regi has previously held Non-Executive Director positions at Telenor
ASA, Geberit AG and Plair SA, and as chair of an internationalNGO.
Other roles:
Non-Executive Director at Billerud AB andGmelius SA, and a Director
of Regina Sarl.
63
McBride plc Annual Report and Accounts 2024
Strategic Report
Governance Report Additional InformationFinancial Statements
Compliance with the UK Corporate
GovernanceCode2018
The Board is pleased to report that the Company has applied the Principles and complied
with the provisions of the UK Corporate Governance Code 2018 for its financial year ended
30 June 2024.
The table below provides a guide to the most relevant explanations for how the Company
has complied with each Principle.
Board leadership and company purpose Page reference
A. An effective and entrepreneurial Board promotes the long-term
sustainable success of the Company, generating value for
shareholders and contributing to wider society.
pages 1 to 60, 62 to 63
and 65 to 70
B. Purpose, values and strategy are set and align with culture, which
ispromoted by the Board.
pages 5 to 10, 31, 65 to
70 and 84
C. Resources allow the Company to meet its objectives and measure
performance. A framework of controls enables assessment and
management of risk.
pages 35, 49, 53 to 59
and 80 to 82
D. Engagement with shareholders and stakeholders is effective
andencourages their participation.
pages 22 to 24 and 65
to 66
E. Oversight of workforce policies and practices ensures consistency
with values and supports long-term sustainable success.
Theworkforce is able to raise matters of concern.
pages 22, 31 to 34, 65 to
66 and 69
Division of responsibilities Page reference
F. The Chairman is objective and leads an effective Board with
constructive relations.
pages 61 to 63 and 67
to 70
G. The Board comprises an appropriate combination of Non-Executive
and Executive Directors, with a clear division of responsibilities.
pages 61 to 63 and 67
to 68
H. Non-Executive Directors commit appropriate time in line with
theirrole.
pages 69, 71, 76 and 100
I. The Company Secretary and the correct policies, processes,
information, time and resources support Board functioning.
pages 65 to 70
Composition, succession and evaluation Page reference
J. There is a procedure for Board appointments and succession plans
for Board and senior management which recognise merit and
promote diversity.
pages 61 and 71 to 75
K. There is a combination of skills, experience and knowledge across
the Board and its Committees. Tenure and membership are
regularly considered.
pages 62 to 63, 67, 68
and 71 to 75
L. Annual evaluation of the Board and Directors considers overall
composition, diversity, effectiveness and contribution.
pages 61 and 72
Audit, risk and internal control Page reference
M. Policies and procedures ensure the independence and effectiveness
of internal and external audit functions. The Board satisfies itself of
the integrity of financial and narrative statements.
pages 76 to 82
N. A fair, balanced and understandable assessment of the Company’s
position and prospects is presented.
pages 1 to 60, 82 and 107
to 134
O. Procedures manage and oversee risk, the internal control
framework and the extent of principal risks the Company is willing
to take to achieve its long-term strategic objectives.
pages 53 to 59, 66 and
76 to 82
Remuneration Page reference
P. Remuneration policies and practices are designed to support
strategy and promote long-term sustainable success, with executive
remuneration aligned to Company purpose, values and strategic
delivery.
pages 83 to 89
Q. A transparent and formal procedure is used to develop policy
andagree executive and senior management remuneration.
pages 83 to 84 and 100
R. Independent judgement and discretion is exercised over
remuneration outcomes taking account of the relevant wider
context.
pages 83 to 89 and 100
The Code is published by the Financial Reporting Council, a full copy of which can be
viewed on its website www.frc.org.uk.
64
McBride plc Annual Report and Accounts 2024
Strategic Report
Governance Report Additional InformationFinancial Statements
Corporate Governance Statement
Introduction
In this Annual Report we report on how we
have applied the main Principles of the 2018
Code and followed its recommendations.
A cross-referencing table to each Code
Principle can be found on page 64.
The Governance Report complements the
Strategic Report and explains how the
Board operates within a robust governance
framework, which underlies the work of
the Directors to ensure that the Company’s
purpose, values, strategy and culture are
aligned. The Board’s role is promoting
the Group’s long-term success; setting
its strategic aims and values; supporting
leadership to put them into effect;
supervising and constructively challenging
leadership on the operational running
of the business; ensuring a framework
of prudent and effective controls; and
reporting to shareholders on the Board’s
stewardship. We trust that the Strategic
and Governance Reports together enable
ourstakeholders to assess the effectiveness
of those frameworks and the quality of
theiroutcomes.
Business model, strategy and risks
Strategy
Good progress was made in implementing
the Transformation programme during
the year, which continued to drive
improvements in the areas of productivity,
Service Excellence, Commercial Excellence
and investment in best-in-class technology.
The Transformation programme is central
to the Company achieving its strategic
objectives and ensuring sustained margin
improvement and revenue growth.
As a Board, we reviewed the strategic
direction of each division during the year.
The review again confirmed the Compass
approach, divisional organisation and the
strategic direction of each division, whilst
reaffirming the fact that our purpose,
vision and values continue to set the right
objectives for the Group. On pages 25 to
35 we explain our approach to enhancing
the sustainability of our business, whilst
outlining some of the key initiatives we are
taking to create value for our customers,
employees, shareholders and society.
Further details on strategic topics assessed
by the Board during 2024 can be found on
page 66.
Purpose, values and culture
McBride’s purpose, values and culture
have sustainability at their heart. Whilst
we operate through five divisions, we
have a single vision and purpose and
common values. Our guiding principles
of focused profitable growth, backed by
effective execution and a strong McBride
identity, provide strategic direction towards
achieving our vision and purpose and
delivering long-term sustainable success.
Asexplained in the Strategic Report, to
fulfil our commitment to our stakeholders to
govern responsibly, we need to ensure that
we have a full understanding of the impact
of our products and the way we conduct
business, on people and the environment.
Our sustainability framework is therefore
based around four objectives:
• product and design;
• production and operations;
• our people; and
• community and society.
McBride continues to encourage a sense
of belonging and employee engagement
to ensure a motivated and productive
workforce. We are continuing to focus on
the development of our people and on
promoting a diverse and inclusive culture.
The measurements the Board uses to
evaluate culture continue to evolve and
include employee engagement surveys,
senior leaders’ pulse surveys and monitoring
HR statistics such as absenteeism, employee
turnover, learning and development
completion rates and safety incidents.
Some of these are already part of our
non-financial KPIs as set out in the Strategic
Report.
Stakeholder engagement
The Board is aware of its obligations both
collectively and individually to promote the
success of the Company for the benefit of
its stakeholders as a whole: its workforce,
its customers, its suppliers, its shareholders
and its communities. Having an overall
understanding of our stakeholders’
perspectives and values, and considering
them in our decision making and planning,
is crucial to the Group’s continued
success and we value their broad range of
perspectives. Comprehensive engagement
allows us to make informed decisions,
whilst considering the consequences of our
actions on the different stakeholder groups.
The Board is mindful of all of the Group’s
stakeholders when making decisions of
strategic importance.
Workforce engagement
In accordance with Provision 5 of the 2018
UK Corporate Governance Code, the Board
appointed Regi Aalstad, Independent
Non-Executive Director, as the designated
Non-Executive Director for employee
engagement in November 2022. Regi has
continued in this role in the financial year
under review.
During the year, the Board visited a number
of the Group’s manufacturing plants and
spent time with our colleagues. Engaging
with the workforce, both formally and
informally, is a priority for the Board to
ensure that we are aware of the views
of theworkforce and can address any
concerns they may have.
Customer engagement
Engagement with customers is at the
operational level. The Board receives regular
updates from the CEO and members of
the senior management team on customer
sales performance and ongoing customer
engagement. These updates assist the
Board in developing and maintaining its
understanding of any potential issues and
how these could be addressed. Further
details of engagement with customers can
be found on page 23.
Supplier engagement
Further details on engagement with our
suppliers can be found on page 23.
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Governance Report Additional InformationFinancial Statements
Corporate Governance Statement continued
Stakeholder engagement continued
Communities
The Board is conscious of the need to
positively impact the communities living
and working around us by providing
employment within our communities and
by our increased focus on ESG initiatives.
Further details of engagement within our
communities can be found on page 24.
Shareholder engagement
The Board recognises the importance of
regular, open and constructive dialogue
with shareholders throughout the year.
The Board welcomes the opportunity
to openly engage with shareholders
and help them understand our business.
Details of engagement with shareholders
can be found on page 24.
Board activity in 2024
Below is a non-exhaustive list of areas of
focus, actions and decisions taken by the
Board during the year. TheBoard’s focus
has principally been on: (i)governance
and risk; (ii)themarket and economic
environment; (iii) trading, financial
and operational performance; (iv)
strategic development opportunities;
and(v)training.
Governance and risk
Matters considered
• Approved the Annual Report and
Accounts
• Approved the business to be
considered at theAGM
• Capital Markets Day
• Shareholder discussion and feedback
• Received updates from the Audit and
RiskCommittee, Nomination Committee
and Remuneration Committee
• Approved Committee Terms ofReference
• Corporate policies review andapproval
• Corporate governance horizon scanning
• Health and safety updates
• Insurance programme renewal
• Litigation updates
Market and economic environment
Matters considered
• Market and customer development
updates
• Competitor activity analysis
• Raw material market updates
• Inflation outlook
• Sales and pricing activity reviews
• Purchasing performance and feedstock
forecasts
• Forward outlook for FX and interest rates
Trading, financial and operational performance
Matters considered
• Financial management and
performance
• Banking, tax and treasury strategy and
policy reviews
• Review and approval of three-year
plans andbudgets
• Review of pricing strategy
• Divisional performance reviews
• Approval of full-year and half-year
announcements and other trading
updates
• Annual Report and Accounts review
andapproval
• Consideration of shareholder views and
analyst expectations
• Consideration of the share price
performance
• Review of the management of the defined
benefit pension scheme
• Review of the colleague engagement
survey
Strategic development opportunities
Matters considered
• Review of divisional and organisational
strategies
• Key operational project progress
reviews, including major capital
expenditure investment proposals
• Transformation programmes
• Overseeing strategic implementation
• M&A opportunities
• Review of talent strategy
• Regulatory affairs updates
Training
Matters considered
• Reporting obligations under the
Corporate Sustainability Reporting
Directive (CSRD)
• Fraud awareness and fraud management
• Cyber
• Plastics regulations
• 2024 UK Corporate Governance Code
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Corporate Governance Statement continued
The Board
The Board has collective responsibility
for leading the Group and promoting its
long-term success. It has the prime role of
confirming the Group’s purpose and vision
and agreeing a sustainable strategy that
supports its purpose. It is responsible for
setting cultural expectations that drive
ethical and responsible business conduct.
As at 30 June 2024, the Board of Directors
comprised the Non-Executive Chairman,
three independent Non-Executive Directors
and two Executive Directors. Additional
responsibilities assigned to certain
Non-Executive Directors are explained on
page 68.
The composition of the Board is subject
to review and is a responsibility delegated
to the Nomination Committee. Details of
the tenure, gender, nationality and relevant
experience of Board members are set
outbelow.
Board Committees
The Board is directly assisted in the
discharge of its duties by three Board
Committees: the Nomination Committee,
the Audit and Risk Committee and the
Remuneration Committee. The remit,
authority and composition of the
Committees is monitored to ensure effective
Board support. Each Committee provides
dedicated focus to a defined area of
responsibility with the nature of delegated
work ranging from a recommendation being
made to the Board or, if within its agreed
authority, a final decision being taken on
behalf of the Board. Further information
on the specific role of each Committee is
set out in their respective reports on pages
71to 102.
The Nomination Committee
The Board has established a Nomination
Committee. The Nomination Committee is
responsible for setting out and monitoring
the Board’s succession plans, reviewing the
composition and diversity of the Board and
proposing new appointments to the Board.
Further detail of the composition of the
Nomination Committee and its work during
the year can be found on pages 71 to 75.
The Audit and Risk Committee
The Board has established an Audit and Risk
Committee of independent Non-Executive
Directors. The Audit and Risk Committee
is responsible for monitoring the integrity
of the financial statements, reviewing the
effectiveness of internal controls and risk
management systems and overseeing the
relationship with the independent auditors.
Details of its composition and work during
the year are set out in the Audit and Risk
Committee Report on pages 76 to 82. The
Board is satisfied that the Chair of the Audit
and Risk Committee has recent and relevant
financial experience including competence
in accounting.
The Remuneration Committee
The Board has established a Remuneration
Committee, the composition and role
of which is set out in the Remuneration
Committee Report. The Remuneration
Committee ensures that the remuneration
policies and practices are designed to
support the Company’s strategy and
promote long-term sustainable success.
Further details of the work of the
Remuneration Committee throughout the
year can be found on pages 83 to 102.
Operational management
The management of the Group’s business
activities is delegated to the CEO, who
is ultimately responsible for establishing
objectives and monitoring executive actions
and for the overall performance of the
business. The day-to-day management
and global governance of the business is
delegated to members of the Executive
Committee on a structured functional basis.
As at 30 June 2024, the membership of
the Executive Committee comprised the
Chief Executive Officer, the Chief Financial
Officer, the Divisional Managing Directors of
the three largest divisions, namely Liquids,
Unit Dosing and Powders, and the Chief
HROfficer.
 0-6 years
5
 6-9 years
1
Board composition as at 30 June 2024
Tenure
 Male
4
 Female
2
Gender
 Manufacturing
5
 Retail
1
 Chemicals
1
 Finance
3
Relevant experience
 Norwegian
1
 American
1
 British
4
Nationality
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Roles within the Board
The roles of the Chairman and the Chief
Executive Officer are separate and there is a
clear division of responsibility between the
executive and non-executive members of
the Board. Details of these responsibilities
are set out below:
Chairman of the Board
Responsible for:
• overall leadership and governance of the
Board, ensuring it operates effectively
in terms of agenda setting, information
management, induction, development
and performance review;
• maintaining a focus on strategy,
performance and value creation and the
assessment of significant risks in the
implementation of strategy;
• ensuring the Board as a whole has a clear
understanding of shareholder, customer
and workforce views;
• promoting a healthy culture of challenge
and debate at Board and Committee
meetings and encouraging constructive
debate and decision making;
• fostering effective relationships and open
communication between all Directors;
• ensuring both Board and shareholder
meetings are properly conducted; and
• developing a supportive working
relationship with the Chief Executive
Officer.
Senior Independent Director
Responsible for:
• providing a sounding board for the
Chairman and acting as an intermediary
between other Directors when necessary;
• evaluating the performance of the
Chairman on behalf of the Directors; and
• being available to shareholders, where
contact through the Chairman or
Executive Directors is not appropriate.
Non-Executive Directors
Responsible for:
• providing the skills, experience and
knowledge to assist the Board’s
decisionmaking;
• challenging and assisting with developing
and establishing objectives and
monitoring the Group’s business model
and strategy;
• measuring and reviewing the
performance of the Executive Directors;
• providing independent insight and
support and advice to the Executive
Directors;
• reviewing Group financial information
and overseeing the effectiveness of the
Company’s internal controls;
• reviewing succession plans for Board
Directors and senior managers and
supporting inclusion and diversity; and
• setting policy in respect of Executive
Director remuneration.
Chief Executive Officer
Responsible for:
• effective leadership and development
of the executive management team and
operational running of the Group;
• developing and implementing the
Group’s business model and strategy;
• effectively communicating the Group’s
strategy and performance; and
• building positive relationships by
engaging appropriately with all internal
and external stakeholders.
Chief Financial Officer
Responsible for:
• deputising for the Chief Executive
Officer;
• proposing policy and actions to support
sound financial management, including
inrelation to funding and net debt;
• leading the Finance, Tax, Treasury and
ITfunctions;
• leading on mergers and acquisitions; and
• overseeing the defined benefit pension
scheme.
Company Secretary
Responsible for:
• compliance with Board procedures and
supporting the Chairman of the Board;
• ensuring the Board has high-quality
information, adequate reading time and
the appropriate resources;
• advising and keeping the Board updated
on corporate governance developments;
• considering Board effectiveness in
conjunction with the Chairman;
• facilitating the Directors’ induction
programmes and assisting with
professional development; and
• providing advice, services and support to
the Directors as and when required.
How the Board operates
Boardroom culture
The Board recognises the importance of
establishing the right culture and values and
communicating this message consistently
throughout the organisation. It is important
that the Board provides strong and effective
leadership, constructive challenge and
accepts collective accountability for the
long-term sustainable success of the Group.
In so doing, it will continue to drive and
deliver our strategy in the best interests of
all our stakeholders.
A strong feature of the Board’s effectiveness
in delivering the Group’s strategy is our
inclusive and open style of interaction which
benefits from a free flow of information
between the Executive and Non-Executive
Directors. The size of our Board encourages
Directors to discuss matters openly and
freely and to make individual contributions
through the exercise of their personal
skills and experience. No individual has
unfettered powers of decision making.
All Directors communicate with each other
on a regular basis and contact with the
Group’s senior managers is sought and
encouraged. In-person Board meetings have
been held at various site locations across
the Group in both 2023 and 2024.
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Independence
All Non-Executive Directors have been
appointed for their specific areas of
knowledge and expertise. They are
independent of management and exercise
their duties in good faith based on
judgements informed by their personal
experience. This ensures that matters can
be debated constructively in relation to
both the development of strategy and
assessment of performance against the
objectives set by the Board.
It is believed that the balance between
non-executive and executive representation
continues to encourage healthy
independent challenge.
Powers of Directors
The powers of the Directors are
determined by the Articles of Association
(‘Articles’), whichare available on our
website, UK legislation, including the
Companies Act 2006, andany directions
given by the Company in a General
Meeting. TheDirectors are authorised
by the Company’s Articles to issue
and allot ordinary shares and to make
marketpurchases of the Company’s own
shares. These powers are referred to
shareholders for renewal ateachAGM.
The appointment and replacement of
Directors is governed by the Company’s
Articles, the2018 Code, the Companies Act
2006 and related legislation.
The Directors may from time to time appoint
one or more Directors. As required by the
Articles, any Director appointed during the
year will be required to step down and stand
for election at the next AGM.
Any amendments to the Articles can only
be made by special resolution at a General
Meeting of shareholders.
Subject to the Articles and the Companies
Act 2006 and any directions given by
special resolution, the business of the
Company is managed by the Board who
may exercise all thepowers of the Company.
Conflicts of interest
In line with the Companies Act 2006
andthe Articles, the Company has a
strictprocess inplace to manage conflicts
of interest.
A Director who becomes aware that they or
their Connected Persons have an interest in
anexisting or proposed transaction with the
Company is required to declare that interest
at a meeting of the Board. Such disclosures
are recorded and compliance reviewed at
each meeting. Under the powers granted
by the Articles, the Board is authorised to
approve such conflicts where appropriate.
No Director had a material interest at any
time in any contract of significance with the
Company other than their service contract
or letter of appointment.
Re-election of Directors
The Board is satisfied that all the Directors
standing for re-election perform effectively
and demonstrate commitment to their
roles. This has been demonstrated during
the year by the willingness of the Directors
to attend additional Board meetings, as
well as from the general support they have
given to the Executive Directors and senior
managers. When appropriate, any changes
to the commitments of any Director are
considered in advance bythe Board to
ensure they are still able to fulfil their duties
satisfactorily.
Although the Articles require the Directors
to submit themselves for re-election
at every third AGM, in line with the
requirements of the 2018 Code, all
Directorsare subject to annual re-election
at the AGM.
The biographies for each Director seeking
re-election are set out in the 2024 notice
of meeting. These provide details of the
skills and experience which demonstrates
why each Director’s contribution is,
and continues to be, important to the
Company’s long-term sustainable success.
The Board, its Committees and the
individual Directors participate in an annual
performance review. Further details of the
performance review process can be found in
theNomination Committee Report on pages
73 and 74.
The Committee confirmed the continuing
independent and objective judgement
of all the Non-Executive Directors. The
performance review process also confirmed
that the performance of all the current
Directors standing for re-appointment
continued to be effective and demonstrated
that the Board has the necessary range of
skills, knowledge and diversity of thought.
Policies
Whilst the Board takes overall responsibility
for approving Group policies, including
those relating to business ethics, health and
safety, environmental matters, anti-bribery
and corruption and whistleblowing,
their implementation is delegated to the
ChiefExecutive Officer and cascaded
throughout the organisation via the
Executive Committee and the various
functional teams.
Time commitment
The expected time commitment of the
Chairman and Non-Executive Directors
is agreed and set out in writing in the
letters of appointment confirming their
position. The existing demands on a
Non-Executive Director’s time are assessed
on appointment to confirm their capacity
to take on the role. The Nomination
Committee reviews Directors’ external
commitments annually to ensure they still
have sufficient capacity to fulfil their role.
Further appointments which could impair
their ability to meet these arrangements
can only be accepted following approval
by the Board. Thetakingon of any external
appointment by an Executive Director is
subject to Boardconsent.
There were seven scheduled meetings in the
year to 30 June 2024. Scheduled meetings
of the Board follow an agreed format,
with agendas developed by the Chairman,
Chief Executive Officer and Company
Secretary, who consider the Board’s annual
plan of business and the current status
of projects, strategic workstreams and
overarching operating content. Adequate
time is allocated to support effective and
constructive discussion of each item.
Anelectronic resources portal allows
efficient navigation of Board papers.
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Board and other meetings
Board papers are prepared and issued prior
to each Board meeting to allow Directors
sufficient time to give due consideration
to all matters. Directors are able to take
independent professional advice, if
necessary, at the Company’s expense.
The Board holds a minimum of seven
meetings a year at regular intervals.
Additional meetings are held on an ad hoc
basis as and when required.
From time to time, the Board authorises the
establishment of an additional committee or
sub-committee to consider and, if thought
fit, approve certain items of business.
During the year, the Non-Executive Directors
have met without Executive Directors being
present before or after each scheduled
Board meeting. The Senior Independent
Director and the Non-Executive Directors
have also met without the presence of the
Chairman as part of the Board performance
reviewexercise.
Board attendance
The table below shows the attendance at Board and Committee meetings during the year to 30 June 2024.
Directors Role Board Nomination Audit and Risk Remuneration
Number of meetings held in the year 7 2 4 5
Jeff Nodland Chairman 7/7 2/2 — 5/5
Chris Smith Chief Executive Officer 7/7 — — —
Mark Strickland Chief Financial Officer 7/7 — — —
Elizabeth McMeikan Senior Independent Non-Executive Director 7/7 2/2 4/4 5/5
Alastair Murray Independent Non-Executive Director 7/7 2/2 4/4 5/5
Regi Aalstad Independent Non-Executive Director 7/7 2/2 4/4 5/5
The Corporate Governance Statement wasapproved by the Board on 16September 2024 and signed on its behalf by:
Jeff Nodland
Chairman
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Dear shareholder
On behalf of the Nomination Committee, I am pleased to
presentthe Nomination Committee Report for the year ended
30June 2024.
The Committee’s key objective is to ensure that the Board
comprises individuals with the appropriate skills, knowledge,
experience and diversity to ensure that McBride can fulfil its
purpose, achieve its vision and execute its strategy.
Composition of the Nomination Committee
I chair the Nomination Committee and was regarded as
independent on appointment. I will not chair the Committee when
it is dealing with matters of succession to the Chairmanship of the
Board or assessment of the Chairman of the Board’s performance.
The Committee also comprises three other independent
Non-Executive Directors: Elizabeth McMeikan, Regi Aalstad and
Alastair Murray. As reported on page 70, the Committee met
twice during the year, with all Committee members attending
bothmeetings.
Induction, development and support
On appointment, all new Directors undergo a formal and in-depth
induction programme to provide them with an appropriate
understanding of the business and what is expected of them in
their role as a Director. This involves site visits, meetings with senior
management and provision of access to key documents relating to
their role. External training may also be provided by independent
legal advisers in relation to the key duties of Directors and required
governance principles.
The Board recognises the importance of ongoing training and
development to ensure Directors have the skills and knowledge
to discharge their duties effectively. This can take the form of
briefing papers and/or presentations on strategic, regulatory and
legislative developments and other topics of specific relevance to
ensure that the Directors continually update their knowledge of,
and familiarity with, the Group’s business and the markets in which
we operate. During the year, the Board was provided with external
training on its reporting obligations under the CSRD and fraud
awareness and fraud management, as well as internal presentations
on cyber security, plastics regulations and the 2024 UK Corporate
Governance Code. From October 2024, the Board will receive
training updates on a quarterly basis from the Company’s Group
Head of Sustainability.
All Directors have access to the Company Secretary, who is
responsible for ensuring that Board procedures are followed and
that the Company complies with all applicable rules, regulations
and obligations governing its operations.
Key responsibilities of the Nomination Committee
Details on our key responsibilities can be found below and in our
Terms of Reference at www.mcbride.co.uk.
Board composition
• Review the ongoing composition of the Board and its
Committees to ensure they have the necessary expertise and
experience to discharge their role now and in the future.
• Lead the appointment process for new Directors.
Succession planning and talent management
• Ensure adequate plans are in place for effective succession
planning at management and Board level.
• Review the measures in place for the development and retention
of senior management.
Diversity and inclusion
• Ensure a balance of skills, knowledge, experience and diversity
on the Board.
• Encourage diversity throughout the Group and oversee a diverse
pipeline for succession.
• Review the Board’s monitoring of diversity and inclusion
initiatives to ensure compliance with the Board’s policy.
Governance
• Oversee the Board performance and review process.
• Agree an action plan addressing the results of the annual
performance review process.
Nomination Committee Report
This year the Committee
focused on improvement
inthe areas identified
through the Board
evaluation and, whilst
continual improvement
issought, significant
progresswas made.
Jeff Nodland
Chair of the Nomination Committee
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Key responsibilities of the Nomination Committee continued
Committee activities
Our principal activities during 2024 and up to the date of approval of this Annual Report were as follows:
Board composition Reviewed the Board’s skills matrix and the Board Diversity Policy. The Committee reviewed and considered the performance and
contribution made by Alastair Murray as part of a review conducted pursuant to the succession planning procedures. The Committee
confirmed his effectiveness in his role and acknowledged his valuable contribution to Board debates and effective chairmanship of the
Audit and Risk Committee. The Committee approved an additional term of three years.
Re-election of Directors After considering the individual contributions made by the Directors, it was recommended to the Board that all Directors be proposed for
re-election at the 2024 AGM.
Review of performance and effectiveness
during 2024
Undertook a review of the Board and the Committee’s performance and effectiveness as part of the annual Board performance review
andconsidered progress against actions identified in the prior year Board evaluation.
Conflicts of interest and independence Informed the Board of updates to the Conflicts of Interest Register.
During the year, all independent Non-Executive Directors were considered to have maintained independence throughout the year.
External commitments and Director
performance review
As a general principle, the Committee takes the view that Non-Executive Directors should have no more than four, and for Executive
Directors no more than one, additional listed mandates.
The Board has concluded that each Non-Executive Director has sufficient time to discharge their duties as a Director of the Company,
taking into consideration their external appointments and commitments. The Committee will continue to review the external commitments
of each Director on an annual basis.
Details of the Directors’ external commitments can be found on pages 62 and 63.
The Chairman assessed the performance of all Directors during the course of the year and met with each Non-Executive Director to
discuss their performance and contribution to the Board. Directors’ duties under section 172 of the Companies Act 2006 are referenced
inthe minutes at the beginning of every meeting.
Board Inclusion and Diversity Policy The Board-level policy on inclusion and diversity was reviewed to ensure the ongoing relevance of Board membership to a global
manufacturing company in today’s world. The policy was extended to include the Board’s principal Committees and the Company’s
Executive Committee, and diversity targets and progress in achieving them were reviewed. Further details are set out on page 75.
Talent and capability The Board received an update on executive and senior leader talent and succession planning, which enabled the Directors to monitor the
internal talent pipeline and provide feedback. This update included analysis of the gender diversity of the talent pool, with a view towards
continuing to improve diversity over the longer term.
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Assessing Board performance
Progress against 2023 actions
In last year’s Annual Report, the Board reported on the key areas of focus from the 2023 Board evaluation. The table below sets out the Board’s progress in the key areas of focus.
Key areas of focus from
our2023evaluation Actions to be taken throughout the year Progress
Macro and megatrends Adapt the Board agenda to review more fully the
strategic impacts from macro and megatrends
including:
• challenging the strength and resilience of the
business model and emerging technologies;
• ESG influences; and
• consumer and retailer developments.
The Board agenda is now more focused and prioritised to drive discussion on the Company’s
value drivers and achieving the Company’s strategic goals, recognising the assessment of
risks and opportunities as a tool to measure the resilience of the business model.
Progress on the Transformation programme is now a standing item on the Board agenda
toinclude such matters as the implementation of SAP S/4HANA.
In view of the developments in the ESG landscape, the Company has appointed a Head
of Sustainability and created a Sustainability Committee. Work continues in relation to
preparedness for CSRD, CS3D and other developments.
Private label volumes have continued to grow during the financial year due to cost-of-living
increases with consumers being attracted to the lower costs of private label. The Board has
monitored market data and trends in the household product market, which has informed the
Board and enabled it to monitor the Company’s progress in achieving its strategic goals.
Corporate resilience Reviewing business readiness for any future challenges
and opportunities, including:
• crisis management including cyber risks;
• margin and pricing management in a volatile macro
environment; and
• medium-term validity of key strategic initiatives.
A crisis management exercise was successfully carried out during the year facilitated by
an insurer (RQA). The Board participated in the exercise and received feedback from the
facilitator.
The Board has been monitoring margin and pricing management in the context of the
continuing geopolitical uncertainties and global supply chain instability.
Information and support Improve Board papers through better use of
summaries and appendices and clearer positions.
Increased focus has been made to ensure that the Board papers are concise and clear, and
that summaries and appendices are used, where appropriate.
2024 Board performance review process
The Board recognises the importance and benefits of continually monitoring the Board’s effectiveness. In April 2024, the Board conducted an online performance review, led by the
Chairman. The review used Independent Audit’s online system, Thinking Board
©
, as the basis of the review. The respondents included the Board and the interim Company Secretary, who
anonymously answered questions derived from the Thinking Board
©
library. A report was prepared by Independent Audit based on the results of the self-assessment, which Independent
Audit then presented to the Board. No interviews or document reviews were conducted as part of this exercise, and the report was based solely on the information gathered through the
questionnaires.
The evaluation covered themes regarding the operation of the Board, value creation and strategy, talent and culture, management of risk, Board composition and dynamics, the Chairman
and the Committees. The Chairman held or will hold one-to-one discussions with each Director to discuss areas of focus for the year ahead.
The Senior Independent Director, Elizabeth McMeikan, received feedback from the Non-Executive Directors with regard to the Chairman’s performance separately to the Board evaluation.
Elizabeth discussed the feedback and any areas of development with the Chairman.
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Assessing Board performance continued
2024 Board evaluation findings
The Board’s main strengths identified by the evaluation were:
• collegiate and productive Board relationships between Non-Executive Directors and Executive Directors;
• open and inclusive discussions;
• effectiveness of the Committees;
• effective chairmanship of the Board and the Committees;
• the Board having the right skills and experiences; and
• proper consideration being given to the Company’s stakeholders.
Areas of focus for 2025 Commentary and actions
Big trends and long-term view Focusing more on the big trends, specifically how major shifts in markets, as well as in customer needs and expectations, are being anticipated
andincorporated into the strategy, coupled with a shift in Board focus to a more long-term view, now that the period of instability has passed.
Emerging technology Giving more consideration to the opportunities and risks presented by emerging technology and how they are being reflected in the strategy.
Risk Continuing to further improve the oversight of risk, particularly cyber risk.
Succession planning
During the year, the Committee continued to develop its succession plan for all Board roles to ensure that appointments are made of individuals who have the appropriate skills,
experience and personal characteristics.
Our succession planning involves the following steps:
Identify those roles that
are subject to formal
succession planning
Define the skills,
competencies and
experience required of
individuals toundertake
thoseroles
Identify internal talent
or external sources to
which recruitment will
bedirected
Assess the individuals to
undertake the roles
1 2 3 4
In 2021 the Board approved a formal succession plan considering the Group’s strategy and structure, the size and composition of the Board, the terms of appointment for the current
Directors and the skills and expertise that McBride will need going forward. Short-term and medium-term plans were put in place for all roles subject to formal succession planning.
TheCommittee currently believes that the Board is of an appropriate size and has the skills required for the Company’s current requirements but continues to keep this under review
andwill look to implement the succession plan as and when it believes that there is a requirement for new Directors.
The Committee has reviewed the succession plan to ensure that it continues to support the development of a diverse pipeline with particular focus on key senior employees.
Whereinternal candidates are identified, ongoing development will be put in place to ensure that they are prepared for the role.
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Board appointments and election procedures
The Committee has overall responsibility for leading the process for new appointments to
the Board and ensuring that the Board has Non-Executive Directors with relevant, diverse
and complementary skills.
Any new Directors are appointed by the Board and, in accordance with the Company’s
Articles of Association, they must be elected at the next AGM to continue in office.
Allexisting Directors retire by rotation and stand for re-election every year.
Diversity and inclusion
Board appointments are made based on merit against objective criteria whilst actively
seeking diversity of skills, gender, social and ethnic backgrounds, cognitive and personal
strengths. The policy in respect of Board diversity is reviewed annually by the Committee
and aims to ensure the optimal composition of the Board and its Committees for successfully
delivering McBride’s strategy with the goal of achieving the targets contained in the FCA
Listing Rules on diversity which are included in the diversity objectives set out below.
In 2024, the Committee reviewed the Board Diversity Policy, which sets out a commitment
to encourage diversity and inclusion in the boardroom. The application of the Policy was
extended to include members of the Executive Team as well as the Nomination, Audit
and Risk and Remuneration Committees. The new Board and ExCo Diversity Policy sets
out to ensure that appointments are based on the best individual for the role and that
the composition of the Board, its Committees and the Executive Committee should have
an appropriate balance of skills and diversity to meet the requirements of the business.
The Committee considers that it has successfully achieved diversity in terms of differing
experience, education, background, thinking styles and gender, both on the Board and
Executive Committee. However, the Committee acknowledges it must continue to move
forward to embrace all aspects of diversity. As a global company with manufacturing
sitesin the EU and Asia, with two non-UK nationals on the Board and a further three
non-UK nationals on the Executive Committee, the Company is well placed to continue
onthis journey.
At 30 June 2024, two out of six members of the Board were female (33.3%), two out of
sixmembers (33.3%) of the Executive Committee were female and 32.7% (17 out of 52)
ofthe direct reports to the Executive Committee were female
(1)
.
At 30 June 2024, no members of the Board or the Executive Committee were from
anon-white background.
The objectives of the Board Diversity Policy are reviewed and recommended to the
Board for adoption annually by the Committee. This year the Board updated the Policy
as it continues to strive for greater diversity on the Board and at executive and senior
management level. The Board’s objectives are set out opposite:
Objective Implementation and progress
To ensure so far as possible
that the proportion of
women on the Board is not
less than 40%.
The appointment of Regi Aalstad in March 2022 increased
the proportion of women on the Board. However, the
proportion of women remains at 33.3% as no additional
Board members have been recruited during the year. The
Committee believes that the current Board structure of
two Executive and four Non-Executive Directors, including
the Chairman, is appropriate for the size of the Company.
However, McBride will continue to work towards its diversity
target of 40% female representation and the Committee is
hopeful that any future recruitment will enable the Board to
exceed this target.
To ensure that at least
one of the senior Board
positions (Chair, CEO, SID
or CFO) is a woman.
Elizabeth McMeikan remains in the role of Senior
Independent Director.
To ensure so far as possible
that the proportion of
women within the Executive
Committee and their direct
reports is not less than 25%.
The minimum target for female representation within the
Executive Committee and their direct reports has been
achieved and maintained throughout the year. TheCompany
will continue to ensure that there are no barriers for women
rising to senior positions within McBride.
To ensure so far as possible
that there is one member of
the Board from a minority
ethnic background.
As stated above, the Committee believes that the current
Board structure of two Executive and four Non-Executive
Directors, including the Chairman, is appropriate for the
size of the Company. Whilst two of the current Board
members are resident overseas, McBride will continue to
work towards its diversity target to ensure that there is one
member of the Board from a minority ethnic background.
The Committee is hopeful that any future recruitment will
enable the Board to meet or exceed this target.
The Committee will continue to make recommendations for new appointments to the Board
based on the best individual for the role, whilst ensuring that the Board’s composition has
an appropriate balance of skills and diversity to meet the requirements of the business.
2025 objectives
The Committee’s focus for 2025 will be on strategic opportunities and operational
performance to ensure that the business builds on the successes of this year and delivers
for its stakeholders, including by creating further value for its shareholders.
Jeff Nodland
Chair of the Nomination Committee
(1) The Executive Committee figures include the two Executive Directors. The direct reports to the Executive
Committee figures include all direct reports into any member of the Executive Committee, excluding direct
reports who are, themselves, a member of the Executive Committee.
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During the year we
particularly focused on risk
management and
processesto ensure the
effective governance of
theTransformation
programme.
Alastair Murray
Chair of the Audit and Risk Committee
Audit and Risk Committee Report
Dear shareholder
On behalf of your Board, I am pleased to present the Audit and Risk
Committee Report for the year ended 30 June 2024.
The Committee is responsible for monitoring and reviewing
the integrity of the Group’s financial reporting systems and
for assessing and providing assurance on the adequacy and
effectiveness of internal control policies and procedures in place
forthe identification, assessment and reporting of risk.
The Committee also reviews and oversees the relationship with
the independent auditors, PricewaterhouseCoopers LLP (PwC),
including the approval of the terms of their engagement and fees,
their independence and expertise, and the effectiveness of the audit
process. In addition to the disclosure requirements relating to audit
and risk committees under the Code, the Committee’s report sets
out areas of significant and particular focus for the Committee.
Over the course of 2024, we carried out our usual work as set out
on page 78. In addition, during the year we particularly focused on
risk management and processes to ensure the effective governance
of the Transformation programme.
Committee role
The Committee is responsible on behalf of the Board for:
• monitoring the integrity of the financial statements and
overseeing the financial reporting process;
• reviewing the effectiveness of the Group’s systems of risk
management and internal control;
• reviewing the effectiveness of the Internal Audit function; and
• approving the appointment, re-appointment, remuneration and
removal of the independent auditors, aswell as the terms of
the engagement and the provision of any non-audit services,
overseeing the independent auditors’ independence and
effectiveness in delivering a quality audit.
The roles and responsibilities of the Committee are set out in its
Terms of Reference. These are reviewed annually to ensure that
they are aligned with best practice, including the recommendations
of the ICSA: The Chartered Governance Institute. A copy of the
Committee’s Terms of Reference is available on the Group’s website
at www.mcbride.co.uk.
Composition of the Audit and RiskCommittee
I served as Chair of the Committee and RegiAalstad and
ElizabethMcMeikan served as members of the Committee
throughout the year. As reported on page 70, the Committee met
four times during the year, with all Committee members attending
all four meetings.
For the purposes of the UK Corporate Governance Code, I qualify
as a person with ‘recent and relevant financial experience’, being
a Fellow of the Chartered Institute of Management Accountants
and having previously been the Chief Financial Officer for Premier
Foods plc. I have previously held other senior finance roles at
DairyCrest plc and The Body Shop International plc.
All members of the Committee are independent Non-Executive
Directors, witha broad range of fast-moving consumer goods
(FMCG), commercial, operational and financial experience relevant
to the Group’s business.
In addition to the Committee members, the Chief Executive Officer,
Chief Financial Officer, Chairman, Group Financial Controller, Head
of Internal Audit and independent audit partner are regularly invited
to attend and present at the Committee’s meetings. During the year,
PwCattended all four meetings.
During the year I met separately with representatives of the
independent auditors in the absence of the Executive Directors.
I also had regular meetings with senior members of the Finance
team and the Head of Internal Audit. This provided me with a better
understanding and insight of the key risk and control issues raised,
and ensured sufficient time was devoted to them at subsequent
meetings.
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Effectiveness of the Audit
andRiskCommittee
As part of the annual Board evaluation,
the effectiveness of the Committee
was reviewed by questionnaire. It was
determined that the Committee continues
to be effective in its role. More details
on how the annual Board evaluation was
conducted can be found on pages 73 and
74 of the Nomination Committee Report.
The Board is satisfied that each of the
Committee members is independent,
and that the Committee as a whole has
the necessary commercial, financial
and audit expertise required to fulfil its
responsibilities. The members of the
Committee have a wide range of business,
international and governance expertise both
within the sector and elsewhere, as shown
intheir biographies on pages 62 and 63. The
Board has determined that the Committee
has competence relevant to the sector in
which the Group operates.
Independent auditors
The Audit and Risk Committee has primary
responsibility for making recommendations
to the Board on the appointment,
re-appointment and removal of the
independent auditors. This is submitted
to shareholders for their approval at the
Company’s AGM.
As part of its oversight of the independent
auditors, the Committee has undertaken its
annual assessment of the auditors and audit
process. This included the Committee’s
own evaluation of the reports and services
received, such as the scope, strategy,
approach, audit hours, quality of reports
presented to the Committee, value added
and outcome of the year-end audit.
The Committee also considered the
professionalism, competence and
objectivity, constructive challenge of
management and key judgements of the
auditors. In its assessment, the Committee
took account of the views of management
and the Committee’s own experience and
interactions with the independent auditors
throughout the year. The Committee also
considered the professionalism, competence
and objectivity, constructive challenge
of management and key judgements
of theauditors. In its assessment the
Committee took account of the views of
management and the Committee’s own
experience and interactions with the
independent auditors throughout the year.
The Committee has sought assurance from
PwC of their compliance with applicable
ethical guidance and, in addition, has taken
account of the appropriate independence
and objectivity guidelines.
The Committee considers the risk of PwC
withdrawing from the market as remote,
since they are one of the four largest
accounting firms globally.
The Committee has considered and
approved the terms of engagement
and fees of PwC for the year ended
30June2024. Fees payable by the Group
to PwC totalled £1.2 million (2023: £1.3m)
in respect of audit services. There were no
contingent fee arrangements with PwC.
Audit tenure
PwC was appointed as the Group’s auditors
on 14 November 2011. In accordance with
the Companies Act 2006 and the EU
Audit Regulation forming part of UK law
(as amended by the EU Exit Regulations),
a full tender for the appointment of the
independent audit firm was undertaken
during 2021, as a result of which PwC were
re-appointed as our independent auditors
from 2022.
The Committee remains satisfied with the
level of independence, objectivity, expertise,
fees, resources and general effectiveness
of PwC and, accordingly, the Committee
recommends (and the Board agrees) that
a resolution for the re-appointment of PwC
as independent auditors for the Company
should be proposed at the forthcoming
AGM in November 2024. The independent
auditors are required to rotate the audit
engagement partner every five years. Hazel
Macnamara began her appointment as audit
engagement partner in July 2023, so this is
her second audit cycle.
Non-audit services
The Company maintains a detailed policy
on the engagement of the independent
auditors for non-audit services, designed
to preserve their independence when
performing the statutory audit. To avoid any
conflict of interest, types of non-audit work
are categorised as those:
• for which the auditors can be engaged
without referral to the Committee;
• for which a case-by-case decision is
necessary; and
• from which the independent auditors
areexcluded.
In accordance with this policy, other
providers are considered for non-audit
work. Such work is awarded based on
expertise, service and cost. This policy is
regularly reviewed; a copy is available from
the Group’s website at www.mcbride.co.uk.
Fees payable by the Group to PwC totalled
£2,000 (2023: £2,000) in respect of
non-audit services, equating to 0.2% of
audit fees received by PwC during the
year (2023: 0.1%). These non-audit services
involved other non-audit assurance services.
The Committee is of the view that this
has not threatened the independence or
objectivity of the independent auditors.
The Company’s policy on the employment
of former employees of the independent
auditors was adhered to during the financial
year. No such employees were employed by
any company in the Group.
In all other respects, the Committee is
satisfied that the independent auditors have
exercised an appropriate level of scepticism
and challenge in relation to the Company’s
control environment.
Financial Reporting Council (FRC)
Audit Quality Review
The FRC’s Audit Quality Review (AQR)
team routinely monitors the quality of
the audit work of certain UK audit firms
through inspections of sample audits and
related quality processes. PwC’s audit of
the Group for the year ended 30 June 2022
was chosen by the FRC for an AQR as part
of their routine quality monitoring process.
TheCommittee considered both the
findings of the FRC’s AQR team’s report into
the conduct of PricewaterhouseCoopers
LLP audits generally and in respect of the
audit of our financial reporting for the year
ended 30 June 2022.
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FRC corporate reporting review (CRR)
During the year the Group corresponded
with the FRC’s CRR team in connection
with its review of its Annual Report and
Accounts for the year ended 30 June
2023. As is common practice with public
limited companies, the FRC carried out a
review in accordance with Part 2 of the FRC
Corporate Reporting Review Operating
Procedures. The Audit and Risk Committee
was involved in reviewing the Group’s
responses to the points raised by the CRR.
The FRC requested that in disclosing this
engagement we note the limitations of
their review, namely that it was based
solely on its reading of the Annual Report
and Accounts and did not benefit from
a detailed knowledge of the business,
or an understanding of the underlying
transactions entered into. It is also noted
that its review provided no assurance that
the ARA is correct in all material respects
and that the FRC’s role is not to verify
the information provided but to consider
compliance with reporting requirements.
Committee activities
The Committee received regular reports on
the Group’s trading performance, as well as
progress on both the interim and full-year
financial statements. Papers and other
regular updates from both management and
PwC have also been provided to assist the
Committee in assessing whether suitable
accounting policies have been adopted
and appropriate judgements made by
management.
The significant matters considered,
and judgements undertaken during the
financial year, are set out on pages 79 and
80. TheCommittee is satisfied that the
presentation of the financial statements
is appropriate and in accordance with the
Group’s accounting policies.
The Committee concluded that there were
no major concerns that had not been
addressed, that there was no evidence of
systemic control weaknesses and that the
overall control environment was acceptable
for a group of McBride’s size and nature.
Going concern and viability
The Code requires the Board to state
whether it considers it appropriate to adopt
the going concern basis of accounting in
preparing the financial statements and
identify any material uncertainties to the
Company’s ability to do so over a period
of at least twelve months from the date of
approval of the financial statements. Details
of the Group’s going concern statement are
on page 60.
The Committee thoroughly considered
and constructively questioned the forecast
assumptions underlying the going concern
and viability statements presented by
management. The Committee assessed the
prospects of the Company over a three-year
period following a robust assessment of
principal and emerging risks affecting the
Company, the business model, forecasts
and strategic plans. It also reviewed ‘severe,
but plausible downside risk’ stress test
scenarios. Details of the assessment and the
viability statement are set out on page 60.
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Significant judgements and estimates
Matters considered Committee review and conclusions
Impairment reviews Management’s judgement on the need (or otherwise) to take impairment charges for goodwill or fixed assets was reviewed, considering the
tradingperformance of, and the prospects for, each cash-generating unit (CGU).
Details of the impairment reviews performed are outlined in note 12 to the financial statements. The reviews concluded that no impairment
wasrequired.
Management’s judgement on the need (or otherwise) to take impairment charges for the valuation of investments held in subsidiaries was also
reviewed. The review found no indicators of impairment, therefore concluded that no impairment was required.
Going concern status and
longer-term viability statements
In line with typical market practice for most UK companies, the Board considered that an 18-month period from the reporting date constitutes an
appropriate period over which to provide its going concern statement. The Board determined that a three-year period to 30 June 2027 constitutes
anappropriate period over which to provide its viability statement.
Reviews of the Group’s going concern status were carried out by the Committee at both the half-year and full-year ends. Detailed papers setting out
all the relevant considerations were tabled by management and discussed by the Committee together with PwC.
The Committee noted that during 2024 the Group has negotiated a further increase to liquidity by extending invoice discounting facilities to
unencumbered receivables ledgers. The Group’s base case forecasts, based on the Board-approved budget and three-year plan, indicate sufficient
liquidity throughout the going concern and viability review periods to ensure compliance with its banking covenants. Furthermore, the Committee
considered a severe but plausible downside scenario including several downside assumptions relating to lower revenue growth, increases in input
costs, increases in interest rates and a weakening Euro, to stress test the Group’s financial forecasts. If such a severe but plausible downside risk
scenario occurs, the Group would remain compliant with current banking covenants.
After reviewing the Group’s liquidity position, financial forecasts, stress testing of potential risks and uncertainties, and based on the committed
funding facilities, the Directors have a reasonable expectation that the Group has sufficient resources to be able to meet its liabilities as they fall
dueover the three-year period ending 30 June 2027. The risk that the Group would become insolvent during this time was considered remote.
The Committee recommended to the Board that the going concern and viability statements on page 60 be approved.
Exceptional items The Committee reviewed the accounting treatment of exceptional items and agreed that the items listed in note 4 are exceptional in size and
naturein relation to the Group and therefore it is appropriate to disclose them separately.
Quality of earnings Reviews of the quality of the earnings (material items of income or expense) and one-off items included in cash flow were carried out by the
Committee both at the half-year and full-year ends. The Committee agreed that sufficient disclosure has been made in the financial statements.
Tax and treasury matters The Committee continued to review the Group’s Tax Strategy and monitor tax governance and compliance with transfer pricing rules.
The Committee recommended for Board approval the Group’s Tax Strategy for 2024; this can be found in the Corporate Policies section of the
Group’s website at www.mcbride.co.uk. The Committee received updates regarding the tax audit undertaken in France, the findings of HMRC’s
Business Risk Review Plus (BRR+), which confirmed a ‘Low’ overall risk rating and a ‘Low’ rating for all constituent parts of their audit, and an
assessment of the impact on the Group of the new ‘Pillar Two’ rules.
The Committee reviewed the Group’s debt funding strategy and compliance with policies on currency, and interest rate hedging transactions.
TheCommittee continued to monitor performance versus all relevant covenants, to ensure the Group will continue to have sufficient liquidity
andfunding capacity to deliver its strategy.
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Matters considered Committee review and conclusions
Pensions The Committee reviewed the performance of the Robert McBride Pension Fund (‘the Fund’), a defined benefit pension scheme which is operated in
the UK and is closed to new members and future accrual.
At 30 June 2024, the Group recognised a deficit in the scheme of £27.5 million (30 June 2023: £24.7m). The increase in deficit is due to a reduction in
corporate bond yields during the year, leading to a decrease in the discount rate used to value the Fund’s liabilities which in turn led to an increase in
the liabilities and a loss on assets in excess of interest income.
Following the triennial valuation at 31 March 2021, the Company and Trustee agreed a new deficit reduction plan based on the scheme funding deficit
of £48.4 million (further details can be found in the CFO’s Report). The funding arrangements and recovery plan will next be reviewed by McBride and
the Trustee as part of the 31 March 2024 valuation, which has a statutory deadline for signing of 30 June 2025.
The Directors acknowledge the appeal judgement dated 25 July 2024 in the case of NTL v Virgin Media and will be reviewing the implications for the
Group in the coming months.
Task Force on Climate-related
Financial Disclosures (TCFD)
The Committee continues to provide oversight of the Group’s compliance with the TCFD recommendations, assessing the processes used to develop
McBride’s climate-related financial disclosures.
The Committee receives periodic updates from the TCFD Working Group, a cross-functional team established in 2022, which continues to actively
drive the Group’s approach and response to TCFD, raising awareness around the business of climate-related risks and reporting on progress to the
Committee. The TCFD Working Group continues to report into the Risk Council, thereby co-ordinating the adoption of TCFD best practices into the
Group’s risk management processes, whilst also ensuring visibility and oversight of the programme by the Sustainability committee, with which it
continues to work in close collaboration. Over the year, the Committee has reviewed the prioritised plan, including actions and priorities for 2024, and
progress against the four disclosure pillars (governance, strategy, risk management and metrics and targets). The Group’s Climate-Related Financial
Disclosures are set out on pages 36 to 50.
Significant judgements and estimates continued
Risk management framework
The Group continues to identify, evaluate, mitigate and monitor risks facing the business through an established risk management framework, aligned to ISO 31000:2018, and
incorporating both a top-down and a bottom-up approach to identify and assess the Group’s principal risks and operational risks, respectively. The framework was updated and enhanced
in 2022 to formalise a risk taxonomy framework, which continues to be adopted across the Group, thereby helping with the categorisation of risk types to which McBride is exposed,
whilst providing a common language for the management and reporting of risk across the organisation. In addition, a risk appetite framework continues to operate effectively, helping the
organisation with the assessment, communication, escalation and reporting of principal risks, within the context of determining the amount of risk that the Board is prepared to accept,
tolerate or be exposed to at any point in time.
Responsibility for the ongoing review, reporting oversight and monitoring of risks lies with a cross-functional Risk Council made up of senior employees from across the business.
The Council continues to act as a focal point for the exploration and evaluation of strategic and emerging risks faced by the Group as it pursues its strategic objectives. It provides
regular reporting on KRIs to the Executive Committee and makes recommendations for appropriate mitigation strategies in line with the Group’s risk appetite. It also helps improve risk
awareness, conduct a more joined-up discussion on risk and facilitates the consideration of risk in key decision making, by actively driving and supporting the embedding of the Group’s
risk management framework across the organisation. During 2024, the Risk Council has also been overseeing the Group’s crisis management framework, ensuring policies, procedures,
roles, responsibilities and mitigation measures are embedded within the overall risk management framework, with updates provided to the Committee on an ongoing basis.
The principles of risk management continue to be embedded into the day-to-day operations of the divisions and corporate functions, who remain primarily responsible for identifying and
evaluating key risks in their functional, operational and geographical domains, and escalating the same to the Risk Council. The Committee was responsible for monitoring and challenging
the adequacy of the Company’s procedures in respect of business risk identification, assessment, monitoring and reporting. On behalf of the Board, the Committee specifically considered
those risks and uncertainties which were deemed significant, whilst seeking comfort from management on mitigating factors being used to manage, monitor and address these.
TheGroup’s current principal risks and uncertainties can be found on pages 53 to 59.
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Risk management framework
continued
The Committee has also continued to be
responsible for ratifying the Risk Council’s
Terms of Reference and is provided with
regular updates of matters considered by
the Risk Council, further information on
which can be found on page 81.
Risk Council
• Group-wide cross-functional forum for
the discussion, monitoring and oversight
of risks and controls.
• Explores and evaluates strategic,
significant and emerging risks.
• Provides oversight and monitoring of the
Group’s crisis management framework.
• Accesses internal and external
knowledge, expertise and insight.
• Periodically reviews KRIs submitted
by the business, before reporting and
escalating the same to the Executive
Committee.
• Supported by various risk forums
focusing on the identification,
assessment and monitoring of risks
and controls within each division and
function.
Executive Committee
• Reviews risk registers from across
individual divisions and functions.
• Ratifies the assessment and evaluation of
risks conducted by the Risk Council.
• Agrees actions to mitigate key business
risks that are escalated to it.
• Ensures risk management and crisis
management are embedded across
thebusiness.
• Defines and establishes the risk appetite
of the Group.
• Considers KRIs escalated by the Risk
Council.
• Works with the business to ensure
adequate and effective risk mitigation
actions are in place for risks outside
acceptable thresholds.
Audit and Risk Committee
• Supports the delivery of the Group’s
strategy in the context of the risk
management framework.
• Ensures actions to mitigate risks have
been developed and designed with
appropriate ownership and timescales.
• Monitors the timely and effective
completion of risk mitigation actions,
inline with agreed timelines.
• Monitors and reviews key financial,
non-financial and internal controls, as
well as the independent audit process
and report.
• Receives and reviews reports from the
Risk Council relating to principal risks,
the status of crisis management plans
and actions and the ongoing monitoring
of KRIs.
• Discusses and confirms the risk trend and
overall effectiveness of the risk control
and monitoring environment.
• Considers whether any additional control
improvement actions are required.
The Board
• Monitors and reviews the effectiveness
of the Group’s risk management and
internal control systems.
• Reviews and approves the risk appetite
of the Group.
• Reviews reports from the Audit and Risk
Committee on risk management and
internal controls.
Risk management and internal
controlenvironment
The Group’s risks are identified and
managed through various activities,
including:
• business risk reviews;
• major project and investment reviews;
• strategic risk assessments and specific
functional risk mapping activities;
• ongoing risk identification, ‘horizon
scanning’ and evaluation discussions at
individual functional and divisional levels,
and by the Risk Council;
• year-end self-assessment questionnaires
supporting key internal control
procedures, with an in-built control
validation, review and reporting
mechanism;
• a quarterly follow-up process to review
outstanding internal control actions; and
• a programme of audits within and across
individual processes, functions and
sites by various internal stakeholders,
including Internal Audit and other
assurance providers within the business.
The responsibility for reviewing the
effectiveness of the Group’s systems of
internal control has been delegated by the
Board to the Audit and Risk Committee.
This includes reviewing all material financial,
operational and compliance controls, key
corporate policies, the financial reporting
framework and processes, the preparation
of the Group’s consolidated financial
statements, and also the overall risk
management system in place throughout
the year under review, up to the date of this
Annual Report.
The Committee receives regular reporting
from senior management during the year
and has concluded that there continues
to be a robust and effective control
environment in place. The Committee
also confirms that it has not been advised
of any failings, breaches or weaknesses
which it considers to be significant during
the financial year, and which are likely to
have had a material effect on the Group’s
financial performance.
Key control procedures undertaken by the
Group during the year included:
• monthly consolidated management
accounts reviewed by the Executive
Committee;
• monthly reporting on commercial,
operational, financial and non-financial
KPIs, with performance discussed at a
divisional, functional and Group level;
• regular updates to the Board on the
Group’s financial performance and
position against targets;
• a comprehensive annual budgeting
process, reviewed and approved by
theBoard;
• ongoing monitoring of the Group’s
liquidity and net debt position;
• monthly reviews of working capital
balances;
• authorisation and control procedures in
place for capital expenditure and other
major projects, with post-completion
reviews to highlight issues and learnings,
to improve future performance and
delivery; and
• regular meetings and site visits with
insurance and risk advisers to discuss
risk assessments, safety audits and
performance against agreed objectives.
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Risk management and internal
controlenvironment continued
The Group also has an Internal Audit
function that provides independent
assurance on the adequacy and
effectiveness of the Group’s risk
management framework and is responsible
for overseeing and monitoring the effective
design and operation of internal control
processes across the Group. Further details
are set out below.
Recommendations arising from the
independent auditors’ internal controls
report have been reviewed by the
Committee and actions to implement
enhanced policies, processes and
procedures undertaken by management
over the course of the year have been
discussed and agreed by the Committee
every six months.
Based on the effective conduct of its
activities, the Audit and Risk Committee
has enabled the Board to confirm that a
robust assessment of the Company’s risk
management and internal controls has been
carried out and that no significant failings
or weaknesses have been identified. The
assessment covered financial, operational
and compliance controls together with
financial reporting processes.
Internal Audit
The Internal Audit function provides a
range of financial, operational, regulatory
and compliance-driven audit activities,
performed by our independent, experienced
and qualified in-house internal audit
professionals, in conjunction with skilled
and experienced in-house personnel, at a
central functional or a local divisional level,
as and where necessary and appropriate.
By discharging its duties in a robust and
effective manner, the Internal Audit function
provides assurance to the Committee that
the overall control environment and specific
control activities across the Group are
adequate, effective and fit for purpose.
Regular meetings are held between the
Head of Internal Audit and the Chair of
the Audit and Risk Committee, and the
Committee actively engages the Internal
Audit function to determine the extent
to which the overall internal control
environment is adequate, appropriate
and effective and how it can be enhanced
further by considering and evaluating
specific process and control enhancements.
At the start of each financial year, the
Committee reviews and agrees the annual
Internal Audit Plan. This is based on
confirming its alignment with the Group’s
strategic priorities and key current and
emerging risks, whilst also ensuring there
is appropriate focus on essential, integral
and ongoing compliance monitoring
requirements. There are in-built mechanisms
to ensure that the Internal Audit Plan
remains flexible and agile at all times,
toaddress any new and emerging risks that
may arise throughout the year, requiring
prompt and timely consideration by the
Internal Audit function.
The Committee considers the results
of any audits undertaken and the
adequacy, effectiveness and timeliness of
management’s response to matters raised
on an ongoing basis through the year.
Any recurring themes across processes,
functions or locations are challenged and
considered. Such themes, along with any
significant or unexpected audit findings,
could result in specific follow-up audits or
separate assurance reviews, informing and
influencing the scope of work undertaken in
the Internal Audit Plan, both for the current
as well as for future years.
The Committee continues to be satisfied
that the Internal Audit function has
sufficient and appropriate resources at
its disposal and provides a critical and
effective assurance role to the organisation.
Additionally, the Committee notes that
in 2025 management will commission an
independent review of the impartiality and
effectiveness of the Internal Audit function.
Fair, balanced and understandable
Having given due and full consideration
to all the matters referred to above, the
Committee is satisfied that the financial
statements present a fair, balanced
and understandable view, and provide
shareholders with the necessary information
to assess the Group’s position, performance,
strategy and business model, and has
undertaken to report accordingly to
theBoard.
The Audit and Risk Committee Report
wasapproved by the Board on
16September 2024 and signed on
its behalf by:
Alastair Murray
Chair of the Audit and Risk Committee
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Strong business
performance during
2024 has driven higher
incentive outcomes for
executives.
Elizabeth McMeikan
Chair of the Remuneration Committee
Remuneration Committee Report
Annual statement
Dear shareholder
On behalf of the Remuneration Committee,
I am pleased to present the Directors’
Remuneration Report (‘the Remuneration
Report’) for the year ended 30 June
2024. I am very grateful for the strong
support received from our shareholders
for the Directors’ Remuneration Policy
(the‘Policy’), with 93.7% of votes cast in
favour of the Policy atthe Company’s AGM
in 2023. 2024 was the first year of our new
Policy and I summarise below how the
business performed during the year, the
remuneration outcomes for 2024 and how
we intend to operate the Policy in 2025.
Performance of the business in 2024
2024 has been a year of significant growth
for McBride, with the Group delivering
excellent financial and operational
performance. The business has built on
the solid recovery reported in 2023 and
all five divisions generated profitable
growth in 2024. This is a testament to our
specialist teams and their ability to execute
on the strategy as outlined in the March
2024 Capital Markets Day. The positive
momentum in 2024 has been a product of
the consumer shift to private label across
all geographies, new business wins, our
divisional teams building closer customer
relationships and the expansion of private
label contracts. This, in turn, has driven a
significant transformation and has led to
increased volumes, revenue and profit and
reduced our net debt.
The Group saw revenue growth of
5.2%to £934.8 million and upgraded profit
expectations were delivered, with adjusted
operating profit increasing to £67.1 million
(2023: £13.5m). Furthermore, net debt, a
key metric for us, reduced by £35.0 million
to £131.5 million, which brings our net
debt/EBITDA to 1.5x, and is closer to our
<1.5x ambition as outlined at the Capital
MarketsDay.
The exceptional financial performance
was combined with strong strategic
progress against the key elements of our
Transformation programme. The annual
bonus and long-term incentive plan (LTIP)
outcomes reflect the transformation
delivered.
Incentive outcomes and base salary
increases
At the start of 2024 the Committee agreed
annual bonus targets and these were based
on our key financial metrics, adjusted EBITA
and net debt, as well as the delivery of
strategic objectives. The targets considered
internal and external expectations at
the time. Reflecting the strong financial
performance of the Group and strategic
progress, a bonus of 98% of maximum
wasearned.
• 2024 Annual Bonus:
• Group adjusted EBITA (60%): The
Group delivered EBITA of £67.1 million,
which was well above the maximum
target of £33.6 million set for the year.
Therefore, this part of the bonus was
achieved in full.
• Group net debt (20%): The net
debt measure was based on the
December 2023 and June 2024
period end positions. Reflecting the
high level of profitability and cash
generated during the year, net debt
as at 31December 2023 was £145.7
million and as at 30 June 2024
was £131.5million. Overall, net debt
reduced by £35.0 million over the
course of the year. Both the December
2023 and June 2024 outcomes were
ahead of the maximum targets set and
therefore this part of the bonus was
also achieved in full.
• Individual performance (20%):
Thenon-financial performance
measures were based on objectives
common to both the CEO and
CFO and individual objectives. The
outcome for both the CEO and CFO
was 18% out of 20% and full details
are provided in the Annual Report on
Remuneration.
• The overall bonus outcome was
98.0%of maximum for both the CEO
and CFO.
Further details of the bonus targets and a
fuller description of the strategic objectives
are set out in the Annual Report on
Remuneration.
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Annual statement continued
Incentive outcomes and base salary
increases continued
We granted LTIP awards to the Executive
Directors and other senior management in
2021. These awards were based on basic
adjusted earnings per share (EPS) growth
and return on capital employed (ROCE),
each with an equal weighting and measured
to 30 June 2024. The EPS targets were
achieved in full, which reflects the strong
business turnaround in profit as set out
earlier. Notwithstanding the financial
outperformance in 2024, the ROCE metric
was not achieved despite delivering ROCE
of 33.5% in 2024.
• 2021 LTIP awards:
• EPS (50%): Reflecting the high profit
delivery in 2024, EPS of 22.2 pence
was above the maximum of 19.0 pence
and therefore this part of the award
will vest in full.
• ROCE (50%): Whilst the Group’s
ROCE was 33.5% in 2024, average
ROCE over the three-year period was
below the threshold target of 11.6%
and therefore this part of the award
will lapse.
• The overall vesting outcome was 50%
of maximum.
Taken as a whole, the Committee is satisfied
that the overall bonus and LTIP outcomes
for the year ended 30 June 2024 are a fair
reflection of the strong recovery of the
Group and, accordingly, we have not applied
any discretion to this year’s outturns.
As per our existing custom and practice,
base salaries were reviewed during the year
in the context of the Executive Directors’
performance and the wider workforce
increase.
The CEO and CFO received increases of 3%,
bringing their annual salaries to £470,632
and £309,000 respectively. The percentage
increase was in line with that provided
to other Executive Committee members
and compared to a tiered UK workforce
increase ranging from 3% to 6%. The next
salary review is scheduled to be undertaken
later this year and will be effective from
1January2025.
Remuneration for 2025
The Committee’s approach to remuneration
is underpinned by remuneration principles
which are designed to ensure that executive
remuneration:
• is transparent in respect of elements of
remuneration quantum, the rationale for
targets and performance outcomes;
• is simple to ensure that remuneration
structures act as intended and are clearly
understood;
• discourages inappropriate behaviours or
excessive risk-taking through clawback
provisions and holding periods;
• is predictable through the use of a range
of outcomes and individual caps;
• is aligned to the Group’s strategy and the
long-term sustainable development of
the business; and
• is aligned to the Company’s purpose,
values and strategy and to the Group’s
culture.
These principles apply equally to those of
senior management and are embedded
in the Policy. The Policy and last year’s
Directors’ Remuneration Report received
93.7% and 99.8% support respectively
at the Company’s AGM in 2023 and, as a
reminder, the main changes to the Policy
forExecutive Directors included:
• an increase to the restricted stock unit
(RSU) award from 15% to 30% of salary;
• a reduction to the maximum LTIP award
from 125% to 100% of salary for the CEO
and from 110% to 90% for the CFO; and
• a strengthening of the post-cessation
shareholding requirement so that
shares must be held for two years
post-cessation.
The Committee has considered carefully
how the Policy should be applied in 2025,
being the second year of our three-year
Policy, and has determined that there will
beno substantive changes:
• a base salary review will be undertaken
during 2025 with increases, if any, to
take into account the general workforce
increases and to be effective from
1January 2025;
• an RSU grant of 30% of salary will be
made to each of the CEO and CFO;
• annual bonuses will be based 60% on
Group adjusted EBITA, 20% on net
debt reduction as at 30 June 2025 and
20%on personal objectives; and
• the 2024 LTIP awards will be granted at
100% of salary for the CEO and 90%of
salary for the CFO. The measures will
be 50% on cumulative EPS and 50% on
average annual ROCE.
I would like to take this opportunity to thank
shareholders for their strong support for our
Policy and I look forward to your support
on the Directors’ Remuneration Report
resolution being tabled at the 2024 AGM.
Elizabeth McMeikan
Chair of the Remuneration Committee
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Directors’ Remuneration Policy
This Remuneration Report has been prepared in accordance with the provisions of the Companies Act 2006, Schedule 8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended (‘the Regulations’), the UK Corporate Governance Code 2018 and the Financial Conduct Authority’s Listing Rules and takes into
account the accompanying Directors’ Remuneration Reporting Guidance and the relevant policies of the shareholder representative bodies. The Remuneration Report is split into three
sections: the Remuneration Committee Chair’s annual statement, a summary of the Directors’ Remuneration Policy (which was approved by shareholders in 2023) and the Annual Report
on Remuneration.
The Policy was approved by shareholders at the AGM held on 20 November 2023 and is effective for three years from the date of approval. In this Remuneration Report we set out
a summary of the key elements of the Policy. The full Directors’ Remuneration Policy is available on McBride’s website (www.mcbride.co.uk) under the ‘Our Board and Corporate
Governance’ section.
Policy table
The following table summarises each element of our Policy for the Executive Directors, explaining how each element operates.
Element: Executive Director base salary
Purpose and link to strategy • To ensure the Group is able to recruit and retain high-calibre executives.
Operation • Salaries are set by the Committee considering individual experience, performance, skills and responsibilities, prevailing market conditions
(byreference to companies of a similar size and complexity and other companies in the same industry) and internal relativities.
• Salaries are paid monthly in arrears by bank transfer and are normally reviewed annually with any changes effective from January.
Maximum • Details of current salaries of the Executive Directors are detailed on page 91.
• Salaries are normally reviewed annually and may be increased each year. There is no maximum, but increases will generally be in line with those
awarded to the Group’s workforce, as well as reflective of the overall financial performance of the Group.
• Increases beyond this may be awarded in limited circumstances, such as where there is a change in responsibility, experience or a significant
change in the scale of the role and/or size, value and/or complexity of the Group.
Performance measures • Not applicable.
Element: RSUs
Purpose and link to strategy • To ensure the Group is able to recruit and retain high-calibre executives.
• To provide enhanced alignment to shareholders.
Operation • Annual awards, as part of fixed pay.
• Awards will normally vest three years from the date of grant subject to continued employment.
• Awards will be subject to a two-year post-vesting holding period, less any shares required to be sold to cover withholding tax.
• Not pensionable, or ‘salary’, for the purposes of bonus, LTIP or payments for loss of office.
• A ‘dividend equivalent’ provision is also available on the RSU shares at the discretion of the Committee, enabling dividend equivalent payments
tobe paid, in cash or shares, on any shares that vest.
• Subject to malus and clawback
(1)
.
Maximum • Awards of up to 30% of salary may be granted annually.
Performance measures • Not applicable.
(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.
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Element: benefits
Purpose and link to strategy • To provide market-competitive benefits, in line with those provided to other Group employees.
Operation • Benefits may include private medical insurance, sick pay, a fully expensed car (or equivalent cash allowance), disability and life assurance cover.
• Some benefits may be provided in the case of relocation, such as removal expenses, and in the case of international relocation might also include
such items as cost of accommodation, children’s schooling, home leave, tax equalisation and professional advice etc.
• The Company has the ability to reimburse the tax payable (grossed up) on any business expenses captured as taxable benefits.
Maximum • The benefit provision is reviewed periodically. No maximum level is set on the value or cost of benefits provided.
Performance measures • Not applicable.
Element: pension
Purpose and link to strategy • Retirement benefits are regarded as an important element of the Group’s basic benefits package to attract and retain talent.
Operation • Membership of the Company’s defined contribution, or similar, pension scheme, or in agreed circumstances, a cash allowance in lieu of pension.
Maximum • Up to 8% of base salary, or such other amount in line with that available to the majority of the UK general workforce, from time to time.
Performance measures • Not applicable.
Policy table continued
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Element: annual bonus
Purpose and link to strategy • The purpose of the annual bonus is to incentivise delivery of the Group’s financial and non-financial objectives and to ensure that Executive
Directors and senior executives are fairly rewarded for their contribution to the success of the Group.
• To provide alignment of Directors’ interests to the interests of shareholders through enhanced shareholdings.
Operation • Performance conditions are set independently by the Committee at the start of each year.
• Performance criteria include the financial targets of the Group, as agreed by the Board, and specific targets based on clear and measurable
objectives that underpin, and are key to the achievement of, the Group’s strategy.
• Personal objectives are reviewed by the Committee to ensure they contribute to the strategic aims of the Group.
• To further align the interests of Directors with shareholders, 30% of the bonus is paid via the DBP.
• Executive Directors can voluntarily invest any remaining bonus, up to a maximum of 70% of salary, into the DBP. Invested sums will be matched
with additional shares on a 1:2 ratio (i.e. Executive Directors receive two additional shares from the Company for every one share their invested sum
purchases).
• Awards granted under the DBP vest after three years and are normally subject to the Director remaining employed by the Group at the end of
thatperiod.
• A ‘dividend equivalent’ provision is also available on the DBP shares at the discretion of the Committee, enabling dividend equivalent payments to
be paid, in cash or shares, on any shares that vest.
• All bonus payments are at the ultimate discretion of the Committee and the Committee retains an overriding ability to ensure that overall bonus
payments reflect its view of corporate performance during the year when determining the final bonus amount to be awarded.
• Both the cash and deferred share elements of the annual bonus are subject to malus and clawback
(1)
.
Maximum • 100% of base salary.
Performance measures • At least 80% of the bonus will be assessed against a sliding scale of challenging and stretching financial performance targets, with no more than
20% of the bonus being based on the achievement of specific and measurable personal targets. Irrespective of achievement against the personal
targets, no bonus is payable unless a minimum level of financial performance is achieved. Targets are set considering our financial and strategic
plans for the business.
• The Committee retains the ability, in exceptional circumstances, to adjust the targets and/or set different measures and alter weightings for
the annual bonus if certain events occur, such as a material divestment of a Group business, which cause it to determine they are no longer
appropriateand a change is required to ensure that they achieve their original purpose and are not materially less difficult to satisfy.
(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.
Policy table continued
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Element: LTIP
Purpose and link to strategy • The objectives of the LTIP are to align the long-term interests of shareholders and management and reward achievement of long-term,
stretchingtargets.
• Awards are made to Executive Directors and to senior executives who have a significant influence over the Group’s ability to meet its strategic
objectives. Whilst it is not a requirement of the LTIP, senior executives are encouraged to use the scheme to increase their share ownership in
theCompany.
Operation • Annual awards are granted, subject to individual performance and Committee discretion. The awards vest after three years subject to continued
employment and the satisfaction of challenging performance conditions. A two-year post-vesting holding period applies to all shares (less any
shares required to be sold to cover withholding tax) that vest.
• LTIP awards are subject to malus and clawback
(1)
.
• A ‘dividend equivalent’ provision is also available on the LTIP shares at the discretion of the Committee, enabling dividend equivalent payments
tobe paid, in cash or shares, on any shares that vest.
• The Committee will operate the LTIP according to its respective rules and in accordance with the Listing Rules and HMRC rules, where relevant.
Maximum • 100% of salary for the Chief Executive Officer and 90% of salary for the Chief Financial Officer and any other Executive Director in any financial
year. The Committee reviews the quantum of awards annually to ensure they are in line with market levels and appropriate given the performance
of the individual and the Company.
• Actual award levels to Executive Directors are set out in the Annual Report on Remuneration.
Performance measures • Vesting of awards would normally be based on key financial measures of performance (such as, but not limited to, EPS and ROCE), selected by
the Committee and measured over a period of no less than three financial years. EPS is a measure of the Company’s overall financial success and
ROCE is a key performance indicator for the Group. In the first year of operation of the Policy, half of the award was subject to an EPS performance
condition and the remaining half was subject to a ROCE performance condition.
• Different performance measures and/or weightings may be used for future awards to help drive the strategy of the business.
• Targets are set by the Committee for each award on a sliding scale basis. No more than 25% of awards will vest for threshold performance,
withfullvesting taking place for equalling or exceeding maximum performance conditions. Targets are set considering the prevailing strategy
andlong-term plans.
• The Committee retains the ability, in exceptional circumstances, to adjust the targets and/or set different measures and alter weightings for the
LTIP if events occur, such as a material divestment of a Group business, which cause it to determine they are no longer appropriate and a change
isrequired to ensure that they achieve their original purpose and are not materially less difficult to satisfy.
(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.
Policy table continued
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Element: Non-Executive Director fees
Purpose and link to strategy • To ensure the Group is able to attract and retain experienced and skilled Non-Executive Directors able to advise and assist with establishing
andmonitoring the strategic objectives of the Company.
Operation • The remuneration of the Chairman and the Non-Executive Directors is payable in cash fees.
• They are not eligible to participate in bonus or share incentive schemes.
• Their services do not qualify for pension or other benefits.
• Expenses incurred for advice in respect of UK tax returns for non-UK Non-Executive Directors may be reimbursed.
• Fees are paid monthly and reasonable expenses are reimbursed where appropriate. Tax may be reimbursed if these expenses are determined to be
a taxable benefit.
• Fee levels are determined by the full Board with reference to those paid by other companies of similar size and complexity, and to reflect the
amount of time the Non-Executive Directors are expected to devote to the Group’s activities during the year (and may include additional ad-hoc
payments to reflect increased time commitments over a short period).
• A supplementary fee is also paid to Committee Chairs and to the Senior Independent Director to reflect their additional responsibilities.
• An additional allowance of up to £50,000 per annum may be payable to the Chairman to compensate for the additional time commitment involved
in travelling both to attend Board meetings and to generally carry out the duties as Chairman.
• An additional allowance of up to £15,000 per annum may be paid to Non-Executive Directors based overseas for any additional time commitment
involved in travelling both to attend Board meetings and to generally carry out the duties as a Non-Executive Director.
Maximum • Details of the current fees for the Chairman and Non-Executive Directors are set out on page 92. The aggregate annual sum for Non-Executive
Director fees cannot exceed £600,000 per annum. The Company does not intend to seek shareholder approval for any increase to this maximum
in the short to medium term.
Performance measures • No element of the Chairman’s or the Non-Executive Directors’ fees is performance related.
Element: share ownership guidelines/requirements
Purpose and link to strategy • Executive Directors and other senior executives are required to build and maintain a shareholding in the Company as this represents the best
wayto align their interests with those of shareholders. Levels are set in relation to earnings and according to the post held in the Company.
• Non-Executive Directors are encouraged to build and maintain a shareholding.
Operation • The expectation is that executives will build up to these levels over a period of time, through: (i) retaining shares received under the Company’s
incentive arrangements, net of sales to settle tax; and/or (ii) shares purchased in their own right.
• Vested but unexercised LTIP awards, unvested RSU awards and deferred shares will count towards this requirement, on a net of tax basis.
• The Executive Directors are also required to maintain their shareholding requirement or the actual shareholding on departure, if lower, for a
minimum of two years after cessation of employment. The post-cessation shareholding obligation will apply to shares acquired (net of tax) under
awards granted under this and future policies. Shares purchased from the executives’ own funds would not be included.
Maximum • There is no maximum. However, Executive Directors are required to build and maintain a shareholding equivalent to 200% of salary, or 300% of
salary in the case of the CEO. Other senior executives are required to build and maintain a shareholding equivalent to 50% of salary.
• Newly appointed Executive Directors would normally be required to achieve the required shareholding within a five-year period of appointment to
the Board.
• The guideline for Non-Executive Directors is to hold shares equivalent to 100% of their annual fee.
Performance measures • Not applicable.
Policy table continued
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Directors’ Remuneration Policy continued
Executive Directors’ service contracts
Service contracts stipulate that the Executive Directors will provide services to the
Company on a full-time basis. Copies of the Executive Directors’ service contracts are
available for inspection at the Company’s registered office.
Executive Director
(1)
Date of service
contract
Notice
period
(2)
Chris Smith 11 Jun 2020 6 months
Mark Strickland 4 Jan 2021 6 months
(1) All Directors are re-elected on an annual basis.
(2) By either the Company or the Executive Director. In exceptional circumstances, notice periods of up to
a maximum of twelve months may be offered to newly recruited Directors. The service contract is of an
unlimited duration.
Non-Executive Directors’ letters of appointment
Set out below is information regarding the dates of the letters of appointment and notice
periods for the Chairman and the Non-Executive Directors.
Copies of the letters of appointment are available for inspection at the Company’s
registered office.
Director
(1)
Latest letter of
appointment
Date first
appointed
to the Board
Notice
period
(2)
Jeff Nodland 21 Jun 2019 26 Jun 2019 3 months
Elizabeth McMeikan 14 Nov 2019 14 Nov 2019 3 months
Alastair Murray 27 Aug 2024 2 Aug 2021 3 months
Regi Aalstad 17 Feb 2022 14 Mar 2022 3 months
(1) All Directors stand for re-election on an annual basis at the AGM.
(2) Terminable at the discretion of either party. Appointments may be terminated without compensation
in the event of them not being re-elected by shareholders or otherwise in accordance with the Articles.
Appointments are of an unlimited duration subject to note (1) above in the case of Jeff Nodland and
Elizabeth McMeikan. In the case of Alastair Murray and Regi Aalstad, each Non-Executive Director’s
appointment will continue for an initial three-year term, subject to note (1). The appointment letters state
that Non-Executive Directors are typically expected to serve two three-year terms but may be invited by the
Board to serve for an additional period. Alastair Murray is now in his second three-year term.
Remuneration performance scenarios 2025
The Executive Directors’ remuneration packages comprise both core fixed elements (base
salary, RSUs, pension and benefits) and performance-based variable pay. The charts
opposite illustrate the composition of the Chief Executive Officer’s and Chief Financial
Officer’s remuneration packages (£’000) at minimum, target, maximum and maximum
+50% share price growth for 2025 in line with policy.
Minimum
Maximum
Target
Fixed pay
2,000,000
200,000
1,200,000
400,000
1,400,000
1,800,000
1,600,000
Annual bonus Long-term incentive
0
800,000
1,000,000
600,000
Maximum +50%
share price growth
£675,419
36.5%
38.1%
25.4%
41.8%
29.1%
29.1%
20.5%
59.0%
20.5%
100.0%
£1,146,051
£1,851,998
CEO
£1,616,682
Minimum
Maximum
Target
Fixed pay
2,000,000
200,000
1,200,000
400,000
1,400,000
1,800,000
1,600,000
Annual bonus Long-term incentive
0
800,000
1,000,000
600,000
Maximum +50%
share price growth
£445,140
38.0%
35.6%
26.4%
43.1%
27.0%
29.9%
20.9%
60.3%
18.8%
£738,690
£1,171,290
100.0%
CFO
£1,032,240
Notes:
(1) Fixed pay comprises salary for the financial year as at 1 July 2024, RSUs, benefits and cash allowance in lieu
of pension.
(2) Bonus includes both the cash element and the deferred share element, but it is assumed that no voluntary
deferral takes place and therefore no matching award is made.
(3) Assumptions when compiling the charts are:
• minimum = fixed pay only (i.e. salary, RSUs face value at grant (i.e. 30% of annual salary), benefits and
pension);
• target = fixed pay plus 50% of annual bonus payable and 50% vesting of LTIP;
• maximum = fixed pay plus 100% of annual bonus payable and 100% of LTIP vesting (based on a face value
of 100% of salary for the CEO and 90% of salary for the CFO); and
• maximum +50% share price growth = fixed pay plus 100% of annual bonus payable and 100% of LTIP
vesting at a 50% higher share price than when the LTIP was awarded.
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Annual Report on Remuneration
This part of the Remuneration Report comprises five sections:
Subject Item
Remuneration for2024 1. Single total figure of remuneration (audited)
2. Annual bonus outcomes for 2024 (audited)
3. LTIP outcome for the year ended 30 June 2024
(audited)
4. Payments for loss of office
5. Payments to former directors
Directors’ share
ownership and share
interests
6. LTIP, RSU and deferred bonus awards granted in 2024
7. Outstanding LTIP, RSU and deferred bonus awards
8. Statement of Directors’ shareholdings and share
interests
Subject Item
Pay comparison 9. Percentage change in Directors’ remuneration
versusemployee pay
10. CEO pay ratio
11. CEO single figure history and TSR performance
12. Relative importance of spend on pay
Remuneration Committee
membership, governance
and voting
13. Remuneration Committee and advisers
14. Statement of shareholder voting
Implementation of
Remuneration Policy
in2025
15. Application of the Remuneration Policy for the 2025
financial year
Remuneration for 2024
1. Single total figure of remuneration (audited)
Executive Directors
The table below sets out a single total remuneration figure for the position of the Executive Directors in office for the 2024 financial year:
Fixed remuneration Performance-related remuneration Total
Base
salary
(1)
£’000
RSU
(2,3)
£’000
Benefits
(4)
£’000
Pension
(5)
£’000
Total fixed
remuneration
£’000
Annual
bonus
(6)
£’000
LTIPs
(7)
£’000
Total variable
remuneration
£’000 £’000
Chris Smith
2024 464 141 26 37 668 454 455 909 1,577
2023 448 66 24 36 574 425 — 425 999
Mark Strickland
2024 305 80 19 24 428 298 241 539 967
2023 282 40 17 23 362 267 — 267 629
(1) The base salary review was undertaken during the financial year with changes effective from 1 Jan 2024. The annual base salaries for the CEO at 1 Jul 2023 and 1 Jan 2024 were £456,924 and £470,632, respectively. The annual
base salaries for the CFO at 1 Jul 2023 and 1 Jan 2024 were £300,000 and £309,000, respectively.
(2) RSU grants have been included for Chris Smith as follows: (i) a grant made on 13 Jun 2022, with 347/365ths included in 2023; (ii) a grant made on 12 June 2023, with 19/366ths included in 2023 and the remaining 347/366ths
included in 2024; (iii) a grant made on 20 Nov 2023 (deemed grant date of 12 Jun 2023), with the full value of this included in 2024; and (iv) a grant made on 11 Jun 2024, with 19/365ths included in 2024 and the remaining
346/365ths to be included in 2025. The additional Nov 2023 grant relates to the increased Policy award level from 15% to 30% of salary. All grants are valued using the closing share price for the day prior to the date of grant.
(3) RSU grants have been included for Mark Strickland as follows: (i) a grant made on 9 Sep 2021, with 2/12ths included in 2023; (ii) a grant made on 3 Oct 2022, with 10/12ths included in 2023 and the remaining 2/12ths included
in 2024; (iii) a grant made on 20 Sep 2023 with 10/12ths included in 2024 and the remaining 2/12ths to be included in 2025; and (iv) a grant made on 20 Nov 2023 (deemed grant date of 20 Sep 2023), with 8/10ths included in
2024 and 2/10ths of this to be included in 2025. All grants are valued using the closing share price for the day prior to the date of grant.
(4) Benefits consist of the provision of a company car (or cash equivalent), private healthcare, disability insurance and life cover.
(5) The pension figure represents the value of the Company’s pension contribution (8% of salary) taken as a cash payment in lieu.
(6) 30% of the bonus for each of the Executive Directors will be deferred in shares for three years.
(7) The LTIP value for 2024 is the value of the awards granted on 9 September 2021 which are due to vest at 50% of maximum. The vesting date for these awards is 9 September 2024, but as the Company will be in a closed
period, these awards will vest after the announcement of the full-year results. The value of the awards has been shown using the share price on 9 September 2024: 127.0 pence.
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Remuneration for 2024 continued
1. Single total figure of remuneration (audited) continued
Non-Executive Directors
2024 2023
Base
fee
£’000
Committee
Chair/
SID fee
£’000
Benefits
(1)
£’000
Total
£’000
Base
fee
£’000
Committee
Chair/
SID fee
£’000
Benefits
(1)
£’000
Total
£’000
Jeff Nodland
(2)
210 — 53 263 200 — 60 260
Steve Hannam
(3)
— — — — 19 3 — 22
Igor Kuzniar
(4)
— — — — 46 — 1 47
Elizabeth McMeikan
(5)
53 17 — 70 50 13 2 65
Alastair Murray 53 9 — 62 50 9 1 60
Regi Aalstad 53 — 1 54 50 — 1 51
(1) Benefits comprise reimbursement of expenses on a gross of tax basis incurred by Non-Executive Directors in the course of carrying out their roles which are considered by HMRC to be taxable.
(2) Jeff Nodland received a travel allowance of £50,000 during the year.
(3) Steve Hannam resigned from the Board on 16 November 2022.
(4) Igor Kuzniar resigned from the Board on 31 May 2023.
(5) Elizabeth McMeikan was appointed Senior Independent Director on 17 November 2022.
2. Annual bonus outcomes for 2024 (audited)
For the 2024 financial year, the maximum bonus opportunity for the Executive Directors was 100% of base salary. 80% of bonus was based upon financial performance and 20% of bonus
for performance against demanding specific measurable personal objectives. Based on the outcomes of the financial and personal elements (as set out below), the Executive Directors
both received a total bonus of 98% of salary (representing 98% of the maximum bonus opportunity).
Financial element outcomes
The financial element of the bonus consisted of a Group adjusted EBITA target (60% of bonus) and Group net debt targets (20%), as set out below:
Performance targets
Actual
performance
£m
Pay-out
(% of salary)
Threshold
£m
Target
£m
Stretch
£m
Group adjusted EBITA
(1,2)
22.5 30.0 33.6 67.1 60%
Group net debt
(3)
At 31 December 2023 168.1 164.8 159.9 145.7 10%
At 30 June 2024 164.1 160.9 156.1 131.5 10%
(1) Excludes amortisation of intangibles and exceptional costs.
(2) EBITA is calculated on a straight-line basis between threshold and target and between target and stretch.
(3) Group net debt is measured at the end of the half year and full year.
Both the EBITA and net debt targets were achieved in full, resulting in a pay-out of 80% of maximum (or 80% of salary).
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2. Annual bonus outcomes for 2024 (audited) continued
Personal element outcomes
Both Executive Directors were set two personal objectives to be measured as a whole, as follows:
Objective Achievement
Shared objective (10%) Deliver Year 2 (2024) benefits of transformation
plans. Ensure the crucial backbone SAP project
and the critical customer impacting programmes of
Commercial Excellence and Service Excellence remain
on track, to timetable and adequately resourced to
deliver the medium-term benefits as included in the
Transformation programme £50 million ambition.
• Delivery of benefits achieved (in 2024).
• SAP on track.
• Commercial Excellence on track with no major blockages or concerns.
• Service Excellence largely delivered.
80% pay-out was based on delivering financial benefits as set out above and delivery
against the three programmes (SAP, Commercial and Customer) ahead of plan.
Chris Smith (10%) Sustainability: Progress Scope 3 approval and progress
towards establishing eventual Net Zero ambition
(e.g. 2045) for publication in the 2024 Annual Report
and Accounts.
• Scope 3 target and phasing received Board approval and was submitted to the SBTi in
December 2023.
• Communication plan developed and approved by the Executive Committee, which
includes customer briefings and interactions.
• Internal personnel structure defined and in place, supported by SMEs from the divisions.
• Sustainability committee established.
• 2024 Annual Report and Accounts includes the near-term SBTi targets and conversion
of our previous 2025 targets to our new SBTi commitments.
Significant progress has been made on the sustainability front and this objective has been
met in full.
Mark Strickland (10%) Banking: Progress towards launch and completion of
the refinancing of the Group’s current RCF, overdraft
and invoice discounting lines by 30 June 2024.
• Launch was 1 August 2024, with completion expected to be in October 2024, following
the September 2024 publication of the 2024 audited accounts.
• Significant debt reduction, combined with positive net debt/EBITDA and net interest
cover ratios, has led to a significant reduction in the margins over base rates.
Reflecting the progress made towards the completion of the refinancing and cost savings
achieved, this objective has been met in full.
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2. Annual bonus outcomes for 2024 (audited) continued
Personal element outcomes continued
Chris Smith and Mark Strickland performed very strongly against their personal objectives throughout the year. Based on their performance, the Committee determined that the first
objective (applicable to both Executive Directors) was met at 80% and that the individual objectives were each 100% met. This resulted in an overall pay-out for both Executive Directors
of 90% of the 20% allocated to the personal objectives and, therefore, a pay-out of 18% of salary for both Executive Directors.
The overall bonus pay-out is 98.0% of maximum and no discretion has been used in determining the outcome. The Committee believes this is a fair outcome which appropriately reflects
the strong recovery of the Group during the year.
30% of the bonus for each of the Executive Directors will be deferred in shares for three years.
3. LTIP outcome for the year ended 30 June 2024 (audited)
On 9 September 2021, Chris Smith was granted LTIP awards over 716,955 shares and Mark Strickland was granted awards over 379,112 shares which were, in each case, capable of vesting
on 9 September 2024. The awards were based on adjusted earnings per share and return on capital employed performance conditions, each with an equal weighting. The performance
period for both measures ended on 30 June 2024 and 50% of the awards vested. These vested awards will ordinarily become exercisable on 9 September 2024, subject to continued
service. Vested awards are subject to a two-year holding period.
Threshold
(10% vesting)
Target
(50% vesting)
Maximum
(100% vesting) Actual
Vesting
(% of maximum)
Compound annual EPS growth (50%) 12.6% 22.0% 31.3% 38.3%
(22.2 pence)
100%
Average annual ROCE (50%) 11.6% 14.0% 15.4% 9.5% 0%
The EPS targets were achieved in full and the ROCE threshold was not achieved, resulting in 50% of the award vesting. The value for the single figure table is based on the
information below:
Number
of awards
granted on
9 September
2021
Vesting
outcome
Number of
awards
vesting
Additional
dividend
accrual
Share price
on vesting
(9 September
2024)
Value of
vested awards
for single
figure table
Chris Smith 716,955 50% 358,477 — 127.0 pence £455,266
Mark Strickland 379,112 50% 189,556 — 127.0 pence £240,736
The Committee has not applied any discretion to amend the formulaic outcomes. The vested awards will be subject to a two-year holding period.
4. Payments for loss of office
There were no payments for loss of office made during the year ended 30 June 2024.
5. Payments to former Directors
There were no payments made to former Directors during the year ended 30 June 2024 in respect of relevant services.
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Directors’ share ownership and share interests
6. LTIP, RSU and deferred bonus awards granted in 2024
In the year under review, LTIP awards were granted to both Executive Directors on 20 September 2023 under the McBride plc 2014 LTIP. These awards were granted in the form of
conditional share awards.
LTIP awards
LTIP awards were granted on 20 September 2023 to the Executive Directors.
Market price
on grant date
(1)
Basis of award
Number
of awards
Face value
of awards
Percentage
vesting at
threshold
Performance
period end
Chris Smith 40.45 pence 100% of salary 1,129,601 £456,924 10% 30 Jun 2026
Mark Strickland 40.45 pence 90% of salary 667,490 £270,000 10% 30 Jun 2026
(1) The awards were granted at a price of 40.45 pence, being the middle market quotation on the day before the date of grant.
Vested awards will be subject to a two-year holding period.
RSU awards
RSU awards were granted to both Chris Smith and Mark Strickland in June and September 2023 respectively, at 15% of salary under the Company’s previous Remuneration Policy.
Afterthe new Policy was approved at the 2023 AGM, a further award was made to each Executive Director on 20 November 2023 to reflect the increase in the RSU limit from 15% to
30%of salary.
Chris Smith’s grant for the financial year 2024/25 was made shortly before the start of the year (11 June 2024) in line with past practice.
Date of grant
Market price
on grant date
(1)
Basis of award
Number
of awards
Face value
of awards Vesting date
Chris Smith 20 Nov 2023 26.95 pence 15% of salary 254,317 £68,538 20 Nov 2026
11 Jun 2024 118.00 pence 30% of salary 119,652 £141,189 11 Jun 2027
Mark Strickland 20 Sep 2023 40.45 pence 15% of salary 111,248 £45,000 20 Sep 2026
20 Nov 2023 40.45 pence 15% of salary 111,248 £45,000 20 Nov 2026
(1) The November 2023 award for Chris Smith was granted at 26.95 pence. As this award was an additional award to reflect the higher RSU policy limit, this award was made on the same basis as the award made on 12 June 2023
that was reported in last year’s Remuneration Report. The price used was therefore the middle market quotation on 9 June 2023, being the last trading day before 12 June 2023. The September 2023 award for Mark Strickland
was granted at 40.45 pence, being the middle market quotation on the day before the date of grant. The November 2023 award for Mark Strickland was made on the same basis and price as the September 2023 award i.e.
using a share price of 40.45 pence.
Vested awards will be subject to a two-year holding period.
Deferred bonus awards
In respect of performance for the year ended 30 June 2023, 30% of the bonus was deferred into share awards under the McBride 2020 Deferred Annual Bonus Plan (DBP) on
20September 2023.
Market price
on grant date
(1)
Basis of award
Number
of awards
Face value
of awards Vesting date
Chris Smith 40.45 pence 30% of 2023 bonus 315,114 £127,464 30 Jun 2026
Mark Strickland 40.45 pence 30% of 2023 bonus 198,222 £80,181 30 Jun 2026
(1) The awards were granted at a price of 40.45 pence, being the middle market quotation on the day before the date of grant.
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7. Outstanding LTIP, RSU and deferred bonus awards
Interests of Directors under the McBride plc 2014 LTIP as at 1 July 2023 and 30 June 2024 are set out below:
Director
Type
of award
Date of
award
Number of
awards at
1 July
2023
Allocated
in year
Awards
vested
in year
Allocations
lapsed
in year
Number of
awards at
30 June
2024
Market price
the day
before the
date of
award (£)
Vesting
date
Performance
period
Chris Smith LTIP
(1)
10 Sep 2020 877,016 — — 877,016 — 0.62 10 Sep 2023 1 Jul 2020 to 30 Jun 2023
LTIP
(2)
9 Sep 2021 716,955 — — — 716,955 0.766 9 Sep 2024 1 Jul 2021 to 30 Jun 2024
LTIP
(3)
3 Oct 2022 1,569,107 — — — 1,569,107 0.35 3 Oct 2025 1 Jul 2022 to 30 Jun 2025
LTIP
(4)
20 Sep 2023 1,129,601 — — — 1,129,601 0.4045 20 Sep 2026 1 Jul 2023 to 30 Jun 2026
RSU 11 Jun 2021 74,382 — 74,382 — — 0.886 11 Jun 2024 n/a
RSU 13 Jun 2022 216,073 — — — 216,073 0.305 13 Jun 2025 n/a
RSU 12 Jun 2023 — 254,317 — — 254,317 0.2695 12 Jun 2026 n/a
RSU
(5)
20 Nov 2023 — 254,317 — — 254,317 0.2695 12 Jun 2026 n/a
RSU 11 Jun 2024 — 119,652 — — 119,652 1.18 11 Jun 2027 n/a
DBP 20 Sep 2023 — 315,114 — — 315,114 0.4045 20 Sep 2026 n/a
Mark Strickland LTIP
(1)
25 Feb 2021 178,378 — — 178,378 — 0.814 25 Feb 2024 1 Jul 2020 to 30 Jun 2023
LTIP
(2)
9 Sep 2021 379,112 — — — 379,112 0.766 9 Sep 2024 1 Jul 2021 to 30 Jun 2024
LTIP
(3)
3 Oct 2022 829,714 — — — 829,714 0.35 3 Oct 2025 1 Jul 2022 to 30 Jun 2025
LTIP
(4)
20 Sep 2023 — 667,490 — — 667,490 0.4045 20 Sep 2026 1 Jul 2023 to 30 Jun 2026
RSU 25 Feb 2021 32,432 — 32,432 — — 0.814 25 Feb 2024 n/a
RSU 9 Sep 2021 51,697 — — — 51,697 0.766 9 Sep 2024 n/a
RSU 3 Oct 2022 169,957 — — — 169,957 0.233 3 Oct 2025 n/a
RSU 20 Sep 2023 — 111,248 — — 111,248 0.4045 20 Sep 2026 n/a
RSU
(5)
20 Nov 2023 — 111,248 — — 111,248 0.4045 20 Sep 2026 n/a
DBP 20 Sep 2023 — 198,222 — — 198,222 0.4045 20 Sep 2026 n/a
(1) The September 2020 LTIP award granted to Chris Smith and the February 2021 LTIP award granted to Mark Strickland lapsed as performance criteria were not achieved.
(2) The September 2021 LTIP award will vest at 50% as the EPS condition was achieved but the ROCE condition was not met (see page 94 for further details).
(3) The October 2022 LTIP award is based 50% on net debt/adjusted EBITDA targets (3.5x to 2.8x) and 50% on EPS targets relating to the year ending 30 June 2025 (8.0 pence to 11.0 pence). This award was granted at 35 pence
while the share price prior to grant was 23.55 pence.
(4) The September 2023 LTIP is based 50% on cumulative EPS for the three-year period ending 30 June 2026 (21.7 pence to 43.1 pence) and 50% on annual average ROCE for the same three-year period (15.0% to 23.8%).
(5) The RSU awards made on 20 November 2023 relate to the increased Policy award level from 15% to 30% of salary and, as such, have a deemed grant date consistent with the original 2023 awards (made on 12 June 2023 for
Chris Smith and 20 September 2023 for Mark Strickland). The share price consistent with these earlier dates has therefore been used when granting these awards.
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8. Statement of Directors’ shareholdings and share interests
The table below shows the beneficially owned shares and share interests held by Board members and their shareholdings as a percentage of salary/fee. Both Executive Directors have
holdings which are in excess of their respective shareholding guidelines, being 300% of salary for the CEO and 200% of salary for the CFO.
Beneficially
owned
shares
30 June 2024
(1)
Unvested
deferred
bonus awards
Unvested
RSU awards
Vested but
unexercised
LTIP awards
Total interests
held
Value of interests
counting towards
shareholding
guideline
(000)s
Shareholding as
a % of
salary/fee
(2)
Beneficially
owned
shares
30 June 2023
Jeff Nodland 664,600 — — — 664,600 £920 438.3% 664,600
Elizabeth McMeikan 29,000 — — — 29,000 £40 58.0% 29,000
Alastair Murray 37, 500 — — — 37,500 £52 83.8% —
Regi Aalstad 130,500 — — — 130,500 £181 344.3% 80,000
Chris Smith 576,863 315,114 844,359 — 1,775,759 £1,650 350.6% 537,440
Mark Strickland 173,355 198,222 444,150 — 815,727 £712 230.3% 95,923
(1) Includes shares held by connected persons.
(2) Executive Directors have a shareholding requirement equal to a multiple of base salary, 300% in the case of the CEO and 200% in the case of the CFO, which they are expected to reach within five years of their appointment.
As well as beneficially owned shares, vested but unexercised LTIP awards, unvested RSU awards and deferred shares will count towards shareholding requirements, on a net of tax basis. NEDs have a shareholding guideline
equivalent to 100% of their annual base fee. Jeff Nodland, Regi Aalstad, Chris Smith and Mark Strickland have share interests in excess of their respective guidelines and Liz McMeikan and Alastair Murray are below their
guidelines.
No changes to the Directors’ ordinary share interests shown in the above table have taken place between 30 June 2024 and 16 September 2024.
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9. Percentage change in Directors’ remuneration versus employee pay
The table below shows the annual percentage change in remuneration of Directors and UK employees over the last five financial years. Although the Company has an international
workforce, this group has been chosen as it continues to represent the most meaningful comparator group to compare to the UK-based Executive Directors. Where there are no prior
years to compare to, the value is marked as not applicable.
Salary/fees change
(1)
Benefits change
(1)
Bonus change
(1, 2)
2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024
Executive Directors
Chris Smith 17.0% 27.0% 0.5% 2.0% 3.5% 22.8% (6.6)% (2.0)% 2.6% 7.1% n/a (100.0)% n/a n/a 6.8%
Mark Strickland n/a n/a 96.5% 6.8% 8.0% n/a n/a 102.6% 2.4% 8.5% n/a n/a n/a n/a 11.6%
Non-Executive Directors
Steve Hannam — 8.7% 2.7% (61.7)% n/a 89.9% (100.0)% — — n/a n/a n/a n/a n/a n/a
Igor Kuzniar n/a — 2.6% (8.3)% n/a n/a (100.0)% 100.0% (16.5)% n/a n/a n/a n/a n/a n/a
Elizabeth McMeikan n/a 91.6% 2.7% 8.6% 10.1% n/a — — 100.0% (97.9)% n/a n/a n/a n/a n/a
Alastair Murray n/a n/a n/a 13.8% 5.0% n/a n/a n/a 87.8% (100.0)% n/a n/a n/a n/a n/a
Regi Aalstad n/a n/a n/a 229.1% 5.0% n/a n/a n/a 100.0% (25.5)% n/a n/a n/a n/a n/a
Jeff Nodland n/a 62.9% — — 5.0% n/a (95.9)% 3,602.8% 22.2% (11.6)% n/a n/a n/a n/a n/a
Comparator group
Average for UK
employees
(2)
1.3% 7.6% 2.1% 3.6% 6.9% n/a (65.7)% (21.5)% (6.3)% 21.8% 9.5% 417.4% (17.5)% 266.1% 12.0%
(1) Footnotes in relation to 2020, 2021, 2022 and 2023 percentage changes can be found in the Annual Report and Accounts for the relevant year.
(2) The calculations for the comparator group are based upon the average values for UK-based employees (other than Directors) that were employed by Robert McBride Ltd versus the same criteria for the previous financial year.
At the end of the last financial year there were 458 employees in the comparator group versus 459 employees at the end of this financial year. Pension benefits and long-term incentive awards are excluded from the calculation.
The comparator group data is being reported in this way as all of the employees of McBride plc are the Executive Directors and therefore the comparison required by the Regulations cannot be shown.
10. CEO pay ratio
Under Option B of The Companies (Miscellaneous Reporting) Regulations 2018, the latest available gender pay gap data was used to identify the best equivalent comparison for the
three UK-based employees whose pay is at the 25th, 50th (median) and 75th percentiles of the comparator group. There were 459 UK-based employees in the comparator group. This
calculation methodology was selected as it provides the most consistent company approach for identifying meaningful equivalents which are reasonably representative of the percentiles
and are aligned to our approach to UK gender pay gap reporting. The employees identified as the best equivalents are deemed reasonably representative as their incentive outcomes and
pay structures are representative of the wider population.
The ratios shown in the table compare the total remuneration for the relevant UK-based employees to the current CEO single total remuneration figure. The ratios have increased in 2024,
primarily as a result of the granting of additional RSUs and a slight increase in the annual bonus payment to the Executive Directors, plus we have seen a reduction in median earners for
the wider UK employee population. This pay ratio is consistent with the pay, reward and progression policies applicable to the Company’s employees as a whole. All employees are eligible
for incentives, which can vary from year to year, salaries are based on role size and market benchmarks, and there are similar pension contributions (in terms of percentage of salary)
for the Executive Directors compared to the median employee. It is also worth noting that the CEO’s single figure for 2020 was calculated using a cumulative pro-rata single figure to
represent the pay of the three different CEOs that had been appointed throughout that year.
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10. CEO pay ratio continued
Year Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2024 Option B 30.9:1 28.4:1 20.0:1
2023 Option B 28.2:1 22.8:1 18.3:1
2022
(1)
Option B 17.8:1 14.8:1 9.6:1
2021
(1)
Option B 20.5:1 16.6:1 11.1:1
2020 Option B 23.1:1 19.7:1 14.2:1
(1) The ratios shown in the table compare total remuneration for the three relevant UK-based employees to a
CEO’s single total remuneration figure that includes base salary, RSUs, benefits and pension only as there
were no incentive payments in respect of 2021 and 2022. Typically, a significant proportion of the CEO’s pay
is delivered through incentives where performance conditions are met.
The table below shows the total remuneration and salary for each quartile of UK employees
over the financial year from 1 July 2023 to 30 June 2024.
25th
percentile Median
75th
percentile
Salary £33,104 £35,026 £48,807
Total remuneration £36,361 £39,495 £55,992
11. CEO single figure history and TSR performance
The graph below charts the TSR (share value movement plus reinvested dividends),
over the ten years to 30 June 2024, of shares in McBride plc compared with that of a
hypothetical holding in the FTSE SmallCap excluding Investment Trusts. The Directors
consider this index to be an appropriate comparator group for assessing the Company’s
TSR as it provides a well-defined, understood and accessible benchmark.
McBride FTSE SmallCap
Jun
14
0
£
50
100
150
200
250
Jun
24
Jun
23
Jun
22
Jun
21
Jun
20
Jun
19
Jun
18
Jun
17
Jun
16
Jun
15
300
The graph shows the value, by 30 June 2024, of £100 invested in McBride plc on 30 June
2014, compared with the value of £100 invested in the FTSE SmallCap excluding Investment
Trusts on the same date.
The following table shows the historical Chief Executive Officers’ levels of total
remuneration (single figure of total remuneration), together with annual bonus and LTIP
awards as a percentage of the maximum available.
CEO/financial year
Total
remuneration
£’000
Annual
bonus % of
maximum
LTIP % of
maximum
vested
(6)
Chris Smith
(1)
2024 1,577 98.0 50.0
2023 999 95.0 —
2022 552 — —
2021 551 — —
2020
(2)
497 24.8 —
Ludwig de Mot
(3)
2020
(2)
368 — —
Rik De Vos
(4)
2019 592 — —
2018 890 — 62.5
2017 1,169 70.8 100.0
2016 893 98.5 —
2015 357 89.0 —
Chris Bull
(5)
2015 253 — —
(1) Chris Smith was appointed CEO with effect from 11 June 2020 having previously been CFO since 15 July 2014.
(2) For 2020, the total remuneration has been adjusted to reflect the period served as CEO.
(3) Ludwig de Mot was appointed CEO with effect from 1 November 2019 and left the business on 10 June 2020.
(4) Rik De Vos was appointed CEO with effect from 2 February 2015 and left the business on 31 August 2019.
(5) Chris Bull was appointed CEO with effect from 4 May 2010 and left the business on 18 December 2014.
(6) The LTIP % of maximum is the percentage of shares vesting compared to the maximum that could have
vested.
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Remuneration Committee Report continued
Annual Report on Remuneration continued
Directors’ share ownership and share interests continued
12. Relative importance of spend on pay
The table below shows the total amount of distributions to shareholders compared to
the total payroll costs for the Group for the financial years ended 30 June 2023 and
30June2024.
Year ended
30 June
2023
£m
Year ended
30 June
2024
£m % change
Shareholder distribution — — n/a
Total payroll costs
(1)
(of all Group employees including Directors) 142.0 156.5 10.2%
(1) Total payroll costs exclude termination benefits.
13. Remuneration Committee and advisers
As reported on page 70, the Committee met five times during the year, with all Committee
members attending all five meetings.
Jeff Nodland satisfied the independence condition on his appointment as a Non-Executive
Director. The Board is satisfied that the remaining members during the year were
independent Non-Executive Directors. Meetings may be attended by the Chief Executive
Officer on all matters except those relating to his own remuneration. The Chief Financial
Officer, the Chief HR Officer and the Company’s independent remuneration consultants also
attend meetings by invitation. The Company Secretary attended each meeting as Secretary
to the Committee. No Director or attendee participates in any discussion relating to his or
her own remuneration.
A summary of the key matters considered by the Committee in respect of Directors’
remuneration during the year and since the year end in respect of 2024 is as follows:
• the Committee reviewed the base salaries for the Executive Directors;
• in relation to the annual bonus, the Committee reviewed and approved performance
against the financial and non-financial objectives and determined after the year end
that a bonus of 98.0% of maximum would be payable to each of the Executive Directors
covering this period. No discretion was applied in reaching this decision;
• in relation to the LTIP awards granted in 2021, the Committee reviewed the performance
conditions after the year end and determined that the overall vesting will be 50%,
reflecting strong EPS growth. No discretion was applied in determining the level of
vesting; and
• the Committee approved the grant of the LTIP and RSU awards in the period under
review in line with the new Policy that was approved at the 2023 AGM.
The Committee’s main duties are:
• to review the ongoing appropriateness and relevance of the Directors’ Remuneration
Policy;
• to apply formal and transparent procedures regarding executive remuneration packages;
• to consider and make recommendations to the Board on remuneration issues for the
Chairman, the Executive Directors and other senior executives, taking into account the
interests of relevant stakeholders;
• to ensure that failure is not rewarded and that steps are taken to mitigate loss on
termination to contractual obligations where appropriate; and
• to review the implementation and operation of any Company share option schemes,
bonus schemes and long-term incentive plans (LTIPs) and to review the formal policy
forshareholding requirements, both in employment and post-cessation.
The Terms of Reference of the Committee were reviewed during the year and a copy of the
Committee’s Terms of Reference is available on the Group’s website www.mcbride.co.uk.
In determining the remuneration structure, the Committee appoints and receives advice
from independent remuneration consultants on the latest developments in corporate
governance and the pay and incentive arrangements prevailing in comparably sized
manufacturing companies. During the year, the Committee undertook a review of advisers
and appointed FIT Remuneration Consultants LLP (‘FIT’) as its independent adviser. Prior
to FIT’s appointment, Alvarez & Marsal Tax LLP (‘A&M’) provided advice to the Committee.
FIT received £22,154 in respect of the services provided for the 2024 financial year and
A&M received £52,346. Both FIT and A&M are members of the Remuneration Consultants
Group and both are signatories to its Code of Conduct which sets out guidelines to ensure
that any advice is independent and free of undue influence. FIT provided no other services
to the Company, whilst Alvarez & Marsal Europe Holdings Limited also provided advisory
services related to working capital management in the year.
The Committee is satisfied that the advice provided by both FIT and A&M was independent
and objective. As part of the tender review, the Committee reviewed the relationship with
FITand is satisfied that the team who provided advice do not have any connection to
McBride that may impair their independence or objectivity.
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Annual Report on Remuneration continued
Directors’ share ownership and share interests continued
14. Statement of shareholder voting
The table below shows the voting outcome at the AGM in October 2023 for the approval of the Company’s 2023 Remuneration Report, and the voting outcome at the AGM in October
2023 for the approval of the Directors’ Remuneration Policy:
Resolution
Votes
for %
Votes
against %
Votes
withheld
Approval of Remuneration Report (advisory vote at the 2023 AGM) 113,133,848 99.78 246,442 0.22 21,629
Approval of the Directors’ Remuneration Policy (binding vote at the 2023 AGM) 106,247,728 93.71 7,132,562 6.29 21,629
The latest Directors’ Remuneration Policy is available on McBride’s website (www.mcbride.co.uk) under the ‘Our Board and Corporate Governance’ section.
15. Application of the Remuneration Policy for the 2025 financial year
The table below sets out how the Remuneration Policy is intended to be applied for the 2025 financial year for Board Directors.
Element Application of Policy for 2025
Executive Director base salary The Executive Directors’ salaries as at the start of the 2025 financial year are £470,632 for the CEO and £309,000 for the CFO.
A salary review will be undertaken in the normal way during the year and any increase will take effect from 1 January 2025.
RSUs An award of 30% of salary will be made to each of the Executive Directors.
Benefits Pension contribution (or cash allowance in lieu of pension) of 8% of salary for each of the Executive Directors in line with the contribution rate for the
majority of the UK workforce. Car allowance of £13,200 per annum and private medical coverage, estimated to be around £2,000 for 2025, for each
of the Executive Directors.
Annual bonus The structure and operation of the annual bonus scheme for the Executive Directors will continue in line with the previous financial year.
Themaximum bonus opportunity continues to be 100% of salary. 60% of the award will be subject to a sliding scale of challenging operating profit
targets, 20% of the award will be subject to a sliding scale of net debt targets and 20% will be subject to specific measurable personal targets.
The Committee considers that the forward-looking targets are commercially sensitive and has, therefore, chosen not to disclose them in advance.
Details of the targets will be set out retrospectively in next year’s Remuneration Report; however, the targets are considered to be demanding in the
context of the Company’s circumstances.
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Annual Report on Remuneration continued
Element Application of Policy for 2025
LTIP The CEO’s award will have a face value of 100% of salary and the CFO’s award will have a face value of 90% of salary in 2025. The awards will be
subject toEPS and ROCE performance conditions with equal weighting.
EPS will be assessed by reference to the cumulative EPS achieved for the 2025, 2026 and 2027 financial years and ROCE will be assessed by
reference to the average ROCE achieved over the same three-year period.
It is intended that awards will be made under the existing 2023 LTIP in September.
The targets for the 2025 awards are as follows:
Target
Threshold
(10% of
part subject
to target)
Threshold
(50% of
part subject
to target)
Threshold
(100% of
part subject
to target)
Cumulative EPS for three years 60.0p 75.0p 90.0p
Average ROCE over three years 30.0% 33.1% 36.2%
The EPS targets have been set in the context of an exceptional performance in 2024 with the stretch target requiring an implied growth rate of 14.6%
per annum. The Committee believes the EPS and ROCE targets are sufficiently challenging against internal and external expectations.
Non-Executive Director fees There will be no change to the annual fees of the Chairman and Non-Executive Directors for 2025 as these were increased by 5% in July 2023.
Feeswill be as follows:
• Chairman base fee: £210,000;
• Non-Executive Director base fee: £52,500;
• Chair of the Audit and Risk Committee additional fee: £9,450;
• Chair of the Remuneration Committee additional fee: £8,400;
• Senior Independent Director additional fee: £8,400;
• international travel allowance for the Chairman: up to £50,000; and
• international travel allowance for Non-Executive Directors based overseas: up to £15,000.
The Remuneration Report was approved by the Board on 16 September 2024 and signed on its behalf by:
Elizabeth McMeikan
Chair of the Remuneration Committee
Directors’ share ownership and share interests continued
15. Application of the Remuneration Policy for the 2025 financial year continued
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Statutory Information
Reporting requirements
The Group is required to produce a Strategic Report complying with the requirements of
section 414A of the Companies Act 2006. The Strategic Report is set out on pages 1 to 60.
As permitted by section 414C(11) of the Companies Act 2006, the below matters have been
disclosed in the Strategic Report:
An indication of the likely future development in the business
ofthe Company
pages 7 to 9
Particulars of important events affecting the Company since
thefinancial year end
page 171
Greenhouse gas emissions pages 25 to 27
Employee engagement and involvement page 22
Engagement with suppliers, customers and others in a
businessrelationship with the Company
pages 23 to 24
A summary of the principal risks facing the Company pages 53 to 59
The Corporate governance statement, as required by the Disclosure and Transparency
Rules (DTR) 7.2.1, is set out on pages 65 to 70 of the Governance Report.
For the purposes of DTR 4.1.8R, the Strategic Report and the Governance Report together
form the Management Report.
For the purposes of Listing Rule 9.8.4R, the information required to be disclosed can be
found on the following pages:
Listing Rule Topic Location
4 Details of long-term incentive schemes Remuneration Report,
pages 95 to 96
13 Dividend waiver Statutory information,
page 103
Contracts with controlling shareholders
During the year, there were no contracts of significance (as defined in the FCA’s Listing
Rules) between any Group undertaking and a controlling shareholder and no contracts for
the provision of services to any Group undertaking by a controlling shareholder.
Group results
The results for the year are set out in the Consolidated Income Statement on page 115 and
a discussion of the Group’s financial performance and progress is set out in the Strategic
Report on pages 18 to 20.
Directors
The Directors who held office at any time during the year were Jeff Nodland, Chris Smith,
Mark Strickland, Elizabeth McMeikan, Alastair Murray and Regi Aalstad.
The biographical details of all Directors serving at 30 June 2024 appear on pages 62
and63.
Dividends
The Group’s results and performance highlights for the year are set out on pages 1 to
60. Under the amended terms of the Group’s RCF announced on 29 September 2022,
the Company may not, except with the consent of its lender group, declare, make or pay
any dividend or distribution to its shareholders prior to an ‘exit event’, being a change
of control, refinancing of the RCF in full, prepayment and cancellation of the RCF in full,
or upon the termination date of the RCF, being May 2026. Therefore, the Board is not
recommending a final dividend for the year ended 30 June 2024. As stated in the 2023
Annual Report, future dividends will be final dividends paid annually in cash, not by the
allotment and issue of B Shares.
As outlined in the RNS dated 29 September 2022, under the Company’s €175 million RCF
as amended, the Company is not permitted to redeem or repay any of its share capital.
This restriction remains in place until either the current RCF matures in May 2026 or it is
superseded by a new financing agreement. As a result, no redemption of existing B Shares
is permitted at the present time. Once this restriction is lifted, B Shares will continue to be
redeemable but limited to one redemption date per annum, in November of each year.
Further details on B Shares can be found in the booklet entitled ‘Your Guide to B Shares’
onthe Company’s website at www.mcbride.co.uk.
Apex Group Fiduciary Services Limited, in its capacity as Trustee of the McBride
EmployeeBenefit Trust, has waived its entitlement to dividends on ordinary shares in
theCompany comprised in the trust fund where no beneficial interest in the shares has
vested in a beneficiary. This waiver will continue unless and until the Company directs the
Trustee otherwise.
Directors’ interests in the Company’s shares
The interests of persons who were Directors of the Company (and of their Connected
Persons) at 30 June 2024 in the issued shares of the Company (or in related derivatives
or financial instruments) which have been notified to the Company in accordance
with the Market Abuse Regulation are set out in the Remuneration Report on page 97.
TheRemuneration Report also sets out details of any changes in those interests between
30June 2024 and 16 September 2024.
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Statutory Information continued
Indemnification of Directors
The Directors have the benefit of an indemnity provision contained in the Articles of
Association of the Company. In addition, under deeds of indemnity, the Company has
granted indemnities in favour of each Director of the Company in respect of any liability
that he or she may incur to a third party in relation to the affairs of the Company or any
Group company. Consequently, qualifying third-party indemnity provisions for the purposes
of section 234 of the Companies Act 2006 were accordingly in force during the course of
the financial year and remain in force at the date of the approval of this report.
During the financial year ended 30 June 2024 and up to the date of this Directors’ Report,
the Company had appropriate Directors’ and officers’ liability insurance cover in place in
respect of legal action against its Directors.
Directors’ interests in contracts
Other than service contracts, no Director had any interest in any material contract with
anyGroup company at any time during the year. There were no contracts of significance
(asdefined in the FCA’s Listing Rules) during the year to which any Group undertaking
wasa party and in which a Director of the Company is, or was, materially interested.
Share capital
As at 12 September 2024, the issued share capital of the Company was 174,015,287 ordinary
shares of 10 pence each (96.292% of total year-end capital) (excluding treasury shares),
42,041 ordinary shares of 10 pence each held in treasury (‘treasury shares’) (0.023% of total
year-end capital) and 665,888,258 B Shares of 0.1 pence each (3.685% of total year-end
capital). There were no purchases, sales or transfers of treasury shares during the year.
There were no allotments of ordinary shares during the year. Details of the issued share
capital, together with details of movement in the issued share capital of the Company
during the year, are shown in note 25 to the financial statements. This is incorporated by
reference and deemed to be part of this report. The Company has one class of ordinary
shares, which carries no right to fixed income. The ordinary shares are listed on the Official
List and traded on the London Stock Exchange. All issued shares are fully paid.
The Company was authorised at the 2023 AGM to allot shares, or grant rights over shares,
up to an aggregate nominal amount equal to £870,076 (8,700,760 ordinary shares of 10
pence each), representing approximately 5% of its issued ordinary share capital (excluding
treasury shares). This authority, however, is due to expire at the 2024 AGM and the Board
will be seeking a renewal of this authority at the 2024 AGM.
The Investment Association’s guidelines on directors’ share allotment authorities state that
the Association’s members will regard as routine any proposal at a General Meeting to
seek a general authority to allot an amount up to two-thirds of the existing share capital,
provided that any amount in excess of one-third of the existing share capital is applied to
fully pre-emptive rights issues only. Following engagement with certain of the Company’s
non-UK shareholders in 2023, the Board concluded it to be in the best interests of the
Company to limit the allotment authority sought at the 2023 AGM to 5% of the Company’s
issued ordinary share capital (excluding treasury shares).
The Company was authorised at the 2023 AGM to allot up to an aggregate nominal amount
of £870,076 (representing 8,700,760 ordinary shares of 10 pence each), representing
approximately 5% of the issued ordinary share capital (excluding treasury shares) for cash
without first offering them to existing shareholders in proportion to their holding. The
Board continues to believe it to be in the best interests of the Company to so limit the
allotment authority and, accordingly, a renewal of this authority will be proposed at the
2024 AGM.
There are no restrictions on the transfer of ordinary shares or B Shares in the Company,
other than certain restrictions that may from time to time be imposed by law. The Company
is not aware of any agreements between shareholders that may result in restrictions on the
transfer of securities and/or voting rights.
Substantial shareholdings
The Company had been notified in accordance with Chapter 5 of the Financial Conduct
Authority’s Disclosure Guidance and Transparency Rules of the following interests
amounting to 3% or more of its issued share capital as at the end of the financial year and
at 12 September 2024 (being the last practicable date prior to the date of this report).
As at 12 September 2024 As at 30 June 2024
Number
of shares %
Number
of shares %
Teleios Capital Partners 41,351,657 23.76 41,351,657 23.76
DUMAC, Inc. 25,722,449 14.78 25,722,449 14.78
Zama Capital 21,007,962 12.07 21,007,962 12.07
Aberforth Partners LLP 8,682,453 4.99 9,072,968 5.21
Premier Miton Investors 8,347,899 4.76 8,347,899 4.76
Accounting policies
Information on the Group’s financial risk management objectives, policies and activities and
on the exposure of the Group to relevant risks in respect of financial instruments is set out
in note 20 to the consolidated financial statements on pages 152 to 160.
Political donations
It is the Group’s policy not to make political donations or to incur political expenditure.
During the year, no political donations were made by the Group to any EU or non-EU
political party, political organisation or independent election candidate. During the
year, no EU or non-EU political expenditure was incurred. In keeping with the Group’s
approach in prior years, shareholder approval is being sought at the forthcoming AGM, as
a precautionary measure, for the Company and its subsidiaries to make donations and/or
incur expenditure, which may be construed as political by the wide definition of that term
included in the relevant legislation. Further details are provided in the Notice of AGM.
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Statutory Information continued
Research and development
The Group is involved in a range of activities in the field of R&D. A number of these activities are referred to in the Strategic Report on pages 25 to 29.
Employment of disabled people
Our people policies are designed to provide equal opportunities and create an inclusive culture in line with our values and in support of our long-term success. They also reflect relevant
local employment law in our countries of operation.
We expect our colleagues to treat each other with dignity and respect, and do not tolerate discrimination, bullying, harassment or victimisation on any grounds. We are committed to
recruiting, training and paying our people fairly and equitably relative to their role, skills, experience and performance – in a way that balances the needs of all our business.
It is our policy to give full and fair consideration to applications for employment received from people with disabilities, having regard to their particular aptitudes and abilities.
Whereverpossible we will continue the employment of, and arrange appropriate training for, colleagues who have become disabled during the period of their employment. We provide
the same opportunities for training, career development and promotion for colleagues with disabilities as for other colleagues.
Creating an inclusive and supportive culture is not only the right thing to do, but also best for our business. It creates a sense of belonging and value and enables colleagues to perform
attheir best.
Colleague engagement
We recognise the importance of keeping all colleagues at all levels across the business up to date on the strategy, performance and progress of the divisions and Group through
multiple communication channels. This combines leader-led communication at a site, divisional and Group level supported by emails, intranet, the Group’s employee self-service portal,
announcements and bulletins.
Colleague engagement at all levels is a crucial element of embedding our core and aspirational values, allowing us to help colleagues see how their efforts contribute to their site, division
or function’s strategic objectives.
We also engage with our colleagues collectively through a strong and effective partnership with our EWC, which represents all colleagues within the European Union and which meets
biannually, in addition to other local works council forums.
Eligible employees participate in performance-related bonus schemes and some senior managers participate in an LTIP or RSU scheme.
Numerical diversity data as at 30 June 2024
The following tables set out the information required by Listing Rule 9.8.6R(10) in the prescribed format. At year end, the Board and members of the Executive Committee are asked to
complete a diversity disclosure to confirm which of the categories set out in the below tables they identify with.
1.(a) Table for reporting on gender identity or sex
Number
of Board
members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
Men 4 66.7% 3 4 66.7%
Women 2 33.3% 1 2 33.3%
Not specified/prefer not to say 0 0.0% 0 0 0.0%
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Statutory Information continued
Numerical diversity data as at 30 June 2024 continued
2.(b) Table for reporting on ethnic background
Number
of Board
members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
White British or other White (including minority-white groups) 6 100% 4 6 100%
Mixed/Multiple ethnic groups 0 0% 0 0 0%
Asian/Asian British 0 0% 0 0 0%
Black/African/Caribbean/Black British 0 0% 0 0 0%
Other ethnic group (including Arab) 0 0% 0 0 0%
Not specified/prefer not to say 0 0% 0 0 0%
Change of control
As at 30 June 2024 and at 12 September 2024, the last practicable date prior to approval of this report, the Company and its subsidiaries were party to a number of commercial contracts,
contract manufacturing and brand licensing agreements that may allow the counterparties to alter or terminate the agreements on a change of control of the Company following a
takeover bid. The Group has a syndicated multi-currency RCF for €175 million which may require prepayment if there is a change of control of the Company. The rules of the discretionary
share schemes set out the consequences of a change of control of the Company on participants’ rights under the schemes. Generally, the rights will vest and become exercisable on
a change of control subject to the satisfaction of relevant performance conditions. There are no arrangements between the Company and its Directors or employees providing for
compensation for loss of office or employment that occurs specifically because of a takeover, merger or amalgamation. For further information on the change of control provisions in
the Company’s share plans and service agreements, please refer to the Directors’ Remuneration Policy. The full Directors’ Remuneration Policy is available in the 2023 Annual Report
andAccounts, which can be accessed at www.mcbride.co.uk.
Branches
The Company has no overseas branches. The Company’s subsidiaries are detailed in note 15 to the Company Financial Statements.
2024 Annual General Meeting
The Company’s 2024 AGM will be held at the head office of McBride plc, Arbeta, 11 Northampton Road, Manchester M40 5BP on Tuesday 12 November 2024 at 2.00pm. Details of the
resolutions to be proposed, how to vote and ask questions are set out in a separate Notice of AGM which accompanies this report for shareholders receiving hard copy documents, and
which is available on our website at www.mcbride.co.uk for those who have elected to receive documents electronically. The results will be announced as soon as possible and posted on
our website.
Disclosure of information to the auditors
Each of the Directors who held office at the date of approval of this Directors’ Report confirms that, so far as each Director is aware, there is no relevant audit information of which the
Company’s auditors are unaware and each Director has taken all the steps that ought to have been taken in his or her duty as a Director to make himself or herself aware of any relevant
audit information and to establish that the Company’s auditors are aware of that information.
The Directors’ Report was approved by the Board on 16 September 2024 and signed on its behalf by the order of the Board by:
Robert Henry
General Counsel and Company Secretary
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Statement of Directors’ Responsibilities
in Respect ofthe Financial Statements
The Directors are responsible for preparing the Annual Report and Accounts 2024 and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have prepared the Group financial statements in accordance
with UK-adopted international accounting standards and the Company financial statements
in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure Framework’,
andapplicable law).
Under company law, Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group for that period. In preparing the financial statements,
the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK-adopted international accounting standards have been
followed for the Group financial statements and United Kingdom Accounting Standards,
comprising FRS 101, have been followed for the Company financial statements, subject
to any material departures disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business.
The Directors are responsible for safeguarding the assets of the Group and Company and
hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for keeping adequate accounting records that are
sufficient to show and explain the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Group and Company and
enable them to ensure that the financial statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Accounts 2024, taken as a whole, is fair,
balanced and understandable and provides the information necessary for shareholders to
assess the Group’s and Company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in Board of Directors, confirm
that, to the best of their knowledge:
• the Group financial statements, which have been prepared in accordance with
UK-adopted international accounting standards, give a true and fair view of the
assets,liabilities, financial position and profit of the Group;
• the Company financial statements, which have been prepared in accordance with United
Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the
assets, liabilities and financial position of the Company; and
• the Strategic Report and Directors’ Report include a fair review of the development and
performance of the business and the position of the Group and Company, together with
a description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ Report is approved:
• so far as the Director is aware, there is no relevant audit information of which the Group’s
and Company’s auditors are unaware; and
• they have taken all the steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the Group’s and
Company’s auditors are aware of that information.
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Independent Auditors’ Report
to the Members of McBride plc
Report on the audit of the financial statements
Opinion
In our opinion:
• McBride plc’s Group financial statements and Company financial statements (the
‘financial statements’) give a true and fair view of the state of the Group’s and of the
company’s affairs as at 30 June 2024 and of the group’s profit and the Group’s cash
flows for the year then ended;
• the Group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards as applied in accordance with the
provisions of the Companies Act 2006;
• the Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101, ‘Reduced Disclosure Framework’, and applicable law);
and
• the financial statements have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and
Accounts 2024 (the ‘Annual Report’), which comprise: the Consolidated and Company
Balance Sheets as at 30 June 2024; the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated Cash Flow Statement and the
Consolidated and Company Statements of Changes in Equity for the year then ended;
and the Notes to the Financial Statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, which includes the FRC’s
Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by
the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 6, we have provided no non-audit services to the
company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• Our work incorporated full scope audits of the Group’s components in the UK, France,
Belgium and Germany plus limited scope procedures in relation to Italy, Luxembourg,
PLC and Vitherm.
• The entities where we conducted audit work, together with audit work performed
at the Group’s shared service centre and at the consolidated level, accounted for
approximately 74% of the Group’s revenue.
Key audit matters
• Valuation of Goodwill – specifically in the Liquids cash-generating unit (group)
• Valuation of investments in subsidiaries and recoverability by amounts owed by
subsidiaries (parent)
Materiality
• Overall group materiality: £7.0 million (2023: £4.4m) based on 0.75% of revenue in
2024 and 0.5% of revenue in 2023.
• Overall company materiality: £2.9 million (2023: £3.0m) based on 1% of total assets.
• Performance materiality: £5.3 million (2023: £3.3m) (group) and £2.2 million (2023:
£2.3m) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were
of most significance in the audit of the financial statements of the current period and
include the most significant assessed risks of material misstatement (whether or not due
to fraud) identified by the auditors, including those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters, and any comments we make on the results of our
procedures thereon, were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
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Independent Auditors’ Report
to the Members of McBride plc continued
Report on the audit of the financial statements
Key audit matters continued
Key audit matter How our audit addressed the key audit matter
Valuation of Goodwill – specifically in the Liquids cash-generating unit (group)
Refer to the Consolidated financial statements note 12 – Goodwill In assessing the appropriateness of valuation of goodwill for the liquids CGU we have
performed the following procedures:
Goodwill of £19.7 million (2023: £19.7m) is split across four cash-generating units (CGUs) that
are considered annually for impairment. Of the £19.7 million, £16.0 million (2022: £16.0m)
relates to one CGU, Liquids CGU, which the significant risk of impairment is in relation to, the
key assumptions in the model being the discount rate, long-term growth rate, revenue growth,
raw materials prices, capex and working capital balances.
We evaluated and assessed the Group’s future cash flow forecasts, the process by
which they were drawn up and tested the underlying value in use calculations.
We compared the Group’s forecasts to the latest Board approved budget and found
them to be consistent.
We discussed the cash flow forecasts with management and compared the growth
assumptions to external market research for the Liquids CGU in order to identify any
inconsistencies.
The Directors have performed their annual impairment assessment using a value-in-use model
in which no impairment has been identified. The Directors have sensitised the value-in-use
model to assess the financial impact of key assumptions that the Directors believe have a
reasonable likelihood of occurrence and have concluded that a reasonably possible change
would not lead to an impairment.
We have assessed management’s assumptions for margins by comparing to historical
data and supporting evidence.
We compared actual results with previous forecasts to assess the historical accuracy
of the forecasts and incorporated the variances identified into the sensitivity analysis
performed.
We have identified the valuation of the Liquids CGU as a significant risk due to its historic
trading performance compared to budget and the lower level of headroom in the value-in-use
calculation. This is deemed to be a Key Audit Matter as the balance is significant and the
valuation requires estimation.
We have utilised specialists to assess management’s key assumptions for long-term
growth rates by comparing with external forecasts and discount rates used by
assessing the cost of capital calculations for the Group and comparing against
comparable organisations.
We challenged management to the extent of which climate change has been reflected
within management’s impairment assessment process.
We considered management bias throughout the assumptions used and considered
any contradictory evidence.
We have reviewed the disclosures made regarding the assumptions and sensitivities
applied by management and we are satisfied that these are appropriate.
As a result of these procedures, we were satisfied with the Directors’ conclusion that
no impairment was required for the current year.
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Key audit matters continued
Key audit matter How our audit addressed the key audit matter
Valuation of investments in subsidiaries and recoverability by amounts owed by
subsidiaries (parent)
Refer to the Company financial statements note 5 – Investments and the Company financial
statements note 6 – Trade and other debtors.
Investments in subsidiaries:
We have performed the following audit procedures in relation to the carrying value of
investments:
Investments in related undertakings of £158.4 million (2023: £158.4m) is material to the
Company financial statements. Given the magnitude of this balance, and the management
judgement involved in determining whether any impairment triggers exist, we have considered
the risk of impairment of these assets as a Key Audit Matter. Impairment indicators have been
assessed and no triggers have been identified.
We obtained a schedule of investments in subsidiary undertakings and ensured this is
reconciled to the financial statements.
We challenged management’s assertion that no impairment triggers were identified
that would necessitate a full impairment review to be performed.
We performed a review of net assets of the subsidiary entity against the carrying
value, compared the carrying value to the group’s market capitalisation and also our
review of the discounted cash flow models prepared for the purpose of testing overall
group goodwill for impairment.
We reviewed the disclosures and are satisfied that these are appropriate.
As a result of these procedures, we were satisfied with the Directors’ conclusion that
no impairment triggers have been identified therefore no impairment was required
against the carrying value of the investments in subsidiaries.
The amounts owed by subsidiary undertakings of £127.7 million (2023: £130.4m). Given the
magnitude of this balance, and the management judgement involved in determining whether
any impairment exists, we have considered the risk of impairment of these assets as a Key
AuditMatter.
Amounts owed by subsidiary undertakings
We have performed the following audit procedures in relation to the recoverability of
intercompany balances:
We performed a reconciliation of the amounts owed by group undertakings and
ensured this agreed with the counterparty.
We have obtained management’s intercompany recoverability model and assessed
whether the expected credit loss ‘general approach’ methods applied were consistent
with IFRS 9.
We checked the calculations within the model and agreed the figures included to the
relevant financial information included in the Group consolidation schedules.
We have obtained evidence that supports the extent to which the counterparty could
repay amounts in full, if demanded.
We assessed the adequacy of the disclosure provided in the Company financial
statements in relation to the relevant accounting standards.
As a result of these procedures, we were satisfied with the Directors’ conclusion that
the amounts owed by subsidiary undertakings are recoverable.
Independent Auditors’ Report
to the Members of McBride plc continued
Report on the audit of the financial statements
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These, together with qualitative considerations, helped us to determine the scope of our
audit and the nature, timing and extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financialstatements as a whole.
Based on our professional judgement, we determined materiality for the financial
statements as a whole as follows:
Financial statements –
group
Financial statements –
company
Overall materiality £7.0 million (2023: £4.4m). £2.9 million
(2023: £3.0m).
How we determined it 0.75% of revenue in 2024 and
0.5% of revenue in 2023
1% of total assets
Rationale for
benchmark applied
We considered materiality in
a number of different ways,
and used our professional
judgement having applied
‘rule of thumb’ percentages
to a number of potential
benchmarks. On the basis of
this, we concluded that 0.75%
ofrevenue is an appropriate
level of materiality considering
the overall scale of the business.
We believe that calculating
statutory materiality based on
1% of total assets is a typical
primary measure for users of the
financial statements of holding
companies, and is a generally
accepted auditing benchmark.
For each component in the scope of our group audit, we allocated a materiality that is less
than our overall group materiality. The range of materiality allocated across components
was between £1.8 million and £4.7 million. Certain components were audited to a local
statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds overall
materiality. Specifically, we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances, classes of transactions
and disclosures, for example in determining sample sizes. Our performance materiality
was 75% (2023: 75%) of overall materiality, amounting to £5.3 million (2023: £3.3m) for
the group financial statements and £2.2 million (2023: £2.3m) for the company financial
statements.
In determining the performance materiality, we considered a number of factors – the
history of misstatements, risk assessment and aggregation risk and the effectiveness
of controls – and concluded that an amount at the upper end of our normal range was
appropriate.
We agreed with the Audit and Risk Committee that we would report to them
misstatements identified during our audit above £0.4 million (group audit) (2023: £0.2m)
and £0.1 million (company audit) (2023: £0.2m) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be
able to give an opinion on the financial statements as a whole, taking into account the
structure of the group and the company, the accounting processes and controls, and the
industry in which they operate.
The Group is a manufacturer of private label household and personal care products.
Itoperates across 15 manufacturing facilities in Europe and Asia. The Group is structured
in five operating segments: Liquids, Powders, Unit dosing, Aerosols and Asia as well as
Corporate. In establishing the overall approach to the Group audit, we determined the
type of work that needed to be performed at the entities by us, as the Group auditors,
or component auditors operating under our instruction. Where work was performed by
component auditors, we determined the level of involvement we needed to have in this
work to be able to conclude that sufficient appropriate audit evidence had been obtained.
Our work incorporated full scope audits of the Group’s legal entities in the UK, France,
Belgium and Germany plus limited scope procedures in relation to Italy, Luxembourg, the
PLC parent company and Vitherm SAS in France. The entities where we conducted audit
work, together with audit work performed at the Group’s shared service centre and at a
consolidated level, accounted for approximately 74% of the Group’s revenue.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand the process
management adopted to assess the extent of the potential impact of climate risk on
the Group’s financial statements and support the disclosures made within the financial
statements.
We challenged the completeness of management’s climate risk assessment by:
• reading external reporting made by management;
• considered management’s commitment to the Science Based Targets initiative during
the financial year;
• challenging the consistency of management’s climate impact assessment with internal
climate plans and board minutes; and
• reading the entity’s website/communications for details of climate related impacts.
In the financial year, management has developed Science-Based Targets covering scope
1 and 2 greenhouse gas emissions. This does not directly impact financial reporting, as
management has not yet developed a detailed pathway or timeline on how exactly they
will deliver this commitment and will only be able to model the impact further into its
journey to net zero.
Management considers the impact of climate risk as at the balance sheet date does not
give rise to a potential material financial statement impact.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain
quantitative thresholds for materiality.
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Report on the audit of the financial statements
Reporting on other information
The other information comprises all of the information in the Annual Report other than
the financial statements and our auditors’ report thereon. The directors are responsible for
the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated. If we identify an apparent
material inconsistency or material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the financial statements or a
material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether
the disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006
requires us also to report certain opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information
given in the Strategic Report and Directors’ Report for the year ended 30 June 2024
is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their
environment obtained in the course of the audit, we did not identify any material
misstatements in the Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Remuneration Committee Report to be audited has been
properly prepared in accordance with the Companies Act 2006.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to
continue to adopt the going concern basis of accounting included:
• we obtained management’s assessment that supports the Board’s conclusions with
respect to the disclosures provided around going concern;
• we obtained management’s base case scenario, checked its mathematical accuracy and
discussed the assumptions that were applied in order to understand the rationale and
the appropriateness of those assumptions;
• we obtained management’s severe but plausible downside scenario, checked its
mathematical accuracy and discussed the assumptions that were applied in order to
understand the rationale and the appropriateness of those assumptions;
• we corroborated the key assumptions in the base case and severe but plausible
downside scenario to third party evidence and/or our knowledge of the business and
considered and contradictory evidence;
• we assessed the available liquidity under the different scenarios modelled by
management, and the associated covenant tests applied; and
• we checked the banking agreement for the terms of the financing facilities which were
put in place during the year and agreed these facilities to management’s cashflow
forecasts.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the group’s and the company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the
going concern basis of accounting in the preparation of the financial statements is
appropriate.
However, because not all future events or conditions can be predicted, this conclusion
is not a guarantee as to the group’s and the company’s ability to continue as a going
concern.
In relation to the directors’ reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern
are described in the relevant sections of this report.
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Report on the audit of the financial statements
We have nothing to report in respect of our responsibility to report when the directors’
statement relating to the company’s compliance with the Code does not properly disclose
a departure from a relevant provision of the Code specified under the Listing Rules for
review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the
financial statements, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they
give a true and fair view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing
the group’s and the company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal
risks of non-compliance with laws and regulations related to health and safety regulations,
environmental laws and employment laws, and we considered the extent to which non-
compliance might have a material effect on the financial statements. We also considered
those laws and regulations that have a direct impact on the financial statements such
as the listing rules, local and international tax laws and the Companies Act 2006. We
evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the
principal risks were related to posting inappropriate journal entries to improve financial
performance, and management bias in accounting estimates and judgements. The group
engagement team shared this risk assessment with the component auditors so that they
could include appropriate audit procedures in response to such risks in their work.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going
concern, longer-term viability and that part of the corporate governance statement
relating to the company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Reporting on other
information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement is materially consistent with
the financial statements and our knowledge obtained during the audit, and we have
nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the
emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what
procedures are in place to identify emerging risks and an explanation of how these are
being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and
their identification of any material uncertainties to the group’s and company’s ability to
continue to do so over a period of at least twelve months from the date of approval of
the financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s
prospects, the period this assessment covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the
company will be able to continue in operation and meet its liabilities as they fall due
over the period of its assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group
and company was substantially less in scope than an audit and only consisted of making
inquiries and considering the directors’ process supporting their statement; checking
that the statement is in alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is consistent with the financial
statements and our knowledge and understanding of the group and company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that
each of the following elements of the corporate governance statement is materially
consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is
fair, balanced and understandable, and provides the information necessary for the
members to assess the group’s and company’s position, performance, business model
and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
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Independent Auditors’ Report
to the Members of McBride plc continued
Report on the audit of the financial statements
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate
for our audit have not been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Remuneration Committee Report
to be audited are not in agreement with the accounting records and returns; or
• a corporate governance statement has not been prepared by the company.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed
by the directors on 14 November 2011 to audit the financial statements for the year
ended 30 June 2012 and subsequent financial periods. The period of total uninterrupted
engagement is 13 years, covering the years ended 30 June 2012 to 30 June 2024.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and
Transparency Rules to include these financial statements in an annual financial report
prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R and filed on
the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report
provides no assurance over whether the structured digital format annual financial report
has been prepared in accordance with those requirements.
Hazel Macnamara (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Manchester
16 September 2024
Responsibilities for the financial statements and the audit continued
Auditors’ responsibilities for the audit of the financial statements continued
Audit procedures performed by the group engagement team and/or component auditors
included:
• challenging assumptions and judgements made by management in their significant
accounting estimates (because of the risk of management bias), in particular around
the carrying value of goodwill (see related key audit matter above) and recoverability
of deferred tax assets;
• discussions with the Audit Committee, management, internal audit and the in-house
legal team including consideration of known or suspected instances of non-compliance
with laws and regulation or fraud;
• enquired with external legal counsel around actual and potential litigation and claims;
• reviewing minutes of meetings of those charged with governance;
• auditing the tax workings and reviewing the disclosures included in the financial
statements in respect of tax;
• identifying and testing journal entries, in particular any journal entries posted with
unusual account combinations; and
• reviewing financial statements disclosures and testing to supporting documentation,
where appropriate, to assess compliance with applicable laws and regulations.
There are inherent limitations in the audit procedures described above. We are less likely
to become aware of instances of non-compliance with laws and regulations that are not
closely related to events and transactions reflected in the financial statements. Also, the
risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and
balances, possibly using data auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing complete populations. We will
often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is
located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s
members as a body in accordance with Chapter 3 of Part 16 of the Companies Act
2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is
shownor into whose hands it may come save where expressly agreed by our prior
consent in writing.
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Financial Statements
2024
2023
AdjustingAdjusting
AdjusteditemsAdjusteditems
(note 2)(note 2)Total(note 2)(note 2)Total
Note£m£m£m£m£m£m
Revenue
3
934 . 8
—
93 4. 8
8 89.0
—
8 89.0
Cost of sales
(586.9)
—
(586.9)
(62 5 . 4)
—
(6 2 5 . 4)
Gross profit
3 4 7. 9
—
3 4 7. 9
26 3.6
—
263 .6
Distribution costs
(81 . 3)
—
(81 . 3)
(7 7. 9)
—
(7 7. 9)
Administrative costs
(196.3)
(2 . 8)
(1 99 .1)
(1 6 8 . 4)
(3. 2)
(17 1. 6)
Impairment of trade receivables
(1 .6)
—
(1. 6)
(3 .5)
—
(3. 5)
Loss on disposal of property, plant and equipment
(1 . 4)
—
(1 . 4)
(0 . 3)
—
(0 . 3)
Impairment of property, plant and equipment
(0 . 2)
—
(0. 2)
—
—
—
Operating profit/(loss)
7
6 7. 1
(2 . 8)
64.3
13 . 5
(3 . 2)
1 0.3
Finance costs
8
(1 4 .0)
(3 .8)
(1 7. 8)
(13 . 2)
(12. 2)
(25 . 4)
Profit/(loss) before taxation
53 .1
(6 . 6)
46. 5
0. 3
(1 5 . 4)
(1 5.1)
Taxation
9
(14. 8)
1.6
(13. 2)
(0 . 3)
3 .9
3 .6
Profit/(loss) for the year
38. 3
(5 .0)
33 .3
—
(11. 5)
(1 1. 5)
2024
2023
Earnings/(loss) per ordinary share attributable to the owners of the parent during the year (note 10)
Basic earnings/(loss) per share
19. 3p
(6 . 6)p
Diluted earnings/(loss) per share
18 . 8p
(6 . 6)p
Consolidated Income Statement
Year ended 30 June 2024
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Financial Statements
Consolidated Statement of Comprehensive Income
Year ended 30 June 2024
20242023
Note£m£m
Profit/(loss) for the year
33 . 3
(1 1. 5)
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Currency translation differences of foreign subsidiaries
0.1
(0 . 6)
Gain on net investment hedges
0.8
0.4
(Loss)/gain on cash flow hedges in the year
(1 .3)
3 .7
Cash flow hedges transferred to profit or loss
(1. 6)
(1 . 4)
Taxation relating to the items above
9
(0 .6)
(0 . 4)
(2 .6)
1.7
Items that will not be reclassified to profit or loss:
Net actuarial loss on post-employment benefits
22
(5. 6)
(14 .1)
Taxation relating to the items above
9
1.3
3.5
(4 . 3)
(1 0.6)
Total other comprehensive expense
(6 . 9)
(8 . 9)
Total comprehensive income/(expense)
26.4
(20.4)
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Financial Statements
Consolidated Balance Sheet
At 30 June 2024
20242023
Note£m£m
Non-current assets
Goodwill
12
19.7
19.7
Other intangible assets
13
9. 8
6.5
Property, plant and equipment
14
1 14.4
1 1 7. 8
Derivative financial instruments
20
1 .7
4.5
Right-of-use assets
15
8 .1
8.5
Deferred tax assets
9
42 .8
41 .6
196.5
198.6
Current assets
Inventories
16
119.6
12 1.5
Trade and other receivables
17
148 .8
14 5.7
Current tax assets
2 .1
2.3
Derivative financial instruments
20
0. 3
0.6
Cash and cash equivalents
9.3
1.6
28 0.1
27 1 .7
Total assets
476 . 6
470 . 3
20242023
Note£m£m
Current liabilities
Trade and other payables
18
2 20 .1
219.6
Borrowings
19
6 7. 4
49 .3
Lease liabilities
15, 19
3 .1
3.5
Derivative financial instruments
20
0.4
1.8
Current tax liabilities
12 .9
6 .7
Provisions
24
2. 2
2 .7
30 6 .1
283 .6
Non-current liabilities
Borrowings
19
65 .0
1 09.8
Lease liabilities
15, 19
5.3
5.5
Pensions and other post-employment
benefits
22
29.4
26 .6
Provisions
24
1.4
2.6
Deferred tax liabilities
9
6 .0
5 .1
1 0 7. 1
149.6
Total liabilities
413 . 2
433. 2
Net assets
63.4
3 7. 1
Equity
Issued share capital
25
1 7. 4
1 7. 4
Share premium account
25
68.6
68 .6
Other reserves
25
76 . 3
78 .9
Accumulated losses
(98 . 9)
(1 2 7. 8)
Total equity
63.4
3 7. 1
The financial statements on pages 115 to 171 were approved by the Board of Directors on
16 September 2024 and were signed on its behalf by:
Chris Smith
Director
 
117
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Consolidated Cash Flow Statement
Year ended 30 June 2024
20242023
Note£m£m
Investing activities
Purchase of property, plant and equipment
14
(14 .3)
(10.3)
Purchase of intangible assets
13
(5 . 3)
(1 .7)
Settlement of derivatives used in net
investment hedges
1 .1
0. 4
Net cash used in investing activities
(1 8. 5)
(11 .6)
Financing activities
Drawdown/(repayment) of overdrafts
11 .2
(6 . 2)
Drawdown/(repayment) of other loans
7. 4
(4 . 9)
(Repayment)/drawdown of bank loans
(4 4 . 5)
13 .7
Repayment of IFRS 16 lease obligations
15
(4 . 5)
(4 . 3)
Purchase of own shares
(2 . 8)
—
Net cash used in financing activities
(3 3. 2)
(1.7)
Increase/(decrease) in net cash and cash
equivalents
7. 5
(2 . 2)
Net cash and cash equivalents at the start
ofthe year
1.6
4.5
Currency translation differences
0. 2
(0 .7)
Net cash and cash equivalents at the
endofthe year
9.3
1.6
20242023
Note£m£m
Operating activities
Profit/(loss) before tax
46.5
(15 .1)
Finance costs
8
1 7. 8
25 .4
Exceptional items excluding finance costs
4
0.8
0.8
Share-based payments charge
5
1.6
0. 5
Depreciation of property, plant
andequipment
14
16. 3
16.8
Depreciation of right-of-use assets
15
3.7
3.8
Loss on disposal of property, plant
andequipment
1.4
0.3
Amortisation of intangible assets
13
2 .0
2.4
Impairment of property, plant and equipment
14
0.2
—
Operating cash flow before changes in
working capital and exceptional items
90. 3
34.9
Increase in receivables
(5 . 2)
(1. 3)
Decrease/(increase) in inventories
0. 6
(2 .7)
Increase in payables
—
1 1.1
Operating cash flow after changes in
working capital before exceptional items
8 5.7
42 .0
Additional cash funding of pension scheme
22
(4 . 0)
(4 . 0)
Cash generated from operations
beforeexceptional items
81.7
38 .0
Cash outflow in respect of exceptional items
(1 .0)
(1 . 4)
Cash generated from operations
80.7
36 .6
Interest paid
(1 0. 9)
(1 1 .4)
Refinancing costs paid
(5 . 5)
(12.3)
Taxation paid
(5 .1)
(1 .8)
Net cash generated from
operatingactivities
59. 2
11 .1
118
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Consolidated Statement of Changes in Equity
Year ended 30 June 2024
Other reserves
IssuedShareCash flowCurrencyCapital
sharepremiumhedgetranslationredemptionAccumulatedTotal
capitalaccountreservereservereservelossesequity
Note£m£m£m£m£m£m£m
At 1 July 2023
1 7. 4
68 .6
3.7
(2 . 0)
7 7. 2
(1 2 7. 8)
3 7. 1
Profit for the year
—
—
—
—
—
33 .3
33 .3
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Currency translation differences of foreign subsidiaries
—
—
—
0.1
—
—
0.1
Gain on net investment hedges
20
—
—
—
0.8
—
—
0.8
Loss on cash flow hedges in the year
20
—
—
(1 .3)
—
—
—
(1 .3)
Cash flow hedges transferred to profit or loss
—
—
(1.6)
—
—
—
(1 .6)
Taxation relating to the items above
9
—
—
(0. 6)
—
—
—
(0 . 6)
—
—
(3 .5)
0.9
—
—
(2 .6)
Items that will not be reclassified to profit or loss:
Net actuarial loss on post-employment benefits
22
—
—
—
—
—
(5 .6)
(5 .6)
Taxation relating to the items above
9
—
—
—
—
—
1.3
1.3
—
—
—
—
—
(4 . 3)
(4 . 3)
Total other comprehensive (expense)/income
—
—
(3 .5)
0.9
—
(4 . 3)
(6 . 9)
Total comprehensive (expense)/income
—
—
(3 .5)
0.9
—
29.0
26. 4
Transactions with owners of the parent
Purchase of own shares
—
—
—
—
—
(2 .8)
(2 . 8)
Share-based payments
—
—
—
—
—
1.6
1.6
Taxation relating to the items above
—
—
—
—
—
1 .1
1 .1
At 30 June 2024
1 7. 4
68 .6
0. 2
(1 .1)
7 7. 2
(98 . 9)
63 .4
At 30 June 2024, the accumulated losses include a deduction of £3.2 million (2023: £0 .4m) for the cost of own shares held in relation to employee share schemes. Further information on
own shares is presented in note 25.
 
119
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Consolidated Statement of Changes in Equity continued
Year ended 30 June 2024
Other reserves
IssuedShareCash flowCurrencyCapital
sharepremiumhedgetranslationredemptionAccumulatedTotal
capitalaccountreservereservereservelossesequity
Note£m£m£m£m£m£m£m
At 1 July 2022
1 7. 4
68.6
1. 8
(1 . 8)
7 7. 2
(1 06 . 2)
5 7. 0
Loss for the year
—
—
—
—
—
(11. 5)
(1 1. 5)
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Currency translation differences of foreign subsidiaries
—
—
—
(0 . 6)
—
—
(0 . 6)
Gain on net investment hedges
20
—
—
—
0.4
—
—
0.4
Gain on cash flow hedges in the year
20
—
—
3 .7
—
—
—
3 .7
Cash flow hedges transferred to profit or loss
—
—
(1 . 4)
—
—
—
(1 . 4)
Taxation relating to the items above
9
—
—
(0 . 4)
—
—
—
(0 . 4)
—
—
1.9
(0 . 2)
—
—
1 .7
Items that will not be reclassified to profit or loss:
Net actuarial loss on post-employment benefits
22
—
—
—
—
—
(14 .1)
(14 .1)
Taxation relating to the items above
9
—
—
—
—
—
3. 5
3.5
—
—
—
—
—
(1 0.6)
(10.6)
Total other comprehensive income/(expense)
—
—
1.9
(0 . 2)
—
(10. 6)
(8 . 9)
Total comprehensive income/(expense)
—
—
1 .9
(0 . 2)
—
(2 2 .1)
(20.4)
Transactions with owners of the parent
Share-based payments
—
—
—
—
—
0. 5
0.5
At 30 June 2023
1 7. 4
68.6
3 .7
(2 . 0)
7 7. 2
(1 2 7. 8)
3 7. 1
120
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements
Year ended 30 June 2024
The Group’s base case forecasts are based on the Board-approved budget and three-year
plan. They indicate sufficient liquidity, debt cover and interest cover throughout the going
concern review period to ensure compliance with current banking covenants. The Group’s
base case scenario assumes:
• revenue growth of c.4% per annum, driven predominantly by volume increases;
• raw material prices stabilising after the exceptional levels of input cost inflation seen in
the previous two years;
• interest rates reducing in line with current market expectations; and
• a Sterling to Euro exchange rate of £1:€1.15.
The Directors have considered the Group’s principal risks with the highest likelihood of
occurrence or the severest impact, and the adverse effect this would have on the Group’s
financial forecasts. Changing market, customer and consumer dynamics could adversely
impact revenue growth. Lack of supply chain resilience influences raw material and
packaging input costs. Economic, political and macro environment instability potentially
affects both revenue growth and input costs, in addition to market interest rates and
foreign exchange rates. Considering these risks, together with the risk that the Group’s
revolving credit facility is reduced as part of the upcoming refinancing project, a severe
but plausible downside scenario to stress test the Group’s financial forecasts has been
modelled, with the following assumptions:
• no revenue growth in 2025;
• revenue growth reducing to 1% in 2026 and 2027, being half of the Group’s long-term
target of 2%;
• an increase in raw material and packaging input costs compared to latest forecasts;
• interest rates increasing by 100 basis points;
• Sterling appreciating significantly against the Euro to £1:€1.25; and
• revolving credit facility reducing from €175 million to €150 million.
In the event that such a severe but plausible downside risk scenario occurs, the Group
would remain compliant with current banking covenants.
After reviewing the current liquidity position and financial forecasts, stress testing for
potential risks and considering the uncertainties described above, and based on the
currently committed funding facilities, the Directors have a reasonable expectation that
the Group has sufficient resources to continue in operational existence and without
significant curtailment of operations for the foreseeable future. For these reasons the
Directors continue to adopt the going concern basis of accounting in preparing the Group
financial statements.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. The Board of McBride plc assesses the
financial performance and position of the Group and makes strategic decisions. Therefore,
the Board of McBride plc has been identified as the chief operating decision maker.
1. Corporate information
McBride plc (‘the Company’) is a public company limited by shares incorporated and
domiciled in the United Kingdom and registered in England and Wales. The Company’s
ordinary shares are listed on the London Stock Exchange. The registered office of the
Company is Middleton Way, Middleton, Manchester M24 4DP. For the purposes of DTR
6.4.2R, the Home State of McBride plc is the United Kingdom.
The Company and its subsidiaries (together, ‘the Group’) is Europe’s leading manufacturer
and supplier of private label and contract manufactured products for the domestic
household and professional cleaning/hygiene markets. The Company develops and
manufactures products for retailers and brand owners in Europe and the Asia-Pacific
region.
2. Accounting policies
Accounting period
The Group’s annual financial statements are drawn up to 30 June. These financial
statements cover the year ended 30 June 2024 (‘2024’) with comparative amounts for
the year ended 30 June 2023 (‘2023’).
Basis of preparation
The consolidated financial statements on pages 115 to 171 have been prepared on the
going concern basis in accordance with UK-adopted International Accounting Standards
and with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The financial statements have been prepared under the
historical cost convention, modified in respect of the revaluation to fair value of financial
assets and liabilities (derivative financial instruments) at fair value through profit or loss,
assets held for sale and defined benefit pension plan assets.
A summary of the material accounting policies is set out below. The accounting policies
that follow set out those policies that apply in preparing the financial statements for the
year ended 30 June 2024 and the Group and Company have applied the same policies
throughout the year.
Going concern
The Group’s business activities, together with the factors likely to affect its future
development, performance and position, are set out in the Strategic Report. The financial
position of the Group, its cash flows, liquidity position and borrowing facilities are
described in the CFO’s Report on pages 19 to 20. In addition, notes 20 and 21 includes
the Group’s objectives, policies and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and hedging activities; and its
exposures to credit and liquidity risks. The Group meets its funding requirements through
internal cash generation and bank credit facilities. At 30 June 2024, liquidity, as defined in
note 2, amounted to £98.3 million.
121
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Subsidiaries are all entities over which the Group has control. The Group controls an entity
where the Group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. The Group’s results, cash flows and assets and liabilities include
those of each of its subsidiaries from the date on which the Group obtains control until
such time as the Group loses control.
Intra-group balances and transactions, and any unrealised gains and losses arising from
intra-group transactions, are eliminated on consolidation. Consistent accounting policies
are adopted across the Group.
Business combinations
A business combination is a transaction or other event in which the Group obtains
control of one or more businesses. Business combinations are accounted for using the
acquisition method.
Goodwill arising in a business combination represents the excess of the sum of the
consideration transferred, the amount of any non-controlling interest in the acquired
business and, in a business combination achieved in stages, the fair value at the
acquisition date of the Group’s previously held equity interest, over the net total of the
identifiable assets and liabilities of the acquired business at the acquisition date. If the
identifiable assets and liabilities of the acquired business exceed the aggregate of the
consideration transferred, the amount of any non-controlling interest in the business and
the fair value at the acquisition date of any previously held equity interest, the excess is
recognised as a gain in profit or loss. The fair value of assets and liabilities can be revised
up to twelve months following the date of acquisition.
Consideration transferred in a business combination represents the sum of the fair values
at the acquisition date of the assets given, liabilities incurred or assumed and equity
instruments issued by the Group in exchange for control over the acquired business.
Acquisition-related costs are charged to profit or loss in the year in which they
are incurred.
Changes in the amount of contingent consideration payable that result from events after
the acquisition date, such as meeting a revenue or profit target, are not measurement
period adjustments and are, therefore, recognised in profit or loss.
Any non-controlling interest in the acquired business is measured either at fair value or at
the non-controlling interest’s proportionate share of the identifiable assets and liabilities
of the business.
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of
control are accounted for within equity.
If the Group loses control of a subsidiary, it derecognises the assets and liabilities and
related equity components of the subsidiary and measures any investment retained in the
former subsidiary at its fair value at the date when control is lost. Any gain or loss on a
loss of control is recognised in profit or loss.
2. Accounting policies continued
Segmental reporting continued
Financial information is presented to the Board by product technology for the purposes
of allocating resources within the Group and assessing the performance of the Group’s
businesses. There are five separately managed and accountable business divisions:
• Liquids;
• Unit Dosing;
• Powders;
• Aerosols; and
• Asia Pacific.
Intra-group revenue from the sale of products is agreed between the relevant
customer-facing units and eliminated in the segmental presentation that is presented
to the Board. Most overhead costs are directly attributed within the respective
divisions’ income statements. Central overheads are allocated to a reportable segment
proportionally using an appropriate cost driver. Corporate costs, which include the costs
associated with the Board and the Executive Leadership Team, governance and listed
company costs. The costs of certain Group functions (mostly associated with financial
disciplines such as treasury) are reported separately. Exceptional items are detailed in
note 4 and are not allocated to the reportable segments as this reflects how they are
reported to the Board. Finance expense and income are not allocated to the reportable
segments, as the Group Treasury function manages this activity, together with the overall
net debt position of the Group.
The Board uses adjusted operating profit to measure the profitability of the Group’s
businesses. Adjusted operating profit is, therefore, the measure of segment profit
presented in the Group’s segment disclosures. Adjusted operating profit represents
operating profit before specific items that are considered to hinder comparison of
the trading performance of the Group’s businesses either year on year or with other
businesses. During the years under review, the items excluded from operating profit
in arriving at adjusted operating profit were the amortisation of intangible assets and
exceptional items. Adjusted operating profit is not defined under IFRS and is therefore
termed a non-GAAP measure. The rationale for using this measure, along with a
reconciliation from the nearest measures prepared in accordance with IFRS, is discussed
in alternative performance measures on page 132.
Segment information is presented in note 3.
Principal accounting policies
The Group and Company financial statements are presented in Pounds Sterling and all
values are rounded to the nearest million Pounds (£m) except where otherwise indicated.
Basis of consolidation
The consolidated financial statements include the results, cash flows and assets
and liabilities of the Group and its subsidiaries. Details of the Group’s subsidiaries at
30 June 2024 are set out on pages 179 and 180.
122
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Payment is typically due 60 days after despatch. The Group has an obligation for
returns due to damages and recognises a credit note provision and corresponding
adjustment to revenue.
The Group acts as an agent in some jurisdictions in relation to environmental taxes
collected from customers and paid to third parties. There is no impact to the consolidated
income statement for the collection and payment of these taxes.
Exceptional items
Exceptional items are material either individually or, if of a similar type, in aggregate
and which, due to their nature or the infrequency of the events giving rise to them, are
presented separately to assist users of the financial statements in assessing the underlying
trading performance and trends of the Group’s businesses either year-on-year or with
other businesses.
Examples of exceptional items include, but are not limited to, the following:
• costs arising from significant restructuring projects deemed to be of sufficient scale
and impact to fundamental business reshaping;
• restructuring and other expenses relating to the integration of an acquired business
and related expenses for reconfiguration of the Group’s activities;
• impairment of current and non-current assets;
• gains/losses on disposals of businesses;
• acquisition-related costs, including adviser fees incurred for significant transactions,
and adjustments to the fair values of assets and liabilities that result in non-recurring
charges to the income statement; and
• costs arising because of material and non-recurring regulatory and litigation matters.
Borrowing costs
Borrowing costs directly attributable to the construction of a manufacturing or
distribution facility are capitalised as part of the cost of the facility if, at the outset of
construction, the facility was expected to take a substantial period of time to get ready
for its intended use.
Costs attributable to the arrangement of term borrowing facilities are amortised over the
life of those facilities.
All other borrowing costs are recognised in profit or loss in the year in which they
are incurred.
Goodwill
Goodwill arising in a business combination is recognised as an intangible asset and is
allocated to the cash-generating unit (CGU) or group of CGUs that are expected to
benefit from the synergies of the acquisition.
Goodwill is not amortised but is tested for impairment annually and whenever there are
events or changes in circumstances that indicate that its carrying amount may not be
recoverable.
Goodwill is carried at cost less any recognised impairment losses. Impairment charges are
recognised in administrative expenses.
2. Accounting policies continued
Principal accounting policies continued
Foreign currency translation
The Group’s presentational currency is Pound Sterling. At an entity level, transactions in
foreign currencies are translated into the entity’s functional currency at the exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rate ruling at the balance sheet date. Currency
translation differences arising at entity level are recognised in profit or loss.
On consolidation, the results of foreign operations are translated into Pound Sterling at
the average exchange rate for the year and their assets and liabilities are translated into
Pound Sterling at the exchange rate ruling at the balance sheet date. Currency translation
differences arising on consolidation are recognised in other comprehensive income and
taken to the currency translation reserve.
In the event that a foreign operation is sold, the gain or loss on disposal recognised in
profit or loss is determined after taking into account the cumulative currency translation
differences arising on consolidation of the operation subsequent to the adoption of IFRS.
In the cash flow statement, the cash flows of foreign operations are translated into
Sterling at the average exchange rate for the year.
Revenue
Revenue from contracts with customers from the sale of goods is measured at the
invoiced amount, net of sales rebates, discounts, value added tax and other sales taxes.
Revenue is recognised on the transfer of the control of goods upon delivery of the goods
to the customer when the significant risks and rewards of ownership are passed to the
customer and when all contractual performance obligations have been met.
Accruals for sales rebates and discounts are established at the time of sale based on
management’s judgement of the amounts payable under the contractual arrangements
with the customer.
The estimated rebates or discounts payable do not contain significant estimates as they
are mostly contractually driven and are based on, amongst other things, expected sales
to the customer during the period to which the rebate or discount relates, historical
experience and market information.
The type of rebates and discounts given by the Group include:
• volume-related rebates for achieving sales targets within a set period; and
• promotional, marketing and other allowances to support specific promotional pricing
discounts, in-store displays and cost reimbursement.
At 30 June 2024, the carrying amount of accruals relating to rebates and discounts
amounted to £3.7 million (2023: £2.8m). Rebates equate to less than 1.0% (2023: less than
1.0%) of revenue and are not considered to be a critical judgement. There is an element of
judgement applied to the level of future achieved sales within volume-related rebates.
123
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Property, plant and equipment acquired in a business combination is depreciated on a
straight-line basis so as to charge its fair value at the date of acquisition, less any residual
value, to profit or loss over the remaining expected useful life of the asset.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e. the date the underlying asset is available for use). Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred, and lease payments made on
or before the commencement date less any lease incentives received. Unless the Group
is reasonably certain to obtain ownership of the leased asset at the end of the lease
term, the recognised right-of-use assets are depreciated on a straight-line basis over the
shorter of its estimated useful life and the lease term. Right-of-use assets are subject to
impairment.
Lease liabilities
The Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including
in-substance fixed payments), variable lease payments that depend on an index or
a rate, amounts expected to be paid under residual value guarantees, less any lease
incentives receivable.
In determining the relevant cash flows within a contract for each lease component,
the Group has made use of the practical expedient available under IFRS 16 not to separate
non-lease components from lease components, and instead accounts for each lease
component and any associated non-lease components as a single lease component.
The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating a lease,
if the lease term reflects the Group exercising the option to terminate. The variable lease
payments that do not depend on an index or a rate are recognised as an expense in the
year in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental
borrowing rate at the lease commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the in-substance fixed lease payments or a change
in the assessment to purchase the underlying asset.
The Group determines the lease term as the non-cancellable term of the lease, together
with any periods covered by an option to extend the lease if it is reasonably certain to be
exercised, or any periods covered by an option to terminate the lease, if it is reasonably
certain not to be exercised.
2. Accounting policies continued
Principal accounting policies continued
Other intangible assets
Other intangible assets are stated at cost less accumulated amortisation and any
recognised impairment loss. Amortisation is recognised in administrative expenses.
(i) Assets acquired in business combinations
An intangible resource acquired in a business combination is recognised as an intangible
asset if it is separable from the acquired business or arises from contractual or legal rights.
An acquired intangible asset with a definite useful life is amortised on a straight-line basis
so as to charge its fair value at the date of acquisition to profit or loss over its expected
useful life as follows:
Patents, brands and trademarks – up to five years
Customer relationships – up to eight years
(ii) Product development costs
All research expenditure is charged to profit or loss in the year in which it is incurred.
Development expenditure is charged to profit or loss in the year in which it is incurred
unless it relates to the development of a new or significantly improved product or process
whose technical and commercial feasibility is proven at the time of development and
therefore capitalised as an intangible asset. Development expenditure is measured at cost
and amortised on a straight-line basis over the expected useful life, which is in the range
of three to five years.
(iii) Computer software
Computer software and software licences are recognised as intangible assets measured
at cost and are amortised on a straight-line basis over their expected useful lives, which
are in the range of three to five years.
Directly attributable costs that are capitalised as part of computer software include the
related software development employee costs.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any
recognised impairment losses.
Cost includes the original purchase price of the asset and the costs attributable to
bringing the asset to its working condition for its intended use by management.
Freehold land and freehold buildings are presented as land and buildings. Freehold land
and payments on account and assets in the course of construction are not depreciated.
Otherwise, property, plant and equipment is depreciated on a straight-line basis so as to
charge its cost, less any residual value, to profit or loss over the expected useful life of the
asset as follows:
Freehold buildings – 50 years
Plant and equipment – three to ten years
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Financial Statements
Notes to the Consolidated Financial Statements continued
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Inventories
Inventories are stated at the lower of cost and net realisable value with due allowance
for any excess, obsolete or slow-moving items. Cost represents the expenditure incurred
in bringing each product to its present location and condition. The cost of raw materials
is measured on a first-in, first-out (FIFO) basis. The cost of finished goods and work
in progress comprises the cost of raw materials, direct labour and other direct costs,
together with related production overheads based on normal operating capacity.
Net realisable value is the estimated selling price less estimated costs of completion
and estimated selling and distribution costs.
Financial instruments
The Group classifies its financial assets in the following categories:
• those to be measured subsequently at fair value (either through other comprehensive
income (OCI) or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial
assets and the contractual terms of the cash flows. For assets measured at fair value,
gains and losses will either be recorded in profit or loss or OCI. The Group reclassifies debt
instruments when, and only when, its business model for managing those assets changes.
At initial recognition, the Group measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss (FVPL), transaction costs
that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when
determining whether their cash flows are solely payment of principal and interest.
Subsequent measurement of debt instruments depends on the Group’s business model
for managing the asset and the cash flow characteristics of the asset. There are three
measurement categories into which the Group classifies its debt instruments:
• amortised cost: Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured
at amortised cost. Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other
gains/(losses) together with foreign exchange gains and losses. Impairment losses are
presented as a separate line item in the statement of profit or loss. The Group assesses
on a forward-looking basis the expected credit losses (ECL) associated with its debt
instruments carried at amortised cost. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. ECLs are recognised in
two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next twelve months (a twelve-month ECL).
For those credit exposures for which there has been a significant increase in credit risk
since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL);
2. Accounting policies continued
Principal accounting policies continued
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases
of machinery and equipment (i.e. those leases that have a lease term of twelve months or
less from the commencement date and do not contain a purchase option). It also applies
the lease of low-value assets recognition exemption to leases of office equipment that are
considered of low value (i.e. below £5,000). Lease payments on short-term leases and
leases of low-value assets are recognised as an expense on a straight-line basis over the
lease term.
Impairment of non-financial assets
Goodwill, other intangible assets and property, plant and equipment are tested for
impairment whenever events or circumstances indicate that their carrying amounts may
not be recoverable. Additionally, goodwill is subject to an annual impairment test whether
or not there are any indicators of impairment.
An asset is impaired to the extent that its carrying amount exceeds its recoverable
amount, which represents the higher of the asset’s value-in-use and its fair value less
costs of disposal. An asset’s value-in-use represents the present value of the future cash
flows expected to be derived from the continued use of the asset. Fair value less costs of
disposal is the amount obtainable from the sale of the asset in an arm’s length transaction
between knowledgeable, willing parties, less the costs of disposal.
Where it is not possible to estimate the recoverable amount of an individual asset,
the recoverable amount is determined for the cash-generating unit (CGU) to which the
asset belongs. An asset’s CGU is the smallest group of assets that includes the asset and
generates cash inflows that are largely independent of the cash inflows from other assets
or groups of assets. Goodwill does not generate cash flows independently of other assets
and is, therefore, tested for impairment at the level of the CGU or group of CGUs to which
it is allocated.
Value-in-use is based on estimates of pre-tax cash flows discounted at a pre-tax discount
rate that reflects the risks specific to the CGU to which the asset belongs.
Where necessary, impairment of non-financial assets other than goodwill is recognised
before goodwill is tested for impairment. When goodwill is tested for impairment and
the carrying amount of the CGU or group of CGUs to which it is allocated exceeds its
recoverable amount, the impairment is allocated first to reduce the carrying amount of
the goodwill and then to the other non-financial assets belonging to the CGU or group
of CGUs pro-rata on the basis of their respective carrying amounts.
Impairment losses are recognised in profit or loss. Impairment losses recognised in
previous years for assets other than goodwill are reversed if there has been a change in
the estimates used to determine the asset’s recoverable amount, but only to the extent
that the carrying amount of the asset does not exceed its carrying amount had no
impairment been recognised in previous years. Impairment losses recognised in respect
of goodwill cannot be reversed.
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Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
(iii) Trade payables
Trade payables are initially recognised at fair value and subsequently held at amortised cost.
(iv) Bank and other loans
Bank and other loans are initially recognised at fair value, net of directly attributable
transaction costs, if any, and are subsequently measured at amortised cost using the
effective interest rate method.
(v) Net debt
Net debt comprises cash and cash equivalents, overdrafts, bank and other loans and
lease liabilities.
(vi) Derivative financial instruments
The Group uses derivative financial instruments, principally forward currency contracts
and interest rate caps, to reduce its exposure to exchange rate and interest rate
movements. The Group does not hold or issue derivatives for speculative purposes.
Derivative financial instruments are recognised as assets and liabilities measured at their
fair values at the balance sheet date. Changes in their fair values are recognised in profit
or loss. Derivative financial instruments are, therefore, likely to cause volatility in profit or
loss in situations where the hedged item is not recognised in the financial statements or
is recognised but its carrying amount is not adjusted to reflect fair value changes arising
from the hedged risk, or is so adjusted but that adjustment is not recognised in profit or
loss. Provided the conditions specified by IFRS 9, ‘Financial instruments’ are met, hedge
accounting may be used to mitigate this volatility in profit or loss.
Derivative financial instruments are classified as current assets or liabilities unless they
are in a designated hedging relationship and the hedge item is classified as a non-current
asset or liability. Derivative financial instruments that are not in a designated hedging
relationship are classified as FVPL.
(vii) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet
where there is a legally enforceable right to offset the recognised amounts, and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously .
Hedge accounting
For a hedging relationship to qualify for hedge accounting, it must be documented on
inception together with the Group’s risk management objective and strategy for initiating
the hedge, and it must both be expected to be highly effective in offsetting the changes
in cash flows or fair value attributed to the hedged risk and actually be highly effective in
doing so. When hedge accounting is used, the hedging relationship is classified as a cash
flow hedge or a net investment hedge.
When forward contracts are used to hedge forecast transactions, the Group generally
designates the change in the fair value of the forward contract related to both the spot
component and forward element as the hedging instrument. For option contracts the
change in the fair value of the option contract related to the intrinsic value is designated
as the hedging instrument. The time value of money is treated as the cost of hedging.
2. Accounting policies continued
Principal accounting policies continued
Financial instruments continued
• fair value through other comprehensive income (FVOCI): Assets that are held for
collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured
at FVOCI. Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest income and foreign exchange
gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in other gains/(losses). Interest income
from these financial assets is included in finance income using the effective interest
rate method. Foreign exchange gains and losses are presented in other gains/(losses)
and impairment expenses are presented as a separate line item in the statement of
profit or loss; and
• fair value through profit or loss (FVPL): Assets that do not meet the criteria for
amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the year in which it arises.
(i) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision for
impairment. Under the Group’s business model, trade and other receivables are held
for collection of contractual cash flows and represent solely payments of principal and
interest. A provision for impairment of trade receivables is established based on the
expected credit loss.
For trade receivables and contract assets, the Group applies the IFRS 9 simplified
approach in calculating ECLs. Therefore, the Group does not track changes in credit
risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting
date. The Group has established a provision matrix that is based on shared credit risk
characteristics, its historical credit loss experience and days past due, adjusted for
forward-looking factors specific to the debtors and the economic environment. The
amount of the provision is recognised in the balance sheet within trade receivables.
Movements in the provision are recognised in the profit and loss account in administrative
expenses.
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits available on demand and
other short-term, highly liquid investments with a maturity on acquisition of three months
or less and bank overdrafts. Bank overdrafts are presented as current liabilities to the
extent that there is no right of offset or intention to offset with cash balances.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Payments to defined contribution schemes are recognised in profit or loss in the year in
which they fall due. To the extent defined contribution scheme contributions are due but
unpaid, amounts outstanding are recognised in other payables.
(ii) Defined benefit schemes
Under a defined benefit pension scheme, the amount of pension that an employee will
receive on retirement is fixed based on factors such as pensionable salary, years of service
and age on retirement. In most cases, the schemes are funded by contributions from
the Group and the participating employees. The Group is obliged to make additional
contributions if the Fund has insufficient assets to meet its obligation to pay accrued
pension benefits.
Actuarial valuations of the defined benefit schemes are carried out annually at the balance
sheet date by independent qualified actuaries. Scheme assets are measured at their fair
value at the balance sheet date. Benefit obligations are measured on an actuarial basis
using the projected unit credit method and are discounted using the market yields on
high-quality corporate bonds at the balance sheet date. The defined benefit liability or
asset recognised in the balance sheet comprises the difference between the present
value of the benefit obligations and the fair value of the scheme assets. Where a scheme
is in surplus, the asset recognised is limited to the present value of any amounts that the
Group expects to recover by way of refunds or a reduction in future contributions.
Defined benefit schemes are recognised in profit or loss by way of the service cost and
the net interest cost on the benefit obligation. The service cost represents the increase in
the present value of the benefit obligation relating to additional years of service accrued
during the year, less employee contributions.
Gains or losses on curtailments or settlements are recognised in profit or loss in the year
in which the curtailment or settlement occurs.
Actuarial gains and losses are recognised in other comprehensive income in the year in
which they occur.
Share-based payments
The Group operates share schemes under which it grants equity-settled and cash-settled
awards over ordinary shares in the Company to certain of its employees. The Group
recognises a compensation expense that is based on the fair value of the awards measured
using the Black-Scholes option pricing formula or the Monte Carlo valuation model.
For equity-settled awards, the fair value reflects market performance conditions and all
non-vesting conditions. Fair value is determined at the grant date and is not subsequently
remeasured unless the relevant conditions are modified. Adjustments are made to the
compensation expense to reflect actual and expected forfeitures due to failure to satisfy
service conditions or non-market performance conditions. For cash-settled awards at
each reporting date, the estimate of the number of options that are expected to vest is
revised based on the non-market vesting and service conditions.
2. Accounting policies continued
Principal accounting policies continued
Hedge accounting continued
(i) Cash flow hedge
Hedging relationships are classified as cash flow hedges where the hedging instrument
hedges exposure to variability in cash flows that is attributable either to a particular risk
associated with a recognised asset or liability (such as interest payments on variable
rate debt), a highly probable forecast transaction (such as forecast revenue) or a firm
commitment that could affect profit or loss.
Where a hedging relationship is classified as a cash flow hedge, to the extent that the
hedge is effective, the change in the fair value of the hedging instrument is recognised
in other comprehensive income rather than in profit or loss. The gain or loss relating to
the ineffective portion is recognised immediately in profit and loss. When the hedged
item affects profit or loss (for example, when a forecast sale that is hedged takes place),
the cumulative gain or loss recognised in other comprehensive income is transferred to
profit or loss. When a forecast transaction that has been hedged results in the recognition
of a non-financial asset (for example, inventory), the cumulative gain or loss recognised
in other comprehensive income is transferred from equity as an adjustment to the cost
of the asset.
When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in equity at that time
remains in equity and is recognised when the forecast transaction is ultimately recognised
in the income statement. When a forecast transaction is no longer expected to occur,
the cumulative gain or loss that was reported in equity is immediately transferred to the
income statement.
(ii) Net investment hedge
A net investment hedge is the hedge of the currency exposure on the retranslation of the
Group’s net investment in a foreign operation. Net investment hedges are accounted for
similarly to cash flow hedges. Changes in the fair value of the hedging instrument are, to
the extent that the hedge is effective, recognised in other comprehensive income. In the
event that the foreign operation is disposed of, the cumulative gain or loss recognised in
other comprehensive income is transferred to profit or loss and included in the gain or
loss on disposal of the foreign operation.
Pensions and other post-employment benefits
Post-employment benefits principally comprise pension benefits provided to employees
in the UK and Continental Europe. The Group operates both defined benefit and defined
contribution pension schemes.
(i) Defined contribution schemes
Under a defined contribution pension scheme, the Group makes fixed contributions
to a separate pension fund. The amount of pension that the employee will receive on
retirement is dependent entirely on the investment performance of the Fund and the
Group has no obligation with regard to the future pension values received by employees.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Deferred tax is tax expected to be payable or recoverable on differences between the
carrying amount of an asset or liability and its tax base used in calculating taxable profit.
Deferred tax is accounted for using the liability method, whereby deferred tax liabilities
are generally recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available in the
future against which the deductible temporary differences may be utilised.
Deferred tax assets and liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial recognition of other assets
and liabilities in a transaction other than a business combination that affects neither
accounting profit nor taxable profit.
Deferred tax is provided on temporary differences arising on investments in foreign
subsidiaries, except where the Group is able to control the reversal of the temporary
difference and it is probable that it will not reverse in the foreseeable future.
Deferred tax is calculated using the enacted or substantively enacted tax rates that are
expected to apply when the asset is recovered or the liability is settled.
Current tax assets and liabilities are offset when there is a legally enforceable right to set
off the amounts and management intends to settle on a net basis. Deferred tax assets and
liabilities are offset where there is a legally enforceable right to set off current tax assets
and liabilities and the deferred tax assets and liabilities relate to income taxes levied by
the same taxation authority on the same taxable entity.
Current tax and deferred tax is recognised in profit or loss unless it relates to an item
that is recognised in the same or a different year outside profit or loss, in which case it
too is recognised outside profit or loss, either in other comprehensive income or directly
in equity.
Where there is uncertainty as to whether treatments in the tax return will be accepted by
a taxation authority, the judgements and estimates made in recognising and measuring
the uncertainty are based on information available at the time. The Group reassesses
these judgements and estimates if the facts and circumstances change or new information
becomes available. This may include, but is not restricted to, examination by a taxation
authority, implicit or explicit acceptance by a taxation authority of a particular tax
treatment, the expiry of the taxation authority’s right to examine or re-examine a tax
treatment and changes in legislation.
Payments to shareholders
Dividends paid and received are included in the Company financial statements in the
year in which the related dividends are actually paid or received or, in respect of the
Company’s final dividend for the year, approved by shareholders.
It is the Board’s intention that any future dividends will be final dividends paid annually in
cash, not by the allotment and issue of B Shares. Consequently, the Board is not seeking
shareholder approval at the 2024 AGM to capitalise reserves for the purposes of issuing
B Shares or to grant Directors the authority to allot such shares. Existing B Shares will
continue to be redeemable but limited to one redemption date per annum in November
of each year. B Shares issued but not redeemed are classified as current liabilities.
2. Accounting policies continued
Principal accounting policies continued
Share-based payments continued
Generally, the compensation expense is recognised on a straight-line basis over the
vesting period. For equity-settled awards, a corresponding credit is recognised in equity
while for cash-settled awards at each reporting date, a corresponding liability to settle is
recognised in the balance sheet.
In the event of the cancellation of an equity-settled award, the compensation expense
that would have been recognised over the remainder of the vesting period is recognised
immediately in profit or loss.
Provisions
A provision is a liability of uncertain timing or amount and is generally recognised when
the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that a payment will be required to settle the obligation and the payment can be
estimated reliably.
Provision is made for restructuring costs when a detailed formal plan for the restructuring
has been determined and the plan has been communicated to the parties that may be
affected by it. Gains from the expected disposal of assets are not taken into account in
measuring restructuring provisions and provision is not made for future operating losses.
At 30 June 2024, the Group held provisions amounting to £3.6 million (2023: £5.3m),
which principally represented reorganisation and restructuring costs and environmental
remediation provisions. Adjustment to the amounts recognised would arise if it becomes
necessary to revise the assumptions and estimates on which the provisions are based,
if circumstances change such that contingent liabilities must be recognised or if
management becomes aware of obligations that are currently unknown.
Provisions are discounted where the effect of the time value of money is material.
Contingent liabilities
The Group recognises provisions for liabilities when it is more likely than not that a
settlement will be required and the value of such a payment can be reliably estimated.
There are a number of contingent liabilities that arise in the normal course of business
which, if realised, are not expected to result in a material liability to the Group.
Taxation
Current tax is the amount of tax payable or recoverable in respect of the taxable profit
or loss for the year. Taxable profit differs from accounting profit because it excludes
income or expenses that are recognised in the year for accounting purposes but are either
not taxable or not deductible for tax purposes or are taxable or deductible in earlier or
subsequent years. Current tax is calculated using tax rates that have been enacted or
substantively enacted at the balance sheet date.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
New accounting standards and interpretations issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective,
up to the date of issuance of the Group’s financial statements are disclosed below.
The Group intends to adopt these new and amended standards and interpretations,
if applicable, when they become effective.
• Amendments to IAS 1, aiming to promote consistency in applying the requirements by
helping companies determine whether, in the statement of financial position, debt and
other liabilities with an uncertain settlement date should be classified as current (due
or potentially due to be settled within one year) or non-current – effective for annual
periods beginning on or after 1 January 2024.
• Amendments to IFRS 16, clarifying how a seller-lessee subsequently measures
sale and leaseback transactions effective for annual periods beginning on or after
1 January 2024.
• Amendments to IAS 7 and IFRS 7, adding disclosure requirements and ‘signposts’
within existing disclosure requirements, asking entities to provide qualitative and
quantitative information about supplier finance arrangements – effective for annual
periods beginning on or after 1 January 2024.
• Amendments to IFRS 10, clarifying the accounting treatment for sales or contribution
of assets between an investor and their associates or joint ventures.
• Amendments to IAS 21, to add requirements to help entities to determine whether a
currency is exchangeable into another currency, and the spot exchange rate to use
when it is not. These new requirements will apply from 1 January 2025, with early
application permitted.
None of the amendments are expected to have a significant impact on the Group;
however, the Group will continue to consider these and any additional amendments,
interpretations and new standards to identify potential future impact.
2. Accounting policies continued
Principal accounting policies continued
Own shares
Own shares represent the Company’s ordinary shares that are held by the Company in
treasury or by a sponsored Employee Share Ownership Plan (ESOP) trust in relation to the
Group’s employee share schemes. When own shares are acquired, the cost of purchase in
the market is deducted from equity. Gains or losses on the subsequent transfer or sale of
own shares are also recognised in equity.
New accounting standards and interpretations
The following standards and amendments were effective for periods beginning on or after
1 January 2023, and as such, have been applied in these financial statements. The Group
has not early adopted any other standard or interpretation that is issued but not yet
effective.
• IFRS 17, ‘Insurance Contracts’, replaces IFRS 4, which permitted a wide variety of
practices in accounting for insurance contracts. IFRS 17 fundamentally changes the
accounting by all entities that issue insurance contracts.
• Amendments to IAS 1, requiring companies to disclose their material accounting policy
information rather than their significant accounting policies.
• Amendments to IAS 8, clarifying how companies should distinguish changes in
accounting policies from changes in accounting estimate.
• Amendments to IAS 12, requiring companies to recognise deferred tax on transactions
that, on initial recognition, give rise to equal amounts of taxable and deductible
temporary differences.
• Amendments to IAS 12. The Group has adopted the amendments to IAS 12, ‘Income
Taxes’ – International tax reform: Pillar Two model rules and has applied the temporary
mandatory exception from recognising and disclosing information about deferred tax
assets and liabilities related to Pillar Two income taxes.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Whilst each division is made up of a number of operational sites based in different
locations, sites within a division act as a network to create a product offering for all
customers of that division. Therefore, cash flows arising at any particular site within a
division have a level of dependence upon other assets within the division as a whole.
Furthermore, divisional leadership teams develop strategies for the division as a whole
and are accountable to deliver them, including driving best practices and performance
across the whole division and developing new products at a divisional level based on
specialist product format knowledge. Sales and marketing teams also operate at a
divisional level.
Key sources of estimation uncertainty
(i) Impairment of goodwill allocated to the Liquids CGU
Impairment testing requires management to estimate the recoverable amount of an asset
or group of assets. The recoverable amount represents the higher of value-in-use and
fair value less costs of disposal. Where the recoverable amount is lower than the carrying
amount, an impairment charge is recognised in profit and loss in the year in which the
impairment is identified.
Value-in-use represents the net present value of the net cash flows expected to arise from
an asset or group of assets and its calculation requires management to estimate those
cash flows and to apply a suitable discount rate to them.
Cash flows are estimated by applying assumptions to budgeted sales, production costs
and overheads over a five-year forecast period and by applying a perpetuity growth rate
to the forecast cash flow in the third year.
Forecasts are reviewed and approved by the Board.
Cash flows are discounted using a discount rate that reflects current market assessments
of the time value of money. The discount rate used in each CGU is adjusted for risks
specific to the asset or group of assets. The weighted average cost of capital is affected
by estimates of interest rates, equity returns and market and country-related risks.
Carrying values of goodwill, other intangible assets and property, plant and equipment
are subject to a significant risk of material adjustment due to potential changes in
assumptions in the next twelve months. Sensitivity analysis has been performed in order
to assess the extent to which carrying values of such assets are at risk of impairment.
During the year, impairment charges of £nil were recognised (2023: £nil).
At 30 June 2024, the carrying amount of goodwill, allocated to the Liquids CGU was
£16.0 million (2023: £16.0m).
Details of the assumptions applied and the sensitivity of the carrying amount of goodwill
in relation to the business are presented in note 12.
2. Accounting policies continued
Critical accounting judgements and key sources of estimation uncertainty
In applying the Company’s accounting policies as described in this note, the Directors
are required to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported assets, liabilities, income and expenses that are
not readily identifiable from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant,
including expectations of future events that might have a financial impact on the
Company and that are believed to be reasonable under the circumstances. Actual
outcomes could differ from those estimates and affect the Company’s results in
future years.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The Directors have carefully considered the accounting implications of the following
developments in their review of critical judgements, estimates and assumptions:
• Impacts of high inflation and interest rates: Companies continue to experience the
effect of high inflation and interest rates, which impact all aspects of the business
including increasing costs such as raw materials and wages, changes in customer
behaviour and credit risk, negotiations of contract terms and investment and
financing decisions.
• Climate change: The impact of ESG matters, specifically focused on the effect of
climate change, both from a qualitative and quantitative perspective, continue to
impact companies.
• Global conflicts and sanctions: Global conflicts and the imposition of international
sanctions continue to have a pervasive economic impact worldwide and particularly
where businesses engage in economic activities that might be affected by recent
developments in these areas.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the year in which the estimate is revised if the
revision affects only that year, or in the year of the revision and future years if the revision
affects both current and future years.
Critical judgements
(i) Determination of cash-generating units (CGUs)
A CGU is the smallest group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets. Impairment testing
requires management to determine the net discounted cash flows expected to arise from
a CGU. Management has determined that the Group’s CGUs align with the operating
reportable segments, or divisions, being Liquids, Unit Dosing, Powders, Aerosols and
Asia Pacific. In the case of the first four divisions, segmentation is based on product
technologies. For Asia Pacific, segmentation is based on location of both operations and
the market served. The judgement applied in determining the Group’s CGUs concerns the
level at which cash flows arise independently from other areas of the business.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
(iii) Taxation
Judgements and estimates are required in order to determine the appropriate amount
of tax provided for issues under dispute with taxation authorities and for tax matters
which are considered uncertain and on which it is probable that a future tax liability will
arise. The amount provided is management’s best estimate of the tax liability taking into
consideration external advice, known outcomes on similar tax treatments and experience
of tax authority custom and practice.
At 30 June 2024, the Group estimated its maximum possible tax exposure for ongoing tax
audits and uncertain tax treatments to be £23.2 million (2023: £15.9m), against which a
provision of £1.4 million (2023: £1.6m) has been made, in line with IFRIC 23 requirements.
The Group operates across a number of jurisdictions and tax risk can arise in relation to
the pricing of cross-border transactions. Transfer pricing is inherently subjective and in
determining the appropriate level of provision, the Group considers the probability of
a range of outcomes, using a weighted average methodology to focus risk on the most
likely outcomes in the event of an audit. The amount provided also takes account of
international dispute resolution mechanisms, where available, to mitigate double taxation.
This analysis is reassessed at each year end and the estimates refined as additional
information becomes available. The provision has reduced from that held in the prior year
mainly due to statute of limitation expiries.
The Group believes it has made adequate provision for the liabilities likely to arise from
years which are open and not yet agreed by tax authorities. The ultimate liability for
such matters may vary from the amounts provided however and is dependent upon the
outcome of agreements with relevant tax authorities, dispute resolution processes in the
relevant jurisdictions or litigation where appropriate.
The Group has tax losses and other deductible temporary differences that have the
potential to reduce future tax liabilities. Deferred tax assets are recognised to the extent
that recovery is probable against the future reversal of taxable temporary differences and
projected taxable income. At 30 June 2024, the Group recognised deferred tax assets
of £42.8 million (2023: £41.6m), including £25.8 million (2023: £29.3m) in respect of tax
losses. Deferred tax assets amounting to £7.5 million (2023: £7.5m) were not recognised
in respect of tax losses and tax credits carried forward. The profit projections used to
estimate deferred tax asset recoverability are the same as those used to assess the
carrying value of goodwill and the estimate is therefore sensitive to the same factors as
those set out in note 12. Management estimates that a reduction in the perpetual growth
rate to 0.0% would not result in an impairment of the deferred tax asset.
2. Accounting policies continued
Critical accounting judgements and key sources of estimation uncertainty
continued
Key sources of estimation uncertainty continued
(ii) Pensions and other post-employment benefits
Under IAS 19, ‘Employee benefits’, the cost of defined benefit schemes is determined
based on actuarial valuations that are carried out annually at the balance sheet date.
Actuarial valuations are dependent on assumptions about the future that are made by
the Directors on the advice of independent qualified actuaries. If actual experience differs
from these assumptions, there could be a material change in the amounts recognised by
the Group in respect of defined benefit schemes in the next financial year.
At 30 June 2024, the present value of defined benefit obligations in relation to the
UK scheme was £101.6 million (2023: £98.1m). It was calculated using a number of
assumptions, including future Consumer Price Index rate changes, increases to pension
benefits and mortality rates. The present value of the benefit obligation is calculated by
discounting the benefit obligation using market yields on high-quality corporate bonds
at the balance sheet date.
At 30 June 2024, the fair value of the scheme assets of the UK scheme was £74.1 million
(2023: £73.4m). The scheme assets consist largely of securities and managed funds
whose values are subject to fluctuation in response to changes in market conditions.
A portion of unquoted investments have valuations which precede the reporting date and
where the valuations have been adjusted for cash movements between the last valuation
date and 30 June 2024, using the valuation approach and inputs as at the last valuation
date. Changes in the actuarial assumptions underlying the benefit obligation, changes in
the discount rate applicable to the benefit obligation and effects of differences between
the expected and actual return on the scheme’s assets are classified as actuarial gains
and losses and are recognised in other comprehensive income. During 2024, the Group
recognised a net actuarial loss of £5.6 million (2023: loss of £14.1m).
An analysis of the assumptions that will be used by the Directors to determine the cost
of the defined benefit scheme that will be recognised in profit or loss in the next financial
year and the sensitivity of the benefit obligation to key assumptions is presented in
note 22.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Adjusted profit before tax is based on adjusted operating profit less adjusted finance
costs. Adjusted profit for the year is based on adjusted profit before tax less taxation
relating to non-adjusting items. The table below reconciles adjusted profit before tax to
the Group’s reported profit/ (loss) before tax.
2024 2023
£m £m
Profit/(loss) before tax
46.5
(15.1)
Exceptional items (note 4)
4.6
13.0
Amortisation of intangibles (note 13)
2.0
2.4
Adjusted profit before tax
53.1
0.3
Taxation (note 9)
(14.8)
(0.3)
Adjusted profit for the year
38.3
—
Adjusted EPS is based on the Group’s profit/(loss) for the year adjusted for the items
excluded from operating profit in arriving at adjusted operating profit, and the tax relating
to those items (note 9).
Free cash flow and cash conversion %
Free cash flow is one of the Group’s key performance indicators (KPIs) by which our
financial performance is measured. It is primarily a liquidity measure; however, free
cash flow and cash conversion % are also important indicators of overall operational
performance as they reflect the cash generated from operations. Free cash flow is defined
as cash generated before exceptional items. Cash conversion % is defined as free cash
flow as a percentage of adjusted EBITDA (applicable only when adjusted EBITDA is
positive). A reconciliation from net cash generated from operating activities, the most
directly comparable IFRS measure to free cash flow, is set out as follows:
2024 2023
£m £m
Net cash generated from operating activities
59.2
11.1
Add back:
Taxation paid
5.1
1.8
Interest paid
10.9
11.4
Refinancing costs paid
3.8
12.3
Cash outflow in respect of exceptional items
2.7
1.4
Free cash flow
81.7
38.0
Adjusted EBITDA
87.1
34.1
Cash conversion %
94%
111%
2. Accounting policies continued
Alternative performance measures
Introduction
The performance of the Group is assessed using a variety of adjusted measures that are
not defined under IFRS and are therefore termed non-GAAP measures. The non-GAAP
measures used are adjusted operating profit, adjusted EBITDA, adjusted finance costs,
adjusted profit before tax, adjusted profit for the year, adjusted EPS, free cash flow and
cash conversion %, adjusted ROCE, liquidity and net debt. The rationale for using these
measures, along with a reconciliation from the nearest measures prepared in accordance
with IFRS, are presented below. The alternative performance measures we use may not be
directly comparable with similarly titled measures used by other companies.
Adjusted measures
Adjusted measures exclude specific items that are considered to hinder comparison
of the trading performance of the Group’s businesses either year on year or with other
businesses. This presentation is consistent with the way that financial performance
is measured by management and reported to the Board and Executive Committee,
and is used for internal performance analysis and in relation to employee incentive
arrangements. The Directors present these adjusted measures in the financial statements
in order to assist investors in their assessment of the trading performance of the Group.
Directors do not regard these measures as a substitute for, or superior to, the equivalent
measures calculated and presented in accordance with IFRS.
During the years under review, the items excluded from operating profit in arriving at
adjusted operating profit were the amortisation of intangible assets and exceptional items.
Exceptional items and amortisation are excluded from adjusted operating profit because
they are not considered to be representative of the trading performance of the Group’s
businesses during the year. Adjusted EBITDA means adjusted operating profit before
depreciation. A reconciliation between adjusted operating profit, adjusted EBITDA and
the Group’s reported statutory operating profit is shown below.
2024 2023
£m £m
Operating profit
64.3
10.3
Exceptional items in operating profit (note 4)
0.8
0.8
Amortisation of intangibles (note 13)
2.0
2.4
Adjusted operating profit
67.1
13.5
Depreciation of property, plant and equipment (note 14)
16.3
16.8
Depreciation of right-of-use assets (note 15)
3.7
3.8
Adjusted EBITDA
87.1
34.1
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
2024 2023
£m £m
Cash and cash equivalents
9.3
1.6
RCF headroom
82.9
40.0
Other committed facilities headroom
—
17.5
Uncommitted facilities
6.1
0.2
Liquidity
98.3
59.3
Net debt
Net debt consists of cash and cash equivalents, overdrafts, bank and other loans and
lease liabilities.
Net debt is a key indicator used by management to assess the Group’s indebtedness and
overall balance sheet strength.
Net debt is an alternative performance measure as it is not defined in IFRS.
A reconciliation from loans and other borrowings, lease liabilities and cash and cash
equivalents, the most directly comparable IFRS measures to net debt is set out below:
2024 2023
£m £m
Current assets
Cash and cash equivalents
9.3
1.6
Current liabilities
Borrowings (note 19)
(67.4)
(49.3)
Lease liabilities (note 15)
(3.1)
(3.5)
(70.5)
(52.8)
Non-current liabilities
Borrowings (note 19)
(65.0)
(109.8)
Lease liabilities (note 15)
(5.3)
(5.5)
(70.3)
(115.3)
Net debt
(131.5)
(166.5)
2. Accounting policies continued
Alternative performance measures continued
Adjusted return on capital employed (ROCE)
Adjusted ROCE serves as an indicator of how efficiently we generate returns from the
capital invested in the business. It is a Group KPI that allows management to evaluate
the outcome of investment decisions. Adjusted ROCE is defined as adjusted operating
profit divided by the average of opening and closing capital employed. Capital employed
is defined as the total of goodwill and other intangible assets, property, plant and
equipment, right-of-use assets, inventories, trade and other receivables less trade and
other payables. There is no equivalent statutory measure within IFRS. Adjusted ROCE is
calculated as follows:
2024 2023 2022
£m £m £m
Goodwill (note 12)
19.7
19.7
19.7
Other intangible assets (note 13)
9.8
6.5
7.3
Property, plant and equipment (note 14)
114.4
117.8
122.9
Right-of-use assets (note 15)
8.1
8.5
11.3
Inventories (note 16)
119.6
121.5
118.9
Trade and other receivables (note 17)
148.8
145.7
145.4
Trade and other payables (note 18)
(220.1)
(219.6)
(206.9)
Capital employed
200.3
200.1
218.6
Average of opening and closing capital
employed
200.2
209.4
214.0
Adjusted operating profit/(loss)
67.1
13.5
(24.5)
Adjusted ROCE %
33.5%
6.4%
(11.4)%
Liquidity
Liquidity means, at any time, without double counting, the aggregate of:
(a) cash;
(b) cash equivalents;
(c) the available facility at that time, which comprises the headroom available in the RCF
and other committed facilities; and
(d) the aggregate amount available for drawing under uncommitted facilities.
The Company uses this measure to manage cash flow and ensure that financial covenants
are adhered to.
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Financial Statements
Interest cover ratio (banking basis)
The interest cover ratio (banking basis) is a measure of the Company’s ability to pay the
interest on its outstanding debts. Under the RCF, it is calculated as EBITDA (as defined
in the RCF agreement) divided by adjusted finance costs (excluding net interest cost on
defined benefit obligation). The Company uses the ratio to ensure compliance with the
RCF financial covenants that will be tested quarterly from 30 September 2024.
2024 2023
£m £m
EBITDA banking basis (as defined in the RCF agreement)
91.8
38.2
Lease payments (note 15)
(4.5)
(4. 3)
EBITDA banking basis (as defined in the RCF agreement)
87.3
33.9
Adjusted finance costs excluding net interest cost on
defined benefit obligation (note 8)
12.8
12.7
Interest cover ratio (banking basis)
6.8x
2.7x
2. Accounting policies continued
Alternative performance measures continued
Net debt cover ratio (banking basis)
The net debt cover ratio (banking basis) is an indicator of the Company’s ability to repay
its debts. Under the RCF, it is calculated as net debt (as defined in the RCF agreement)
divided by EBITDA (as defined in the RCF agreement). The Company uses the ratio to
ensure compliance with the RCF financial covenants that will be tested quarterly from
30 September 2024.
2024 2023
£m £m
Net debt (as defined above)
(131.5)
(166.5)
Invoice discounting facilities (note 19)
55.6
48.7
B Shares (note 11, 18)
(0.7)
(0.7)
Lease liabilities (note 15)
8.4
9.0
Adjustment for average exchange rates
(0.9)
(0.7)
Net debt banking basis (as defined in the RCF agreement)
(69.1)
(110.2)
Adjusted EBITDA
87.1
34.1
Net interest cost on defined benefit obligation (note 8)
(1.2)
(0.5)
Loss on disposal of property, plant and equipment (note 14)
1.4
0.3
Lease payments (note 15)
4.5
4.3
EBITDA banking basis (asdefined in the RCF agreement)
91.8
38.2
Net debt cover ratio (banking basis)
0.8x
2.9x
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
134
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
3. Segment information
Segmental reporting
Financial information is presented to the Board by business division for the purposes of allocating resources within the Group and assessing the performance of the Group. There are
five separately managed and accountable business divisions. The European business is managed as four divisions based on product technology and the Asia-Pacific division is based on
geography:
• Liquids;
• Unit Dosing;
• Powders;
• Aerosols; and
• Asia Pacific.
Intra-group revenue from the sale of products is agreed between the relevant customer-facing units and eliminated in the segmental presentation that is presented to the Board, and
therefore excluded from the figures. Most overhead costs are directly attributed within the respective divisions’ income statements. Central overheads are allocated to a reportable
segment proportionally using an appropriate cost driver. Corporate costs, which include the costs associated with the Board and the Executive Leadership Team, governance and listed
company costs. The costs of certain Group functions (mostly associated with financial disciplines such as treasury) are reported separately. Exceptional items are detailed in note 4 and
are not allocated to the reportable segments as this reflects how they are reported to the Board. Finance expense and income are not allocated to the reportable segments, as the Group
Treasury function manages this activity, together with the overall net debt position of the Group.
The Board uses adjusted operating profit to measure the profitability of the Group’s businesses. Adjusted operating profit is, therefore, the measure of segment profit presented in
the Group’s segment disclosures. Adjusted operating profit represents operating profit before specific items that are considered to hinder comparison of the trading performance of the
Group’s businesses either year on year or with other businesses. During the years under review, the items excluded from operating profit in arriving at adjusted operating profit were the
amortisation of intangible assets and exceptional items.
Unit Asia
Liquids Dosing Powders Aerosols Pacific Corporate Group
Year ended 30 June 2024 £m £m £m £m £m £m £m
Revenue
532.8
233.6
92.8
50.9
24.7
—
934.8
Adjusted operating profit/(loss)
45.6
19.4
6.0
2.1
1.4
(7.4)
67.1
Amortisation of intangible assets
(2.0)
Exceptional items (note 4)
(0.8)
Operating profit
64.3
Finance costs (note 8)
(17. 8)
Profit before taxation
46.5
Inventories
61.2
31.3
14.1
10.3
2.7
—
119.6
Capital expenditure
10.3
7.7
2.0
0.6
0.3
—
20.9
Amortisation and depreciation
12.8
5.8
1.4
0.6
1.4
—
22.0
135
McBride plc Annual Report and Accounts 2024
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
3. Segment information continued
Segmental reporting continued
Unit Asia
Liquids Dosing Powders Aerosols Pacific Corporate Group
Year ended 30 June 2023 £m £m £m £m £m £m £m
Revenue
497.9
234.2
85.9
46.2
24.8
—
889.0
Adjusted operating profit/(loss)
10.5
10.0
(0.7)
0.3
1.1
(7.7)
13.5
Amortisation of intangible assets
(2.4)
Exceptional items (note 4)
(0.8)
Operating profit
10.3
Finance costs (note 8)
(25.4)
Loss before taxation
(15.1)
Inventories
59.4
33.8
15.8
9.6
2.9
—
121.5
Capital expenditure
5.9
4.9
1.7
0.4
0.3
—
13.2
Amortisation and depreciation
13.2
6.3
1.4
0.6
1.5
—
23.0
Geographical information
Revenue
Non-current assets
2024 2023 2024 2023
£m £m £m £m
United Kingdom
194.4
187.8
36.8
34.5
Germany
212.4
205.8
—
—
France
201.5
188.0
9.8
9.1
Italy
78.4
73.9
14.4
14.3
Spain
41.2
35.1
9.5
9.6
Other Europe
177. 5
169.5
77.6
80.2
Asia Pacific
25.4
25.7
3.9
4.8
Rest of the World
4.0
3.2
—
—
Total
934.8
889.0
152.0
152.5
The geographical revenue information above is based on the location of the customer.
Non-current assets for this purpose consists of goodwill, other intangible assets, property, plant and equipment and right-of-use assets.
Revenue by major customer
In 2024 and 2023, no individual customer provided more than 10% of the Group’s revenue. During 2024, the top ten customers accounted for 52% of total Group revenue (2023: 53%).
136
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Aggregate payroll costs were as follows:
2024 2023
£m £m
Wages and salaries
131.1
118.9
Social security costs
20.9
19.0
Share awards granted to Directors and employees
1.6
0.5
Other pension costs
3.6
3.6
Total
157. 2
142.0
Pension costs comprise the payments made by the Group to defined contribution
schemes and the service and administration costs on defined benefit schemes (net of
employee contributions). See note 22.
Aggregate emoluments of the Directors of the Company were as follows:
2024 2023
£’000 £’000
Wages and salaries
1,787
1,889
Share awards granted to Directors
778
169
Other pension costs
(1)
—
58
Total
2,565
2,116
(1) The pension figure represents the value of the Company’s contribution to the individual’s pension scheme
and/or the cash value of payments in lieu of pension contribution.
Further information on Directors’ emoluments included above is in the Annual Report on
Remuneration on pages 91 to 102.
Aggregate compensation for key management, being the Directors and members of the
Executive Committee, is shown in note 27.
4. Exceptional items
Analysis of exceptional items
2024 2023
£m £m
Environmental remediation
0.8
0.8
Total charged to operating profit
0.8
0.8
Group refinancing:
Independent business review and refinancing costs
3.8
12.2
Total charged to finance costs
3.8
12.2
Total exceptional items before tax
4.6
13.0
Total exceptional items of £4.6 million were recorded during the year (2023: £13.0m).
The charge comprised the following:
• £0.8 million costs relating to the re-evaluation of the environmental remediation
provision (2023: £0.8m); and
• £3.8 million charged to finance costs (2023: £12.2m). The charge primarily related
to the termination of the upside sharing fee. As announced on 25 October 2023, the
Group agreed to make a one-off payment of £5.0 million to its lender group in respect
of the upside sharing fee. As £1.5 million had already been recognised at 30 June 2023,
a further £3.5 million cost was recognised in the year. Costs of £12.2 million incurred in
the prior year related to the independent business review and amended RCF.
5. Employee information
The number of full-time equivalent persons employed by the Group (including Directors)
during the year, analysed by category, was as follows:
2024 2024 2023 2023
Year end Average Year end Average
Number Number Number Number
Manufacturing
2,571
2,439
2,333
2,287
Sales, general and
administration
636
623
608
596
Total
3,207
3,062
2,941
2,883
The number of persons employed during the financial year ended 30 June 2024 excludes
third-party contractors, agency workers and consultants used by the Group. Such workers
are not employees of the Group, as defined by section 411 of the Companies Act 2006,
and have therefore been excluded from the numbers disclosed above.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
8. Finance costs
2024 2023
£m £m
Finance costs
Interest on bank loans and overdrafts
10.5
11.1
Interest on lease liabilities (note 15)
0.3
0.3
Net foreign exchange loss
0.7
(0.2)
Amortisation of facility fees
0.5
0.5
Non-utilisation and other fees
0.8
1.0
12.8
12.7
Post-employment benefits:
Net interest cost on defined benefit obligation (note 22)
1.2
0.5
Adjusted finance costs
14.0
13.2
Costs associated with independent business review and
refinancing (note 4)
3.8
12.2
Total finance costs
17.8
25.4
Interest rate caps are used to manage the interest rate profile of the Group’s
borrowings. Accordingly, interest income from interest rate caps of £1.6 million (2023:
£0.5m) is included in interest on bank loans and overdrafts.
No interest costs were capitalised in the current year (2023: £nil).
6. Auditors’ remuneration
Fees payable by the Group to the Company’s independent auditors,
PricewaterhouseCoopers LLP, and its associates, were as follows:
2024 2023
£m £m
Audit fees:
Audit of the Company’s financial statements
0.1
0.1
Other services:
Audit of the financial statements of the Company’s
subsidiaries
1.1
1.2
Total fees
1.2
1.3
Fees for the audit of the Company’s financial statements represent fees payable to PwC
in respect of the audit of the Company’s individual financial statements and the Group’s
consolidated financial statements. Non-audit fees payable to PwC in relation to other
non-audit assurance services amounted to £2,000 (2023: £2,000).
7. Operating profit
Operating profit is stated after charging:
2024 2023
£m £m
Cost of inventories (included in cost of sales)
(1)
519.9
573.2
Employee costs (note 5)
157. 2
142.0
Amortisation of intangible assets (note 13)
2.0
2.4
Depreciation of property, plant and equipment (note 14)
16.3
16.8
Depreciation of right-of-use assets (note 15)
3.7
3.8
Impairment:
Property, plant and equipment (note 14)
0.2
—
Inventories (note 16)
8.9
3.0
Trade receivables (note 17)
1.6
2.6
Expense relating to short-term leases (note 15)
0.2
0.3
Expense relating to low-value leases (note 15)
0.1
0.1
Research and development costs not capitalised
10.0
7.3
Net foreign exchange loss
0.5
0.4
(1) Direct material costs only.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
9. Taxation
Income tax expense/(credit)
2024
2023
UK Overseas Total UK Overseas Total
Total attributable to ordinary shareholders £m £m £m £m £m £m
Current tax expense/(credit)
Current year
0.4
12.0
12.4
—
5.0
5.0
Adjustment for prior years
—
(0.8)
(0.8)
—
(0.2)
(0.2)
0.4
11.2
11.6
—
4.8
4.8
Deferred tax expense/(credit)
Origination and reversal of temporary differences
1.0
(0.3)
0.7
(8.8)
0.9
(7.9)
Adjustment for prior years
0.7
0.2
0.9
(0.2)
(0.3)
(0.5)
1.7
(0.1)
1.6
(9.0)
0.6
(8.4)
Income tax expense/(credit)
2.1
11.1
13.2
(9.0)
5.4
(3.6)
The current tax adjustment for the prior year was £0.5 million charge (2023: £nil) and £0.2 million credit (2023: £0.2m credit) relating to the release of provisions for uncertain tax
treatments due to the expiry of statutes of limitation.
Transfer pricing is inherently subjective and in determining the appropriate level of provision, the Group considers the probability of a range of outcomes, using a weighted average
methodology to focus risk on the most likely outcomes in the event of an audit. The amount provided also takes account of international dispute resolution mechanisms, where available,
to mitigate double taxation. This analysis is re-assessed at each year end and the estimates refined as additional information becomes available.
At 30 June 2024, the Group estimated its maximum possible tax exposure for ongoing tax audits and uncertain tax treatments to be £23.2 million (2023: £15.9m), against which a
provision of £1.4 million (2023: £1.6m) has been made, in line with IFRIC 23 requirements.
139
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Factors affecting future tax charges
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK,
introducing a global minimum effective tax rate of 15%. The legislation implements a
domestic top-up tax and a multinational top-up tax, effective for accounting periods
starting on or after 31 December 2023. On this basis, the first period of account where the
Group will be affected will be the accounting period ending 2025 onwards. The Group is
reviewing these draft rules to understand any potential impacts.
The Group has applied the exception under the proposed IAS 12 amendment to
recognising and disclosing information about deferred tax assets and liabilities related
to top-up income taxes.
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in
which the Group operates. The legislation will be effective for the Group’s financial year
beginning 1 July 2024. The Group is in scope of the enacted or substantively enacted
legislation and has performed an assessment of the Group’s potential exposure to Pillar
Two income taxes based on modelling of adjusted accounting data for the period ended
30 June 2023 and has been performed with the assistance from the Group’s tax advisers.
A further assessment will be performed on accounting data for the period ended
30 June 2024.
Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions
in which the Group operates are above 15% or one of the other transitional safe harbour
reliefs are available. Management is not currently aware of any circumstances under which
this might change and therefore the Group does not anticipate a material exposure to
Pillar Two top-up taxes.
Tax on items recognised in other comprehensive income
2024 2023
£m £m
Items that may be reclassified to profit or loss:
Cash flow hedges in the year
0.6
0.4
Items that will not be reclassified to profit or loss:
Net actuarial loss on post-employment benefits:
Deferred tax
(1.3)
(3.5)
Total tax credited in other comprehensive income
(0.7)
(3.1)
9. Taxation continued
Reconciliation to UK statutory tax rate
The total tax charge/(credit) on the Group’s profit/(loss) before tax for the year is
higher (2023: higher) than the amount that would be charged at the UK standard rate of
corporation tax for the following reasons:
2024 2023
Total attributable to ordinary shareholders £m £m
Profit/(loss) before tax
46.5
(15.1)
Profit/(loss) before tax multiplied by the UK corporation
tax rate of 25.0% (2023: 20.5%)
11.6
(3.1)
Effect of tax rates in foreign jurisdictions
0.3
1.1
Non-deductible expenses
0.5
0.4
Change in tax rate
—
(1.6)
Other differences
0.7
0.3
Adjustment for prior years
0.1
(0.7)
Total tax charge/(credit) in profit or loss
13.2
(3.6)
Exclude adjusting items (note 2)
1.6
3.9
Total tax charge in profit or loss before adjusting items
14.8
0.3
The taxation is provided at current rates on the profits earned for the year. There have been
no changes in applicable tax rates that have impacted the current year tax charge.
The main rate of UK corporation tax applicable for the financial year is 25.0% (2023: 20.5%,
being the weighted average of 19.0% for nine months and 25.0% for three months).
140
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
9. Taxation continued
Deferred tax
The movement in the net deferred tax balances during the year was:
Accelerated Share- Retirement
capital Intangible based Tax benefit
allowance assets payments losses obligations Other Total
£m £m £m £m £m £m £m
At 1 July 2022
(4.6)
(3.2)
0.1
22.0
3.9
6.8
25.0
(Charge)/credit to profit or loss
(0.7)
0.4
0.1
7.2
(0.9)
2.3
8.4
Credit/(charge) to other comprehensive income
—
—
—
—
3.5
(0.4)
3.1
Exchange/other movements
0.1
(0.2)
—
0.1
—
—
—
At 30 June 2023
(5.2)
(3.0)
0.2
29.3
6.5
8.7
36.5
(Charge)/credit to profit or loss
(1.3)
0.1
0.3
(3.5)
(0.5)
3.3
(1.6)
Credit/(charge) to other comprehensive income
—
—
—
—
1.3
(0.5)
0.8
Credit to equity
—
—
1.1
—
—
—
1.1
At 30 June 2024
(6.5)
(2.9)
1.6
25.8
7.3
11.5
36.8
Other deferred tax includes short-term timing differences for Group entities of £4.6 million (2023: £5.2m) and amounts related to corporate interest restriction in the UK £8.2 million
(2023: £4.2m).
Deferred tax assets and liabilities are presented in the Group’s balance sheet as follows:
2024 2023
£m £m
Deferred tax assets
42.8
41.6
Deferred tax liabilities
(6.0)
(5.1)
Total
36.8
36.5
Deferred income tax assets are recognised for deductible temporary differences to the extent that the realisation of the related tax benefit through future taxable profits is probable.
The deferred tax asset represents mainly UK deductible temporary differences which are not subject to time expiry. The Group expects to utilise an element of these temporary
differences in its 2024 tax return with all amounts considered to be fully recoverable based on the latest medium-term financial forecasts. Applying a downside sensitivity test in line
with the Group’s impairment model, it was determined that the EBITDA in the next three financial years would have to reduce by 13.9% to result in an impairment of the deferred tax
asset. The reason for the expected improvement in performance is due to the increased sales volumes which have been driven by new business wins and the expansion of private label
contracts. There is no significant risk of material adjustment to the carrying amount of the deferred tax asset within the next twelve months.
To the extent that dividends remitted from overseas affiliates are expected to result in additional taxes, these amounts have been provided for. No deferred tax is recognised in respect
of timing differences associated with the unremitted earnings of overseas subsidiaries as these are considered permanently employed in the business of these companies. Unremitted
earnings may be liable to overseas taxes and/or UK taxation (after allowing for double tax relief) if distributed as dividends. The aggregate amount of temporary differences associated
with investments in subsidiaries and associates for which deferred tax liabilities have not been recognised totalled approximately £0.8 million at 30 June 2024 (2023: £0.7m).
141
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Diluted earnings/(loss) per share is calculated by adjusting the weighted average number
of ordinary shares in issue assuming the conversion of all potentially dilutive ordinary
shares. Where potentially dilutive ordinary shares would cause an increase in earnings per
share, or a decrease in loss per share, the diluted loss per share is considered equal to the
basic loss per share.
During the year, the Company had equity-settled awards with a nil exercise price that are
potentially dilutive ordinary shares.
Adjusted earnings per share measures are calculated based on profit/(loss) for the year
attributable to owners of the Company before adjusting items as follows:
2024 2023
Reference £m £m
Profit/(loss) for calculating basic and
diluted earnings/(loss) per share
c
33.3
(11.5)
Adjusted for:
Amortisation of intangible assets (note 13)
2.0
2.4
Exceptional items (note 4)
4.6
13.0
Taxation relating to the items above
Profit for calculating adjusted earnings
(1.6)
(3.9)
per share
d
38.3
—
2024 2023
Reference pence pence
Basic earnings/(loss) per share
c/a
19.3
(6.6)
Diluted earnings/(loss) per share
c/b
(1)
18.8
(6.6)
Adjusted basic earnings per share
d/a
22.2
0.0
Adjusted diluted earnings per share
d/b
(1)
21.7
0.0
(1) Diluted loss per share is considered equal to the basic loss per share as potentially dilutive ordinary shares
cause a decrease in the loss per share.
9. Taxation continued
Unrecognised deferred tax assets
At 30 June 2024, the Group had unused tax losses of £105.0 million (2023: £118.4m)
available to offset against future profits. No deferred tax asset has been recognised in
respect of £2.0 million (2023: £2.0m) of these losses due to restrictions over accessing
these losses in the future. The majority of these tax losses arise in tax jurisdictions where
they do not expire.
As at 30 June 2024, McBride plc had unused tax losses of £26.3 million (2023: £30.5m)
available to offset against future profits. No deferred tax asset has been recognised in
respect of £2.0 million (2023: £2.0m) of these losses due to restrictions over accessing
these losses in the future.
No deferred tax asset has been recognised in relation to the surplus Advanced
Corporation Tax (ACT) of £7.0 million (2023: £7.0m) due to uncertainty as to future ACT
capacity and taxable profits.
10. Earnings/(loss) per ordinary share
Basic earnings/(loss) per ordinary share is calculated by dividing the profit/(loss) for
the year attributable to owners of the Company by the weighted average number of
the Company’s ordinary shares in issue during the financial year. The weighted average
number of the Company’s ordinary shares in issue excludes 1,372,779 shares (2023:
623,968 shares), being the weighted average number of own shares held during the year
in relation to employee share schemes (note 23).
Reference
2024
2023
Weighted average number of ordinary
shares in issue (million)
a
172.7
173.4
Effect of dilutive share options (million)
4.2
2.5
Weighted average number of ordinary
shares for calculating diluted earnings/(loss)
per share (million)
b
176.9
175.9
142
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
12. Goodwill
£m
Cost
At 1 July 2022 and 30 June 2023
36.0
Currency translation differences
(0.3)
At 30 June 2024
35.7
Accumulated impairment
At 1 July 2022 and 30 June 2023
(16.3)
Currency translation differences
0.3
At 30 June 2024
(16.0)
Net book value
At 30 June 2024
19.7
At 30 June 2023
19.7
The Liquids, Unit Dosing, Powders, Aerosols and Asia Pacific businesses have separate
management teams and leadership and represent the lowest level within the Group at
which goodwill is monitored for internal management purposes.
Carrying amount of goodwill allocated to CGUs:
2024 2023
£m £m
Liquids
16.0
16.0
Unit Dosing
3.2
3.2
Powders
0.3
0.3
Asia Pacific
0.2
0.2
At 30 June
19.7
19.7
11. Payments to shareholders
Dividends paid and received are included in the Company financial statements in the
year in which the related dividends are actually paid or received or, in respect of the
Company’s final dividend for the year, approved by shareholders.
Under the terms of the amended RCF announced on 29 September 2022, the Company
may not, except with the consent of its lender group, declare, make or pay any dividend
or distribution to its shareholders prior to an ‘exit event’, being a change of control,
refinancing of the RCF in full, prepayment and cancellation of the RCF in full, or upon the
termination date of the RCF, being May 2026. Hence, the Board is not recommending a
final dividend for the financial year ended 30 June 2024.
No payments to ordinary shareholders were made or proposed in respect of this year or
the prior year.
Furthermore, under the RCF, the Company may not, except with the consent of its lender
group, redeem or repay any of its share capital prior to an exit event. Therefore, the
redemption of B Shares that would normally take place in November each year will not
take place. B Shares issued but not redeemed are classified as current liabilities.
Movements in the number of B Shares outstanding were as follows:
Nominal
Number value
000 £’000
Issued and fully paid
At 1 July 2022, 30 June 2023 and 30 June 2024
665,888
666
B Shares carry no rights to attend, speak or vote at Company meetings, except on a
resolution relating to the winding up of the Company.
143
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
12. Goodwill continued
Impairment tests carried out during the year
Goodwill is tested for impairment annually at the level of the CGU to which it is allocated.
In each of the tests carried out during the current financial year, the recoverable amount
of the CGUs concerned was measured on a value-in-use basis.
Value-in-use represents the present value of the future cash flows that are expected to be
generated by the CGU to which the goodwill is allocated. Management based its cash flow
estimates on the Group’s Board-approved budget for 2025. Cash flows in the following
two years were forecasted by applying assumptions to budgeted sales, production costs
and overheads. Aggregate cash flows beyond the third year were estimated by applying
a perpetuity growth rate to the forecast cash flow in the third year that was based on
long-term growth rates for the CGU’s products in its end markets.
Management estimates sales growth for each CGU based on forecasts of the future
volume of the end markets for the CGU’s products.
The cost of material inputs and other direct and indirect costs is estimated based on
current prices and market expectations of future price changes. Beyond the budget year,
unless there are reasons to suggest otherwise, management assumes that future changes
in material input prices are reflected in the price of the Group’s products. General cost
inflation is based on management’s expectations of cost increases in the business.
Liquids is the sole CGU to which significant goodwill is allocated.
In order to forecast growth beyond the detailed cash flows into perpetuity for the Liquids
CGU, a long-term average growth rate of 1.6% (2023: 1.6%) has been applied. The rate
is based on a weighted average of country-specific rates that are not greater than the
published International Monetary Fund average growth rates in gross domestic product
in the territories in which the Liquids CGU operates.
The discount rate applied to the cash flow projections of the Liquids CGU were
determined using a capital asset pricing model and reflected current market interest
rates, relevant equity and size risk premiums and the risks specific to the Liquids CGU.
The pre-tax discount rate used in calculating the value-in-use of the Liquids CGU in the
current year was 12.8% (2023: 14.2%).
Sensitivity analysis
A sensitivity analysis has been performed, focusing on the change required in long-term
average growth rates, discount rates and forecast revenue and margin assumptions that
would give rise to an impairment.
In the case of the Liquids CGU, sensitivities that result in the recoverable amount equalling
the carrying value were:
• a decrease in long-term average growth rates to a negative growth rate of (29.7)%;
• an increase in pre-tax discount rates of 23.6ppts;
• a reduction in forecast revenue of 16.4%; and
• a reduction in forecast margins of 4.5ppts.
None of the above scenarios are considered reasonably possible.
Based on the impairment reviews performed, no impairment has been identified.
144
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
13. Other intangible assets
Patents,
brands and Computer Customer
trademarks software relationships Other Total
£m £m £m £m £m
Cost
At 1 July 2022
3.7
12.2
11.9
1.4
29.2
Additions
—
1.7
—
—
1.7
Disposals
—
—
—
(0.1)
(0.1)
Transfers
—
0.4
—
(0.4)
—
At 30 June 2023
3.7
14.3
11.9
0.9
30.8
Additions
—
—
—
5.3
5.3
Disposals
—
—
—
(0.2)
(0.2)
Transfers
—
0.9
—
(0.9)
—
At 30 June 2024
3.7
15.2
11.9
5.1
35.9
Accumulated amortisation and impairment
At 1 July 2022
(3.7)
(6.9)
(10.8)
(0.5)
(21.9)
Charge for the year
—
(1.8)
(0.5)
(0.1)
(2.4)
At 30 June 2023
(3.7)
(8.7)
(11.3)
(0.6)
(24.3)
Disposals
—
—
—
0.2
0.2
Charge for the year
—
(1.5)
(0.4)
(0.1)
(2.0)
At 30 June 2024
(3.7)
(10.2)
(11.7)
(0.5)
(26.1)
Net book value
At 30 June 2024
—
5.0
0.2
4.6
9.8
At 30 June 2023
—
5.6
0.6
0.3
6.5
145
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
14. Property, plant and equipment
Assets in
Land and Plant and the course of
buildings equipment construction Total
£m £m £m £m
Cost
At 1 July 2022
67.3
267.3
6.0
340.6
Additions
0.4
6.9
4.2
11.5
Disposals
(0.9)
(10.3)
—
(11.2)
Transfers
0.3
—
(0.3)
—
Currency translation differences
0.4
0.5
0.1
1.0
At 30 June 2023
67.5
264.4
10.0
341.9
Additions
1.3
11.2
3.1
15.6
Disposals
(0.5)
(4.6)
—
(5.1)
Transfers
0.2
2.3
(2.5)
—
Currency translation differences
(0.9)
(3.0)
(0.1)
(4.0)
At 30 June 2024
67.6
270.3
10.5
348.4
Accumulated depreciation and impairment
At 1 July 2022
(30.4)
( 187.3)
—
(217.7)
Charge for the year
(2.0)
(14.8)
—
(16.8)
Disposals
0.6
10.4
—
11.0
Currency translation differences
—
(0.6)
—
(0.6)
At 30 June 2023
(31.8)
(192.3)
—
(224.1)
Charge for the year
(1.9)
(14.4)
—
(16.3)
Disposals
0.1
3.6
—
3.7
Impairment
—
(0.2)
—
(0.2)
Currency translation differences
0.6
2.3
—
2.9
At 30 June 2024
(33.0)
(201.0)
—
(234.0)
Net book value
At 30 June 2024
34.6
69.3
10.5
114.4
At 30 June 2023
35.7
72.1
10.0
117. 8
146
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
15. Leases
Most of the Group’s leases are associated with leased properties. The Group also leases a small proportion of its plant and machinery, for example, forklift trucks and vehicles.
The movements in the right-of-use assets were as follows:
Land and Plant and
buildings machinery Vehicles Other Total
£m £m £m £m £m
Right-of-use assets
Net book value at 1 July 2022
2.9
5.9
1.6
0.9
11.3
New leases recognised
0.2
0.2
0.8
—
1.2
Currency translation differences
(0.2)
—
—
—
(0.2)
Depreciation
(1.1)
(1.4)
(1.0)
(0.3)
(3.8)
Net book value at 30 June 2023
1.8
4.7
1.4
0.6
8.5
New leases recognised
1.3
1.2
0.9
—
3.4
Currency translation differences
—
—
—
(0.1)
(0.1)
Depreciation
(0.9)
(2.0)
(0.8)
—
(3.7)
Net book value at 30 June 2024
2.2
3.9
1.5
0.5
8.1
The movements in the lease liabilities were as follows:
Total
£m
Lease liabilities
At 1 July 2022
12.0
New leases recognised
1.2
Lease payments
(4.3)
Currency translation differences
(0.2)
Finance costs (note 8)
0.3
At 30 June 2023
9.0
New leases recognised
3.4
Lease payments
(4.5)
Currency translation differences
0.2
Finance costs (note 8)
0.3
At 30 June 2024
8.4
147
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Inventories are stated net of an allowance of £10.3 million (2023: £5.5m) in respect of
excess, obsolete or slow-moving items. Movements in the allowance were as follows:
2024 2023
£m £m
At 1 July
(5.5)
(5.6)
Utilisation
4.0
3.1
Charged to profit or loss
(8.9)
(3.0)
Currency translation differences
0.1
—
At 30 June
(10.3)
(5.5)
The cost of inventories recognised in cost of sales as an expense amounted to £583.4
million (2023: £623.6m). The cost of inventories including direct material costs only
(note 7) is £519.9 million (2023: £573.2m).
17. Trade and other receivables
2024 2023
£m £m
Trade receivables
137.7
132.1
Less: provision for impairment of trade receivables
(3.6)
(4. 3)
Trade receivables – net
134.1
127.8
Other receivables
9.8
11.9
Prepayments and accrued income
4.9
6.0
Total
148.8
145.7
Trade receivables amounting to £55.6 million (2023: £49.0m) are secured under the
invoice discounting facilities described in note 20.
Other receivables primarily consist of supplier rebates and recoverable VAT.
Trade terms are a maximum of 135 days of credit.
Due to their short-term nature, the fair value of trade and other receivables does not differ
from the book value.
The impairment of trade receivables charged to the income statement was £1.6 million
(2023: £3.5m). There are no impairments of any receivables other than trade receivables.
15. Leases continued
2024 2023
£m £m
Analysed as:
Amounts falling due within twelve months
3.1
3.5
Amounts falling due after one year
5.3
5.5
8.4
9.0
Note 20 presents a maturity analysis of the payments due over the remaining lease term
for those liabilities currently recognised on the balance sheet. This analysis only includes
payments to be made over the reasonably certain lease term. Cash outflows may exceed
these amounts as payments may be made in optional periods that are not currently
considered to be reasonably certain and, in respect of leases, entered into in future periods.
For the year ended 30 June 2024, expenses for short-term and low-value leases were
incurred as follows:
2024 2023
£m £m
Expenses relating to short-term leases
0.2
0.3
Expenses relating to leases of low-value assets not shown
as short-term leases above
0.1
0.1
Total
0.3
0.4
At 30 June 2024, the Group was committed to future minimum lease payments of
£0.3 million (2023: £2.1m) in respect of leases which have not yet commenced and for
which no lease liability has been recognised.
16. Inventories
2024 2023
£m £m
Raw materials, packaging and consumables
58.0
62.7
Finished goods and goods for resale
61.6
58.8
Total
119.6
121.5
148
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
17. Trade and other receivables continued
Trade receivables are regularly reviewed for bad and doubtful debts. Bad debts are written off and an allowance is established based on the expected credit loss model. The expected loss
rates are based on payment profiles of sales over a period of three years before 30 June 2024 or 30 June 2023, respectively, and the corresponding historical credit losses experienced
within this period adjusted for forward-looking factors specific to the debtors and the economic environment.
On that basis, the credit loss allowance as at 30 June 2024 and 30 June 2023 was determined as follows:
More than More than More than More than
30 days 60 days 90 days 180 days
30 June 2024
Current
past due past due past due
past due
Total
Expected loss rate
0.5%
0.0%
0.0%
0.0%
14.2%
Gross carrying amount (£m)
130.5
2.2
0.6
1.4
3.0
137.7
Credit loss allowance (£m)
0.7
—
—
—
0.4
1.1
More than More than More than More than
30 days 60 days 90 days 180 days
30 June 2023
Current
past due past due past due
past due
Total
Expected loss rate
0.5%
0.4%
0.2%
0.6%
4.5%
Gross carrying amount (£m)
123.1
1.4
0.3
1.6
5.7
132.1
Credit loss allowance (£m)
0.7
—
—
—
0.3
1.0
In addition to the credit loss allowance, the provision for impairment of trade receivables includes £2.5 million (2023: £3.3m) of credit note provisions.
Movements in the allowance for doubtful debts were as follows:
2024 2023
£m £m
At 1 July
(4.3)
(2.2)
Utilisation
2.3
0.5
Charged
(1.6)
(2.6)
At 30 June
(3.6)
(4.3)
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure
of a debtor to engage in a repayment plan with the Group, or a failure to make contractual payments for a period greater than 365 days past due. Impairment losses on trade receivables
are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
149
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
17. Trade and other receivables continued
The carrying amounts of trade receivables are denominated in the following currencies:
2024 2023
£m £m
Sterling
17.9
18.6
Euro
99.2
94.9
Polish Zloty
1.8
2.6
Danish Krone
13.6
11.5
Malaysian Ringgit
3.1
2.7
Other
2.1
1.8
137.7
132.1
Trade receivables are generally not interest bearing.
18. Trade and other payables
2024 2023
£m £m
Current liabilities
Trade payables
160.7
162.7
Taxation and social security
4.6
4.1
Other payables
27. 3
24.0
Accrued expenses
24.5
26.5
Deferred income
2.3
1.6
B Shares (note 11)
0.7
0.7
Total
220.1
219.6
Trade payables are generally not interest bearing. The Directors consider the carrying amount of trade and other payables to approximate their fair values.
150
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
19. Borrowings
Borrowings may be analysed as follows:
2024
2023
Current Non-current Total Current Non-current Total
liabilities liabilities liabilities liabilities liabilities liabilities
£m £m £m £m £m £m
Bank and other loans:
Secured loans
—
65.0
65.0
—
109.8
109.8
—
65.0
65.0
—
109.8
109.8
Total secured borrowings
—
65.0
65.0
—
109.8
109.8
Overdrafts
11.8
—
11.8
0.6
—
0.6
Bank and other loans:
Invoice discounting facilities (note 20)
55.6
—
55.6
48.7
—
48.7
55.6
—
55.6
48.7
—
48.7
Lease liabilities
3.1
5.3
8.4
3.5
5.5
9.0
Total unsecured borrowings
70.5
5.3
75.8
52.8
5.5
58.3
Total borrowings
70.5
70.3
140.8
52.8
115.3
168.1
Bank and other loans are repayable as follows:
2024 2023
£m £m
Within one year
55.6
48.7
Between one and two years
65.0
—
Between two and five years
—
109.8
Total
120.6
158.5
Details of the Group’s bank facilities are presented in note 20. Amounts payable under leases are presented in notes 15 and 20.
151
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Financial assets and financial liabilities
Fair value
through Total
Amortised profit carrying Fair
cost
or loss
(1)
amount value
£m £m £m £m
At 30 June 2024
Financial assets
Trade receivables
134.1
—
134.1
134.1
Other receivables
9.8
—
9.8
9.8
Cash and cash equivalents
9.3
—
9.3
9.3
153.2
—
153.2
153.2
Financial assets held
at fair value
Derivative financial
instruments (Level 2)
Interest rate caps
—
2.0
2.0
2.0
Total financial assets
153.2
2.0
155.2
155.2
Financial liabilities
Trade and other payables
(201.0)
—
(201.0)
(201.0)
Bank overdrafts
(11.8)
—
(11.8)
(11.8)
Lease liabilities
(8.4)
—
(8.4)
(8.4)
Bank and other loans
(120.6)
—
(120.6)
(120.6)
(341.8)
—
(341.8)
(341.8)
Financial liabilities held
at fair value
Derivative financial
instruments (Level 2)
Forward currency contracts
—
(0.4)
(0.4)
(0.4)
Total financial liabilities
(341.8)
(0.4)
(342.2)
(342.2)
Total
(188.6)
1.6
(1 87.0)
(187.0)
(1) Financial assets and financial liabilities classified as fair value through profit or loss are designated in hedge
relationships as described within the interest risk and foreign exchange risk sections of this note.
19. Borrowings continued
The carrying amounts of assets pledged as security for current and non-current
borrowings are:
2024 2023
£m £m
Current
Floating charge
Cash and cash equivalents
0.4
(20.0)
Receivables
228.0
216.1
Total current assets pledged as security
228.4
196.1
Non-current
First mortgage
Freehold land and buildings
113.0
116.1
Shares pledged
89.9
90.8
Total non-current assets pledged as security
202.9
206.9
Total assets pledged as security
431.3
403.0
20. Financial risk management
Risk management policies
The Group Treasury function is responsible for procuring the Group’s capital resources
and maintaining an efficient capital structure, together with managing the Group’s
liquidity, foreign exchange and interest rate exposures.
All treasury operations are conducted within strict policies and guidelines that are
approved by the Board. Compliance with those policies and guidelines is monitored by the
regular reporting of treasury activities to the Board following regular Treasury Committee
meetings.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
In the tables above, the financial assets and financial liabilities held by the Group are
categorised according to the basis on which they are measured. Financial assets and
liabilities that are held at fair value are further categorised according to the degree to
which the principal inputs used in determining their fair value represent observable
market data as follows:
• Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 – inputs other than Level 1 that are observable for the asset or liability, either
directly (prices) or indirectly (derived from prices); and
• Level 3 – inputs that are not based on observable market data (unobservable inputs).
Derivative financial instruments comprise the foreign currency derivatives and interest
rate derivatives that are held by the Group in designated hedging relationships.
Foreign currency forward contracts are measured by reference to prevailing forward
exchange rates. Foreign currency options are measured using a variant of the Monte Carlo
valuation model. Interest rate caps are measured by discounting the related cash flows
using yield curves derived from prevailing market interest rates.
In the prior year, an upside sharing fee was identified as an embedded derivative.
The amended RCF that the Group agreed with its lender group on 29 September 2022
included an upside sharing mechanism whereby a fee would become payable by the
Group to members of the lender group upon the occurrence of an ‘exit event’. Such a
fee was to be determined as the percentage of any increase in the market capitalisation
of the Group from 29 September 2022 to the date of the exit event. At 30 June 2023,
the liability was valued at £1.5 million using a conventional Black-Scholes pricing model.
As announced on 25 October 2023, the Group agreed to make a one-off payment
of £5.0 million to its lender group in respect of the upside sharing fee, therefore the
derivative was not recognised in the current financial year.
Cash and cash equivalents and bank and other loans largely attract floating interest rates.
Accordingly, management considers that their carrying amount approximates to fair value.
Lease obligations attract fixed interest rates that are implicit in the lease rentals and their
fair value has been assessed relative to prevailing market interest rates.
There were no transfers between levels during the year and no changes in valuation
techniques.
20. Financial risk management continued
Financial assets and financial liabilities continued
Fair value
through Total
Amortised profit carrying Fair
cost
or loss
(1)
amount value
£m £m £m £m
At 30 June 2023
Financial assets
Trade receivables
127.8
—
127. 8
127. 8
Other receivables
11.9
—
11.9
11.9
Cash and cash equivalents
1.6
—
1.6
1.6
141.3
—
141.3
141.3
Financial assets held
at fair value
Derivative financial
instruments (Level 2)
Forward currency contracts
—
0.2
0.2
0.2
Interest rate caps
—
4.9
4.9
4.9
—
5.1
5.1
5.1
Total financial assets
141.3
5.1
146.4
146.4
Financial liabilities
Trade and other payables
(203.6)
—
(203.6)
(203.6 )
Bank overdrafts
(0.6)
—
(0.6)
(0.6 )
Lease liabilities
(9.0)
—
(9.0)
(9.0 )
Bank and other loans
(158.5)
—
(158.5)
(158.5 )
(371.7)
—
(371.7)
(371.7 )
Financial liabilities held
at fair value
Derivative financial
instruments (Level 2)
Interest rate caps
—
(0.3)
(0.3)
(0.3 )
Upside sharing fee
—
(1.5)
(1.5)
(1.5 )
—
(1.8)
(1.8)
(1.8 )
Total financial liabilities
(371.7)
(1.8)
(373.5)
(373.5 )
Total
(230.4)
3.3
(227.1)
(227.1 )
(1) Financial assets and financial liabilities classified as fair value through profit or loss are designated in hedg e
relationships as described within the interest risk and foreign exchange risk sections of this note.
153
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations
associated with its financial liabilities.
The Group’s borrowing facilities are monitored against forecast requirements and timely
action is taken to put in place, renew or replace credit lines.
Throughout the year the Group had a €175 million multi-currency, sustainability-linked
RCF. The facility was agreed for a five-year tenor to May 2026, and is provided by a
syndicate of supportive international bank lenders. Key provisions of the agreement are:
• €175 million sustainability-linked RCF confirmed to May 2026;
• the option to extend to 30 September 2027 and the €75 million accordion feature
previously agreed have been removed;
• RCF shall be secured against material asset, share and inter-company balances;
• RCF commitments to reduce, and be cancelled, in the amount of the Euro equivalent
of £2.5 million every three months from September 2024 up until the termination date;
• existing bilateral overdraft facilities shall become ancillary facilities committed until
30 September 2024;
• invoice discounting facilities shall be committed to 30 September 2024;
• liquidity shall not be less than £15 million when tested on or prior to
30 September 2024;
• liquidity shall not be less than £25 million when tested post-30 September 2024;
• net debt cover and interest cover covenants to be tested quarterly from
30 September 2024; and
• no dividends will be paid to shareholders until there is an exit event, being a change
of control, refinancing of the RCF in full, prepayment and cancellation of the RCF in
full or upon the termination date of the RCF, being May 2026.
At 30 June 2024, liquidity
(1)
, as defined by the RCF agreement, was £98.3 million due
to repayment of RCF debt, extension of invoice discounting facilities and improved
profitability (2023: £59.3m). Liquidity throughout the year was comfortably above the
minimum liquidity covenant of £15 million.
At 30 June 2024, the net debt cover
(1)
ratio under the RCF funding arrangements was
0.8x (2023: 2.9x) and the interest cover
(1)
was 6.8x (2023: 2.7x). The amount undrawn
on the facility was €97.9 million (2023: €46.7m).
At 30 June 2024, the Group had a number of facilities whereby it could borrow against
certain of its trade receivables. In the UK, the Group had a £20 million facility, committed
until May 2026. In Spain, France and Belgium, the Group had an unlimited facility
committed until May 2026. In Germany and Denmark, the Group had a €45 million facility,
committed until May 2026. The Group can borrow from the provider of the relevant
facility up to the lower of the facility limit and the value of the respective receivables.
20. Financial risk management continued
Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Group.
The Group has three types of financial assets that are subject to the expected credit
loss model:
• trade receivables;
• other receivables; and
• cash and cash equivalents.
Information regarding expected credit losses on trade receivables is disclosed in note 17.
While other receivables and cash and cash equivalents are also subject to the impairment
requirements of IFRS 9, the identified impairment loss was minimal. The Group’s cash
balances are managed such that there is no significant concentration of credit risk in any
one bank or other financial institution. Management regularly monitors the credit quality
of the institutions with which it holds deposits. Similar considerations are given to the
Group’s portfolio of derivative financial instruments.
The Group uses judgement to determine that the credit risk of financial assets has not
significantly changed since initial recognition and regularly monitors the value of the
instruments. As such, credit risk is not considered to be a significant factor in changes to
the values of financial assets. All of the financial derivatives are deemed to have low credit
risk on initial recognition as they are predominantly hedges of foreign exchange risk and
executed with a diverse and strong portfolio of counterparties.
Before accepting a new customer, management assesses the customer’s credit quality and
establishes a credit limit. Credit quality is assessed using data maintained by reputable
credit rating agencies, by the checking of references included in credit applications and,
where they are available, by reviewing the customer’s recent financial statements. Credit
limits are subject to multiple levels of authorisation and are reviewed on a regular basis.
Credit insurance is employed where it is considered to be cost effective. At 30 June 2024,
the majority of trade receivables were due from major retailers in the UK and Europe.
At 30 June 2024, the Group’s maximum exposure to credit risk was as follows (there was
no significant concentration of credit risk):
2024 2023
£m £m
Trade and other receivables:
Trade receivables
134.1
127.8
Other receivables
9.8
11.9
143.9
139.7
Derivative financial instruments
2.0
5.1
Cash and cash equivalents
9.3
1.6
Total
155.2
146.4
(1) Please refer to APM in note 2.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
20. Financial risk management continued
Liquidity risk continued
At 30 June 2024, the carrying amount of trade receivables eligible for transfer and the amounts borrowed under the facility were as follows:
2024 2023
£m £m
Trade receivables available
55.6
49.0
Amount borrowed
(55.6)
(48.7)
Amount undrawn
—
0.3
The Group also has access to uncommitted working capital facilities amounting to £17.9 million (2023: £17.8m). At 30 June 2024, £11.8 million (2023: £0.6m) was drawn against these
facilities in the form of overdrafts and short-term borrowings.
In the following tables, estimated future contractual undiscounted cash flows in respect of the Group’s financial liabilities are analysed according to the earliest date on which the Group
could be required to settle the liability. Floating rate interest payments are estimated based on market interest rates prevailing at the balance sheet date. Payments and receipts in relation
to derivative financial instruments are shown net if they will be settled on a net basis.
Between Between Between Between
Within 1 and 2 2 and 3 3 and 4 4 and 5 After 5
1 year years years years years years Total
£m £m £m £m £m £m £m
At 30 June 2024
Bank overdrafts
(11.8)
—
—
—
—
—
(11.8)
Bank and other loans:
Principal
(55.6)
(65.2)
—
—
—
—
(120.8)
Interest payments
(0.9)
—
—
—
—
—
(0.9)
Lease liabilities
(1)
(3.5)
(3.1)
(1.2)
(0.7)
(0.4)
(0.8)
(9.7)
Other liabilities
(201.0)
—
—
—
—
—
(201.0)
Cash flows on non-derivative liabilities
(272.8)
(68.3)
(1.2)
(0.7)
(0.4)
(0.8)
(344.2)
Cash flows on derivative liabilities
Payments
(72.1)
(0.4)
—
—
—
—
(72.5)
Cash flows on financial liabilities
(344.9)
(68.7)
(1.2)
(0.7)
(0.4)
(0.8)
(416.7)
Cash flows on derivative assets
Receipts
71.9
0.4
—
—
—
—
72.3
(273.0)
(68.3)
(1.2)
(0.7)
(0.4)
(0.8)
(344.4)
(1) Lease liabilities are undiscounted.
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
20. Financial risk management continued
Liquidity risk continued
Between Between Between Between
Within 1 and 2 2 and 3 3 and 4 4 and 5 After 5
1 year years years years years years Total
£m £m £m £m £m £m £m
At 30 June 2023
Bank overdrafts
(0.6)
—
—
—
—
—
(0.6)
Bank and other loans:
Principal
(48 .7)
—
(110.2)
—
—
—
(158.9)
Interest payments
(2.4)
—
—
—
—
—
(2.4)
Lease liabilities
(3.5)
(2.7)
(2.2)
(0.4)
(0.2)
—
(9.0)
Other liabilities
(210.3)
—
—
—
—
—
(210.3)
Cash flows on non-derivative liabilities
(265.5)
(2.7)
(112.4)
(0.4)
(0.2)
—
(381.2)
Cash flows on derivative liabilities
Payments
(59.0)
—
—
—
—
—
(59.0)
Cash flows on financial liabilities
(324.5)
(2.7)
(112.4)
(0.4)
(0.2)
—
(4 40.2)
Cash flows on derivative assets
Receipts
60.0
1.8
1.8
—
—
—
63.6
(264.5)
(0.9)
(110.6)
(0.4)
(0.2)
—
(376.6)
Interest rate risk
Interest rate risk is the risk that the fair value of, or future cash flows associated with, a financial instrument will fluctuate due to changes in market interest rates.
The Group is exposed to interest rate risk on its floating rate borrowings, which it has mitigated using interest rate derivatives in the form of interest rate caps with maturities up to 2026.
Under the Group’s policy the critical terms of the derivatives must align with the hedged items. The interest rate instruments executed are matched against the term, currency and
entity where the borrowing exists, fixing the value of interest paid in line with the Group policy. They are monitored to ensure that critical terms of the instrument continue to match the
transaction.
The hedge ratio is determined by the Group’s Treasury Policy, which states that the Group aims to be c.50% hedged against the potential adverse effects of interest exposure on its
consolidated net debt. The instruments are matched on a 1:1 ratio with the transaction. Hedge ineffectiveness could be caused through fluctuating forecasts. Forecasts are monitored
regularly and the Group intends to repay debt in line with the timeframe of the hedges entered into. If this changes, additional hedges are executed in order to maintain the policy level.
The changes in the time value of the options that relate to hedged items are deferred in the cash flow hedge reserve and are treated as the cost of hedging.
156
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
20. Financial risk management continued
Interest rate risk continued
After taking into account the Group’s currency and interest rate hedging activities, the currency and interest rate profile of the Group’s interest-bearing financial assets and financial
liabilities was as follows:
2024
2023
Danish Polish Other Danish Polish Other
Euro Sterling Krone Zloty currencies Total Euro Sterling Krone Zloty currencies Total
£m £m £m £m £m £m £m £m £m £m £m £m
Floating rate
Bank overdrafts
(9.7)
(2.1)
—
—
—
(11.8)
(0.6)
—
—
—
—
(0.6)
Bank and other loans
(23.0)
1.4
(10.5)
—
—
(32.1)
(0.4)
(32.3)
(9.2)
(3.9)
—
(45.8)
Cash and cash
equivalents
3.6
1.5
0.2
0.2
3.8
9.3
(9.4)
4.2
1.2
1.2
4.4
1.6
(29.1)
0.8
(10.3)
0.2
3.8
(34.6)
(10.4)
(28.1)
(8.0)
(2.7)
4.4
(44.8)
Fixed rate
Bank and other loans
(63.5)
(25.0)
—
—
—
(88.5)
(77.2)
(25.0)
(5.8)
(4.8)
—
(112.8)
Total
(92.6)
(24.2)
(10.3)
0.2
3.8
(123.1)
(87.6)
(53.1)
(13.8)
(7. 5)
4.4
(157.6)
Interest payable on bank overdrafts and floating rate loans is based on base rates and short-term interbank rates (predominantly EURIBOR and SONIA). At 30 June 2024, the weighted
average interest rate payable on bank and other loans was 4.3% (2023: 6.4%). At 30 June 2024, the weighted average interest rate receivable on cash and cash equivalents was 0.0%
(2023: 0.0%).
At 30 June 2024, the Group held interest rate caps which cap the maximum rate payable but allow the rate to float below this maximum.
Interest
rate caps
2024 £m
Carrying amount
1.9
Notional amount
88.5
Maturity date
Jun 2024-May 2026
Hedging ratio
1:1
Change in value of outstanding hedge instruments
(0.9)
Change in value of hedged item used to determine hedge effectiveness
0.9
Weighted average hedged rate for the year
0.00%-4.15%
157
McBride plc Annual Report and Accounts 2024
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
20. Financial risk management continued
Interest rate risk continued
Interest
rate caps
2023 £m
Carrying amount
4.9
Notional amount
112.8
Maturity date
Jun 2023-May 2026
Hedging ratio
1.1
Change in value of outstanding hedge instruments
—
Change in value of hedged item used to determine
hedge effectiveness
—
Weighted average hedged rate for the year
0.00%-4.15%
All interest rate derivatives held by the Group are indexed to three-month EURIBOR,
SONIA, WIBOR or CIBOR.
Fixed or capped interest rates shown in the above table do not include the margin over
market interest rates payable on the Group’s borrowings.
On the assumption that a change in market interest rates would be applied to the interest
rate exposures that were in existence at the balance sheet date and that designated
cash flow hedges are 100% effective, an increase of 100 basis points in market interest
rates would have decreased the Group’s profit before tax by £0.4 million (2023: £0.4m).
Conversely, a decrease of 100 basis points in market interest rates would have increased
the Group’s profit before tax by £0.6 million (2023: £0.7m).
Foreign currency risk
Transaction risk
Foreign currency transaction risk arises on sales and purchases denominated in currencies
other than the functional currency of the entity that enters into the transaction. While the
magnitude of these exposures is relatively low, the Group’s policy is to hedge committed
transactions in full and to hedge a proportion of highly probable forecast transactions
on a twelve-month rolling basis. Foreign currency transaction risk also arises on financial
assets and liabilities denominated in foreign currencies and Group policy allows for these
exposures to be hedged using forward currency contracts.
The Group determines the economic relationship between the hedged item and the
hedging instrument for the purpose of assessing hedge effectiveness. The cost of the
transaction increases as the exchange rate weakens, as the hedge instruments in place
are foreign currency liabilities. This same movement in exchange rates would result in an
increase in the value of the liability. The value of the invoices paid is regularly monitored to
ensure the hedges in place continue to meet the monthly exposures and that critical terms
of the instrument continue to match the transaction. On maturity of the hedge the gain or
loss recorded against the spot rate is recorded in the same income statement line as the
invoiced transaction.
The hedge ratio is determined by the Group’s Treasury Policy, which provides a maximum
and minimum hedge level for a number of time brackets. The compliance with this policy
is monitored monthly and new hedges are also added monthly if required. The level of
hedges required is reviewed monthly during the Treasury Management Committee meeting.
The instruments are matched on a 1:1 ratio with the transaction. Hedge ineffectiveness could
be caused through the different timing of the payment runs so that the hedges mature at
a different point to the invoices being paid, fluctuating forecasts or changes to the nature
of the business. These risks are mitigated through the following measures:
• phasing hedges to cover the change of the timing of payments runs;
• monitoring forecasts monthly and adding hedges to reflect any changes;
• the percentage of hedges permitted allowing for the potential uncertainty towards the
end of the forecast period; and
• building significant changes into the forecast, with any changes being allowed for the
purchases made.
At 30 June 2024, the notional principal amount of outstanding foreign currency contracts
(net purchases) that are held to hedge the Group’s transaction exposures was £16.4 million
(2023: £14.9m). For accounting purposes, the Group has designated the foreign currency
contracts as cash flow hedges. At 30 June 2024, the fair value of the contracts was £(0.2)
million (2023: £(0.2)m). During 2024, a loss of £0.3 million (2023: loss of £0.1m) was
recognised in other comprehensive income and a loss of £0.3 million (2023: gain of £0.3m)
was transferred from the cash flow reserve to the income statement in respect of these
contracts.
Translation risk
Foreign currency translation risk arises on consolidation in relation to the translation into
Sterling of the results and net assets of the Group’s foreign subsidiaries. The Group’s policy
is to hedge a substantial proportion of overseas net assets using a combination of foreign
currency borrowings and foreign currency swaps. The Group hedges part of the currency
exposure on translating the results of its foreign subsidiaries into Sterling using average
rate options. This exposure is also mitigated by the natural hedge provided by the interest
payable on the Group’s foreign currency borrowings. At 30 June 2024, the fair value of the
average rate options was £nil (2023: £nil).
The Group determines the economic relationship between the hedged item and the
hedging instrument for the purpose of assessing hedge effectiveness. The value of Group
assets increases as the exchange rate weakens, as the hedge instrument in place is a
foreign currency liability. This same movement in exchange rates would result in an increase
in the value of the liability. When hedges mature, any settlements offset the gain or loss on
translation of the hedged item and are monitored to ensure critical terms of the instrument
continue to match the transaction.
The hedge ratio is determined by the Group’s Treasury Policy, which states the Group
will hedge up to 100% of the budgeted exposure. The instruments are matched on a 1:1
ratio with the transaction. Hedge ineffectiveness could be caused through fluctuations in
the forecasted numbers. This is mitigated by hedging a relatively low proportion of the
hedged item.
158
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
20. Financial risk management continued
Foreign currency risk continued
Translation risk continued
At 30 June 2024, the Group had designated as net investment hedges £45.7 million (2023: £42.9m) of its Euro-denominated borrowings and three-month rolling foreign currency forward
contracts with a notional principal amount of £55.6 million (2023: £44.1m). During 2024, a gain of £0.8 million (2023: £0.4m) was recognised in other comprehensive income in relation to
the net investment hedges. At 30 June 2024, the fair value of the net investment hedges was a loss of £0.1 million (2023: gain of £0.2m).
The currency profile of the Group’s net assets (excluding non-controlling interests) before and after hedging currency translation exposures was as follows:
2024
2023
Net assets/ Net assets/
(liabilities) Currency Net assets (liabilities) Currency Net assets
before forward after before forward after
hedging contracts hedging hedging contracts hedging
£m £m £m £m £m £m
Sterling
(5.0)
55.6
50.6
(24.8)
44.1
19.3
Euro
35.7
(33.9)
1.8
32.3
(27.9)
4.4
Polish Zloty
7.9
(6.9)
1.0
7.5
(5.8)
1.7
Danish Krone
15.2
(12.5)
2.7
13.0
(10.4)
2.6
Malaysian Ringgit
3.9
—
3.9
4.1
—
4.1
Other
5.7
(2.3)
3.4
5.0
—
5.0
Total
63.4
—
63.4
37.1
—
37.1
The Group’s exposure to a +/- 10% change in EUR/GBP exchange rate is as follows:
2024
2023
EUR +10% EUR -10% EUR +10% EUR -10%
£m £m £m £m
Impact on equity
(1.5)
1.6
(1.3)
1.5
The impact on equity shown above predominantly relates to EUR/GBP contracts that qualify for net investment and cash flow hedge accounting.
The Group uses a combination of foreign currency options and foreign currency forwards to hedge its exposure to foreign currency risk. Under the Group’s policy the critical terms of the
forwards and options must align with the hedged items.
When forward contracts are used to hedge forecast transactions, the Group generally designates the change in the fair value of the forward contract related to both the spot component
and forward element as the hedging instrument. For option contracts the change in the fair value of the option contract related to the intrinsic value is designated as the hedging
instrument. The time value of money is treated as a cost of hedging.
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Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Concentration risk
The Company only enters facility agreements and hedge transactions with entities that are
also party to the RCF. This concentrates risk to a small number of institutes. These institutes
are based across a number of European countries and are well-recognised financial institutes .
21. Capital and net debt
The Group’s capital comprises total equity and net debt.
Capital management
The Directors manage the Group’s capital to safeguard its ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders.
The Directors aim to maintain an efficient capital structure with a relatively conservative
level of debt-to-equity gearing. This is to ensure continued access to a broad range
of financing sources in order to provide sufficient flexibility to pursue commercial
opportunities as they arise.
In order to achieve this overall objective, the Group’s capital management, amongst other
things, aims to ensure that it meets financial covenants attached to borrowings. Breaches
in meeting the financial covenants would permit the bank to call in loans and borrowings
immediately. There have been no breaches in the financial covenants of any borrowings in
the current year.
The capital structure of the Group consists of debt, which includes borrowings disclosed
in note 19, cash and cash equivalents and equity attributable to equity holders of the
Company, comprising issued capital, reserves and retained earnings.
The Group may maintain or adjust its capital structure by adjusting the amount of dividends
paid to shareholders, returning capital to shareholders, issuing new shares or selling assets
to reduce debt. The Group manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and the risk characteristics of the Group, and in
order to meet the financial covenants described in note 20. The Board regularly reviews the
capital structure.
20. Financial risk management continued
Foreign currency risk continued
Translation risk continued
In relation to the hedging activities as described above, the effects of foreign
currency related hedging instruments on the Group’s financial position and performance
are as follows:
Foreign currency forwards
2024
Transactional
Translational
Carrying amount (£m)
(0.2)
(0.1)
Notional amount (£m)
19.0
55.6
Maturity date
July 2023-June 2025
September 2024
Hedging ratio
1:1
1:1
Change in value of outstanding hedge
instruments (£m)
(0.2)
(0.1)
Change in value of hedged item used
to determine hedge effectiveness
(£m)
0.2
0.1
Weighted average hedged rate
for the year
€1.1413:£1
Various
(1)
(1) The weighted average hedged rate for the year, by currency denomination, was €1.1562:£1, Zloty 5.1543:£1,
Krone 8.5810:£1.
Foreign currency forwards
2023
Transactional
Translational
Carrying amount (£m)
(0.2)
0.2
Notional amount (£m)
17.1
44.1
Maturity date
July-June 2024
September 2023
Hedging ratio
1:1
1:1
Change in value of outstanding hedge
instruments (£m)
—
0.3
Change in value of hedged item used
to determine hedge effectiveness
(£m)
—
(0.3)
Weighted average hedged rate for
the year
€1.1668:£1
Various
(1)
(1) The weighted average hedged rate for the year, by currency denomination, was €1.1371:£1, Zloty 5.3427:£1,
Krone 8.4337:£1.
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McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
21. Capital and net debt continued
Capital management continued
No changes were made in the objectives, policies or processes for managing capital during the years ended 30 June 2024 and 30 June 2023.
The Group’s capital was as follows:
2024 2023 2022
£m £m £m
Total equity
63.4
37.1
57.0
Net debt
131.5
166.5
164.4
Capital
194.9
203.6
221.4
2024
%
2023
%
Gearing
(1)
66.0 78.4
(1) Gearing represents net debt divided by the average of opening and closing capital.
IFRS 16 Currency
At 1 July non-cash Cash translation At 30 June
2023
movements
(1)
flows differences 2024
Movements in net debt were as follows: £m £m £m £m £m
Overdrafts
(0.6)
—
(11.2)
—
(11.8)
Bank loans
(109.8)
—
44.5
0.3
(65.0)
Other loans
(48.7)
—
(7.4)
0.5
(55.6)
Lease liabilities
(9.0)
(3.7)
4.5
(0.2)
(8.4)
Financial liabilities
(168.1)
(3.7)
30.4
0.6
(140.8)
Cash and cash equivalents
1.6
—
7.5
0.2
9.3
Net debt
(166.5)
(3.7)
37.9
0.8
(131.5)
IFRS 16 Currency
At 1 July non-cash Cash translation At 30 June
2022
movements
(1)
flows differences 2023
Movements in net debt were as follows: £m £m £m £m £m
Overdrafts
(6.8)
—
6.2
—
(0.6)
Bank loans
(96.4)
—
(13.7)
0.3
(109.8)
Other loans
(53.7)
—
4.9
0.1
(48.7)
Lease liabilities
(12.0)
(1.5)
4.3
0.2
(9.0)
Financial liabilities
(168.9)
(1.5)
1.7
0.6
(168.1)
Cash and cash equivalents
4.5
—
(2.2)
(0.7)
1.6
Net debt
(164.4)
(1.5)
(0.5)
(0.1)
(166.5)
(1) IFRS 16 non-cash movements includes additions of £3.4 million (2023: £1.2m), disposals of £nil (2023: £nil) and interest charged of £0.3 million (2023: £0.3m).
161
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
Non-governmental collected post-employment benefits had the following effect on the
Group’s results and financial position:
2024 2023
£m £m
Profit or loss
Operating profit
Defined contribution schemes
Contributions payable
(3.0)
(2.5)
Defined benefit schemes
Service cost and administrative expenses
(net of employee contributions)
(0.6)
(1.0)
Net charge to operating profit
(3.6)
(3.5)
Finance costs
Net interest cost on defined benefit obligation
(1.2)
(0.5)
Net charge to profit/(loss) before taxation
(4.8)
(4.0)
Other comprehensive income/(expense)
Defined benefit schemes
Net actuarial loss
(5.6)
(14.1)
2024 2023
£m £m
Balance sheet
Defined benefit obligations
UK – funded
(101.6)
(98.1)
Other – unfunded
(12.0)
(12.4)
(113.6)
(110.5)
Fair value of scheme assets
UK – funded
74.1
73.4
Other – unfunded
10.1
10.5
Deficit on the schemes
(29.4)
(26.6)
Related deferred tax asset (note 9)
7. 3
6.5
21. Capital and net debt continued
Capital management continued
A reconciliation of the net cash flow to the movement
in net debt is shown as follows:
2024 2023
£m £m
Increase/(decrease) in net cash and cash equivalents
7.5
(2.2)
Net drawdown/(repayment) of bank loans and overdrafts
25.9
(2.6)
Change in net debt resulting from cash flows
33.4
(4. 8)
Currency translation differences
1.0
(0.3)
Movement in net debt in the year
34.4
(5.1)
Net debt at the beginning of the year excluding
lease liabilities
(157. 5)
(152.4)
Net debt at the end of the year excluding lease liabilities
(123.1)
(157.5)
Lease liabilities at 1 July
(9.0)
(12.0)
Lease liabilities non-cash movements
(3.7)
(1.5)
Repayment of IFRS 16 lease liabilities
4.5
4.3
Currency translation differences
(0.2)
0.2
Net debt at the end of the year
(131.5)
(166.5)
22. Pensions and other post-employment benefits
Overview
The Group provides a number of post-employment benefit arrangements. In the
UK, the Group operates a closed defined benefit pension scheme and a defined
contribution pension scheme. Elsewhere in Europe, the Group has a number of smaller
post-employment benefit arrangements that are structured to accord with local
conditions and practices in the countries concerned. The Group also recognises the assets
and liabilities for all members of the defined contribution scheme in Belgium, accounting
for the whole defined contribution section as a defined benefit scheme under IAS 19,
‘Employee Benefits’, as there is a risk the underpin will require the Group to pay further
contributions to the scheme.
At 30 June 2024, the Group recognised a deficit on its UK defined benefit pension plan of
£27.5 million (2023: £24.7m). The Group’s post-employment benefit obligations outside
the UK amounted to £1.9 million (2023: £1.9m).
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Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
(ii) Assumptions and sensitivities
For accounting purposes, the Fund’s benefit obligation has been calculated based on data
gathered for the 2021 triennial actuarial valuation and by applying assumptions made
by the Company on the advice of an independent actuary in accordance with IAS 19,
‘Employee Benefits’, which differ in certain respects from the assumptions made by the
Trustee for the purpose of the actuarial valuation.
The principal assumptions used in calculating the benefit obligation at the end of the year
were as follows:
2024
2023
Discount rate
5.10%
5.30%
Inflation rate:
Retail Prices Index
3.25%
3.25%
Consumer Prices Index
2.60%
2.60%
Revaluation of deferred pensions (in excess of GMP)
Accrued before 6 April 2009
2.60%
2.60%
Accrued on or after 6 April 2009
2.60%
2.60%
Increase in pensions in payment (in excess of GMP)
Accrued before 1 April 2011
2.97%
2.92%
Accrued on or after 1 April 2011
1.92%
1.84%
The duration of the Fund’s liabilities is estimated to be twelve years, i.e. the average time
until a payment is made is twelve years. In practice, the Fund’s liabilities continue for
upwards of 50 years.
The mortality assumptions are based on a medically underwritten mortality study which
was carried out in 2017 to identify the current health of a sample group of Fund members,
and a postcode analysis for the remainder of the membership. This was translated into
mortality assumptions for use in calculating the IAS 19 scheme liabilities. Specifically, a
rating of 102% (2023: 102%) of the standard Self-Administered Pension Scheme (SAPS)
S2 tables has been used for the IAS 19 disclosures as at 30 June 2024.
22. Pensions and other post-employment benefits continued
UK defined benefit pension scheme
(i) Background
In the UK, the Robert McBride Pension Fund (‘the Fund’) provides pension benefits
based on the final pensionable salary and period of qualifying service of the
participating employees. The UK defined benefit fund was closed to future service
accrual from 29 February 2016. Staff affected by this change were offered a new defined
contribution scheme from that date.
The Fund is administered and managed by Robert McBride Pension Fund Trustees Limited
(‘the Trustee’), in accordance with the terms of a governing Trust Deed and relevant
legislation. Regular assessments of the Fund’s benefit obligations are carried out by an
independent actuary on behalf of the Trustee and long-term contribution rates are agreed
between the Trustee and the Company on the basis of the actuary’s recommendations.
Following the triennial valuation at 31 March 2021, the Company and Trustee agreed a new
deficit reduction plan based on the scheme funding deficit of £48.4 million. The current
level of deficit contributions of £4.0 million per annum, payable until 31 March 2028, will
continue and this is expected to eliminate the deficit by 31 March 2028. The Company
agreed separately that, from 1 October 2024, conditional profit-related contributions of
£1.7 million per annum will be paid over the period to 31 March 2028. If adjusted operating
profit exceeds £35.0 million, additional annual deficit contributions of £1.7 million will
be due over the following year. If adjusted operating profit is below £30.0 million then
no profit-related contributions will be due the following year. If reported adjusted
operating profit is between £30.0 million and £35.0 million, a proportion of the
£1.7 million contribution will be due over the following year, with incremental increases of
£0.34 million of additional contributions for each whole £1.0 million of adjusted operating
profit in excess of £30.0 million. As adjusted operating profit for the twelve months to
31 March 2024 exceeded £35.0 million, additional deficit contributions of £0.14 million will
be payable each month from 1 October 2024, with total additional payments for the year
ending 30 June 2025 expected to be £1.3 million. The Company has also agreed to make
additional contributions such that the total deficit contributions in any year match the
value of any dividend paid. These arrangements will provide scope to de-risk and/or
accelerate the recovery plan, where affordability of the business allows. The funding
arrangements and recovery plan will next be reviewed by the Company and Trustee as
part of the 31 March 2024 valuation.
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McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
(iii) Fund’s assets
The Fund’s assets are held separately from those of the Group and are managed by
professional investment managers on behalf of the Trustee.
A cash flow driven investment (CDI) strategy was implemented during the first half of
the financial year to 30 June 2020. Using credit/bond investments, the CDI strategy was
intended to deliver a stable, more certain expected return and reduced volatility. The
strategy previously targeted a c.100% hedge of interest rates and inflation. This strategy
worked well until the government bond crisis in 2022. Following that crisis, and the
resultant changes in liability-driven investment (LDI) managers’ collateral requirements,
the Trustee amended the strategy in October 2022 and as an interim step moved to
an unlevered government bond-based hedge with c.40% of interest rate and inflation
hedging. The investment strategy was then reviewed, and hedging was increased to c.65%
of interest rates and inflation during October to December 2023 to broadly hedge the
funding level of the Fund and strike a balance between risk and return objectives and
liquidity needs of the Fund.
The Fund holds no investment in securities issued by, nor any property used by, McBride
plc or any of its subsidiaries. The fair value of the Fund’s assets at the end of the year was
as follows:
2024 Asset 2023 Asset
£m classification £m classification
Private markets
21.1
Unquoted
19.8
Unquoted
Liability-driven investment
28.1
Quoted
16.2
Quoted
Credit
19.4
Unquoted
36.6
Unquoted
Cash and cash equivalents
5.5
Quoted
0.8
Quoted
Total
74.1
73.4
Except for the LDI assets and the credit default swaps (CDS), all of the Fund’s assets are
held in pooled funds. The liability-driven investment, cash and credit assets are classified
as Level 2 instruments, as they are not quoted on any stock exchange, although their
value is directly related to the value of the underlying holdings. The private market credit
assets are Level 3 instruments, with no daily quoted price available.
The expected return on the Fund’s assets must be set to be in line with the discount rate
used to value the Fund’s liabilities. This equates to an expected return over the year of
£3.9 million (2023: £3.8m).
The actual return on the Fund’s assets during the year was a gain of £1.4 million
(2023: loss of £26.8m). This includes a loss on assets in excess of interest income of
£2.5 million (2023: loss of £30.6m), which has resulted from a reduction in corporate
bond yields over the year.
22. Pensions and other post-employment benefits continued
UK defined benefit pension scheme continued
(ii) Assumptions and sensitivities continued
As at 30 June 2024, the future mortality improvement model has been updated to
reflect the most recent Continuous Mortality Investigation (CMI) 2023 projections with
an allowance for long-term rates of improvement of 1.0% p.a. for males and females.
Previously, in 2023, this assumption had been CMI 2022 with a long-term rate of
improvement of 1.0% p.a. for males and females. In line with the 2022 CMI model, the
2023 CMI model has a smoothing parameter for which the default value of 7.0 (2023:
7.0) has been adopted. There is also an initial addition parameter for which the default
value of 0.25% (2023: 0.25%) has been adopted. These assumptions are equivalent to
a life expectancy at 65 of 20.9 years (2023: 20.8 years) for males and 23.1 years (2023:
23.0 years) for females.
2024 2023
Life expectancies at age 65 for: Years Years
Member retiring in the next year:
Male
20.9
20.8
Female
23.1
23.0
Member retiring 20 years from now:
Male
21.8
21.8
Female
24.2
24.2
At 30 June 2024, the sensitivity of the benefit obligation to changes in the principal
assumptions was as follows (assuming in each case that the other assumptions are
unchanged):
Change in Increase in Decrease in
assumption assumption assumption
Discount rate
+/- 0.1%
Decrease by £1.3m
Increase by £1.3m
Inflation rate
(1)
+/- 0.1%
Increase by £0.9m
Decrease by £0.9m
Life expectancy
+1 year
Increase by £3.1m
n/a
(1) This includes the impact on deferred and in-payment pension increase assumptions.
The assumption sensitivities are reasonable expectations of potential changes in the
assumptions.
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McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
(vi) Impact of NTL vs Virgin Media case, 25 July 2024
In June 2023, the High Court judged that amendments made to the Virgin Media scheme
were invalid because the scheme’s actuary did not provide the associated Section 37
certificate. The High Court’s decision has wide-ranging implications, affecting other
schemes that were contracted out on a salary-related basis and made amendments
between April 1997 and April 2016. The Fund was contracted out until 29 February 2016
and amendments were made during the relevant period. As such, the ruling could have
implications for the Company. Following the Court of Appeal upholding the 2023 High
Court ruling on 25 July 2024, the Trustees initiated the process of investigating any
potential impact for the Fund.
As the detailed investigation is in progress, the Company considers that the amount
of any potential impact on the defined benefit obligation cannot be confirmed and/or
measured with sufficient reliability at the 2024 year end. We are therefore disclosing this
issue as a potential contingent liability at 30 June 2024 and will review again in 2025
based on the findings of the detailed investigation.
Belgium defined contribution pension scheme
(i) Background
From 1 July 2021, the Group recognised the assets and liabilities for all members of the
defined contribution scheme in Belgium, accounting for the whole defined contribution
section as a defined benefit scheme under IAS 19, ‘Employee Benefits’, as there is a risk
the underpin will require the Group to pay further contributions to the scheme.
(ii) Assumptions and sensitivities
The principal assumptions used in calculating the benefit obligation at the end of the
year were as follows:
2024
2023
Discount rate
3.65%
3.65%
Inflation rate
2.20%
2.20%
Salary increase rate on top of inflation
0.00%
0.00%
Mortality tables
MR-5/FR-5
MR-5/FR-5
Retirement age
65
65
Withdrawal rate
0.00%
0.00%
At 30 June 2024, the sensitivity of the benefit obligation to a 0.5% increase and decrease
in the discount rate assumptions resulted in no change to the scheme liabilities.
(iii) Experience gains and losses
Actuarial gains and losses recognised in other comprehensive income represent the effect
of the differences between the assumptions and actual outcomes.
At 30 June 2024, the cumulative net actuarial loss in relation to the Fund that has been
recognised in other comprehensive income amounted to £nil (2023: £nil).
22. Pensions and other post-employment benefits continued
UK defined benefit pension scheme continued
(iv) Movements in the Fund’s assets and liabilities
Movements in the fair value of the Fund’s assets during the year were as follows:
2024 2023
£m £m
At 1 July
73.4
102.2
Expected return on plan assets
3.9
3.8
Loss on assets in excess of interest income on Fund assets
(2.5)
(30.6)
Employer’s contributions
4.0
4.0
Benefits paid
(4.7)
(6.0)
At 30 June
74.1
73.4
Movements in the benefit obligation during the year were as follows:
2024 2023
£m £m
At 1 July
(98.1)
(116.6)
Interest cost
(5.1)
(4.2)
Remeasurement (loss)/gain arising from changes in
financial assumptions
(3.1)
24.3
Remeasurement gain arising from changes in
demographic assumptions
—
1.9
Experience loss on liabilities
—
(9.5)
Benefits paid
4.7
6.0
At 30 June
(101.6)
(98.1)
(v) Experience gains and losses
Actuarial gains and losses recognised in other comprehensive income represent the effect
of the differences between the assumptions and actual outcomes.
At 30 June 2024, the cumulative net actuarial loss in relation to the Fund that has been
recognised in other comprehensive income amounted to £53.0 million (2023: £46.9m).
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Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
23. Employee share schemes
Share awards
The Group operates a performance-based Long-Term Incentive Plan (LTIP) for the Executive Directors and certain other senior executives. Awards made under the LTIP vest provided the
participant remains in the Group’s employment during the three-year vesting period and the Group achieves the related performance conditions. In the current year, 50% of the awards
granted vest dependent on the growth in the Group’s EPS (a vesting condition) and 50% of the awards granted vest dependent on the growth in the Group’s adjusted ROCE (a vesting
condition). In previous years, up to 50% of each award vests dependent on the growth in the Group’s EPS (a vesting condition) and up to 50% of each award vests dependent on the
reduction in the Group’s net debt to adjusted EBITDA
(1)
ratio (a vesting condition).
During the year, Restricted Share Units (RSUs) were granted to Executive Directors and certain other senior executives. Awards made under the RSU vest provided the participant remains
in the Group’s employment during the three-year vesting period.
Vested awards are settled in the form of the Company’s ordinary shares (equity-settled) or by the payment of cash equivalent to the market value of the Company’s ordinary shares on
the vesting date (cash-settled). From 2017, all awards granted result in equity-settled amounts.
Further information on the LTIP and RSU awards is set out in the Remuneration Committee Report.
Movements in LTIP and RSU awards outstanding were as follows:
2024
2023
LTIP Equity- RSU Equity- Cash LTIP Equity- RSU Equity- Cash
settled settled settled settled settled settled
Number Number Number Number Number Number
Outstanding at 1 July
6,624,716
5,607,207
175,213
5,757,310
1,264,494
175,213
Granted
2,816,579
2,967,711
—
2,398,821
4,461,052
—
Exercised
—
(231,079)
—
—
(98,864)
—
Forfeited
(260,104)
(805,482)
—
—
(19,475)
—
Lapsed
(2,395,481)
—
(175,213)
(1,531,415)
—
—
Outstanding at 30 June
6,785,710
7,538, 357
—
6,624,716
5,607,207
175,213
Unvested at 30 June
6,785,710
7,538, 357
—
6,624,716
5,607,207
—
Awards made under the LTIP and RSU have a £nil exercise price.
The maximum term of equity-settled awards granted in the year is three years. The weighted average remaining life of equity-settled awards at 30 June 2024 is 1.5 years (2023: 1.6 years).
The weighted average remaining life of cash-settled awards at 30 June 2024 is nil years (2023: 0.7 years).
During 2024, no cash LTIP awards vested (2023: none), no equity-settled LTIP awards vested (2023: none) and 231,079 RSU awards vested (2023: 98,864). The weighted average share
price on the vesting date of equity-settled awards in 2024 was 72.0 pence (2023: 27.0p).
At 30 June 2024, the liability recognised in relation to cash-settled awards was £nil (2023: £0.3m).
(1) See note 2 on page 132.
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McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
23. Employee share schemes continued
Share awards continued
At the grant date, the weighted average fair value of LTIP awards granted during the year was 37.3 pence (2023: 21.9p). Fair value was measured using a variant of the Black-Scholes
valuation model based on the following assumptions:
Sep Oct Oct Sep
2023 2022 2021 2021
Risk-free interest rate
n/a
n/a
n/a
n/a
Share price on grant date
40.5p
24.0p
71.0p
80.0p
Dividend yield on the Company’s shares
n/a
n/a
n/a
n/a
Volatility of the Company’s shares
n/a
n/a
n/a
n/a
Expected life of LTIP awards
3 years
3 years
3 years
3 years
Risk-free rate, dividend yield and volatility have no impact on nil cost awards which are subject to non-market-based performance conditions.
At the grant date, the weighted average fair value of RSU awards granted during the year was 44.1 pence (2023: 24.1p). Fair value was based on the share price at the date of grant with
the following assumptions:
Jun Nov Sep Jun Nov Oct Jun Feb Oct 22 Sep 13 Sep
2024 2023 2023 2023 2022 2022 2022 2022 2021 2021 2021
Risk-free interest rate
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Share price on grant date
118.0p
61.0p
40.5p
27.0p
25.0p
25.0p
30.8p
46.0p
71.0p
81.0p
80.0p
Dividend yield on the Company’s shares
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Volatility of the Company’s shares
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Expected life of RSU awards
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
Risk-free rate, dividend yield and volatility have no impact on nil cost awards which are subject to non-market-based performance conditions.
Compensation expense recognised in profit or loss in relation to employee share schemes was as follows:
2024 2023
£m £m
Equity-settled awards
1.6
0.5
Total expense
1.6
0.5
Deferred Annual Bonus Plan
The Group has in force a Deferred Annual Bonus Plan for the main Executive Directors. There is no exercise price for the shares awarded under the plan, which are subject to a vesting
period of three years and will normally vest on the expiry of this period and are normally only payable if the Director remains employed by the Group at the end of that period. Awards
granted under the Deferred Annual Bonus Plan are eligible for dividend equivalent payments.
In the current year, 513,336 share awards have been granted under the Deferred Annual Bonus Plan (2023: nil). The total amount included in operating profit in relation to the Deferred
Annual Bonus Plan was £nil (2023: £nil).
167
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
24. Provisions
Reorganisation Independent
and Leasehold Environmental business
restructuring dilapidations remediation review Other Total
£m £m £m £m £m £m
At 1 July 2022
0.8
1.5
2.7
1.7
0.5
7. 2
(Released)/charged to profit or loss
(0.1)
0.2
0.7
1.0
—
1.8
Currency translation difference
—
—
0.1
—
—
0.1
Utilisation
(0.4)
—
(0.5)
(2.6)
(0.3)
(3.8)
At 30 June 2023
0.3
1.7
3.0
0.1
0.2
5.3
(Released)/charged to profit or loss
—
(0.1)
0.8
3.8
—
4.5
Currency translation difference
—
—
(0.2)
—
—
(0.2)
Utilisation
—
(1.3)
(0.8)
(3.9)
—
(6.0)
At 30 June 2024
0.3
0.3
2.8
—
0.2
3.6
2024 2023
Analysis of provisions: £m £m
Current
2.2
2.7
Non-current
1.4
2.6
Total
3.6
5.3
The closing provision for reorganisation and restructuring relates to the Group’s logistics Transformation programme only. The provision is expected to be fully utilised within twelve
months of the balance sheet date.
The leasehold dilapidations provision relates to costs expected to be incurred to restore leased properties to their original condition at the end of the respective lease terms. A provision
has been recognised for the present value of the estimated expenditure required to undertake restoration works. Amounts will be utilised as the respective leases end and restoration
works are carried out, within a period of approximately twelve months.
The environmental remediation provision relates to historical environmental contamination at a site in Belgium. The additional costs in the year of £0.8 million relate to a re-evaluation of
the cost of environmental remediation. The closing provision is expected to be utilised as the land is restored within a period of approximately ten years, with £1.6 million expected to be
utilised within twelve months.
The independent business review provision related to the amendment of the Group’s revolving credit facility and banking covenants. The provision for consultancy support for the
independent business review programme was utilised in the year.
Other provisions of £0.2 million are expected to be settled within a period of approximately three years.
The amount and timing of all cash flows related to the provisions are reasonably certain.
168
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
25. Share capital and reserves
Share capital
Authorised,
allotted and fully paid
Number
£m
Ordinary shares of 10 pence each
At 1 July 2022, 30 June 2023 and 30 June 2024
174,057,328
17.4
Ordinary shares carry full voting rights and ordinary shareholders are entitled to attend Company meetings and to receive payments to shareholders.
Reserves
(i) Share premium account
The share premium account records the difference between the nominal amount of shares issued and the fair value of the consideration received. The share premium account may be
used for certain purposes specified by UK law, including to write off expenses incurred on any issue of shares or debentures and to pay up fully paid bonus shares. The share premium
account is not distributable but may be reduced by special resolution of the Company’s ordinary shareholders and with court approval.
(ii) Cash flow hedge reserve
The cash flow hedge reserve comprises the cumulative net change in the fair value of hedging instruments in designated cash flow hedging relationships recognised in other
comprehensive income.
(iii) Currency translation reserve
The currency translation reserve comprises cumulative currency translation differences on the translation of the Group’s net investment in foreign operations into Sterling together
with the cumulative net change in the fair value of hedging instruments in designated net investment hedging relationships recognised in other comprehensive income.
(iv) Capital redemption reserve
The capital redemption reserve records the cost of shares purchased by the Company for cancellation or redeemed in excess of the proceeds of any fresh issue of shares made
specifically to fund the purchase or redemption. The capital redemption reserve is not distributable but may be reduced by special resolution of the Company’s ordinary shareholders
and with court approval.
Own shares
Treasury shares
Employee Benefit Trust
Total
Number
£m
Number
£m
Number
£m
At 1 July 2022
42,041
—
587,159
0.5
629,200
0.5
Shares paid out to employees
—
—
(100,512)
(0.1)
(100,512)
(0.1)
At 30 June 2023
42,041
—
486,647
0.4
528,688
0.4
Shares paid out to employees
—
—
(233,150)
—
(233,150)
—
Shares purchased
—
—
3,055,537
2.8
3,055,537
2.8
At 30 June 2024
42,041
—
3,309,034
3.2
3,351,075
3.2
The treasury shares and the shares in trust represent the Company’s ordinary shares that are acquired to satisfy the Group’s expected obligations under employee share schemes.
The market value of own shares held at 30 June 2024 was £4.7 million (2023: £0.1m).
169
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Strategic Report Governance Report Additional Information
Financial Statements
26. Capital commitments
Capital expenditure contracted but not provided
2024 2023
£m £m
Contracted but not provided on property, plant and equipment
5.0
4.8
Contracted but not provided on other intangible assets
0.7
0.7
Total
5.7
5.5
27. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and therefore are not required to be disclosed in
these financial statements. Details of transactions between the Group and other related parties are disclosed below.
Post-employment benefit plans
As shown in note 22, contributions amounting to £7.0 million (2023: £6.5m) were payable by the Group to pension schemes established for the benefit of its employees. At 30 June 2024,
£0.5 million (2023: £0.6m) in respect of contributions due was included in other payables.
Compensation of key management personnel
For the purposes of these disclosures, the Group regards its key management personnel as the Directors and certain members of the senior executive team.
Compensation relating to key management personnel in respect of their services to the Group was as follows:
2024 2023
£m £m
Short-term employee benefits
3.8
2.5
Post-employment benefits
0.1
0.1
Share-based payments
1.2
0.3
Total
5.1
2.9
Detailed remuneration disclosures are provided in the Annual Report on Remuneration on pages 91 to 102.
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
170
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Consolidated Financial Statements continued
Year ended 30 June 2024
28. Events after the reporting date
There are no events after the reporting date that require disclosure in the financial
statements.
29. Exchange rates
The principal exchange rates used to translate the results, assets and liabilities and cash
flows of the Group’s foreign operations into Sterling were as follows:
Average rate
Closing rate
2024
2023
2024
2023
Euro
1.16
1.15
1.18
1.17
US Dollar
1.26
1.20
1.26
1.27
Danish Krone
8.68
8.56
8.81
8.68
Polish Zloty
5.11
5.38
5.09
5.17
Czech Koruna
28.72
27.72
29.57
27.66
Hungarian Forint
449.75
453.41
466.81
433.34
Malaysian Ringgit
5.91
5.41
5.97
5.91
Australian Dollar
1.92
1.79
1.90
1.91
171
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Company Balance Sheet
At 30 June 2024
Note
2024
£m
2023
£m
Fixed assets
Investments 5 158.4 158.4
Current assets
Trade and other debtors 6 130.4 135.7
Cash and cash equivalents 1.4 3.8
Creditors: amounts falling due within one year 7 (82.5) (76.7)
Net current assets 49.3 62.8
Total assets less current liabilities 207.7 221.2
Creditors: amounts falling due after more than one year 8 (47.0) (75.9)
Provisions 10 — (0.1)
Net assets 160.7 145.2
Capital and reserves
Issued share capital 12 17.4 17.4
Share premium account 68.6 68.6
Capital redemption reserve 77.2 77.2
Cash flow hedge reserve 1.6 3.6
Accumulated losses
At 1 July (21.6) 0.3
Profit/(loss) for the year 16.1 (21.6)
Other movements 1.4 (0.3)
(4.1) (21.6)
Total shareholders’ funds 160.7 145.2
The financial statements on pages 172 to 180 were approved by the Board of Directors on 16 September 2024 and were signed on its behalf by:
Chris Smith
Director
McBride plc
Registered number: 02798634
172
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Company Statement of Changes in Equity
Year ended 30 June 2024
Issued
share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Cash flow
hedge
reserve
£m
Accumulated
losses
£m
Total
shareholders’
funds
£m
At 1 July 2022 17.4 68.6 77. 2 1.2 0.3 164.7
Year ended 30 June 2023
Loss for the year — — — — (21.6) (21.6)
Other comprehensive income
Items that may be reclassified to profit or loss:
Net changes in fair value — — — 1.8 — 1.8
Cash flow hedges transferred to profit and loss — — — 0.6 — 0.6
Total other comprehensive income — — — 2.4 — 2.4
Total comprehensive income/(expense) — — — 2.4 (21.6) (19.2)
Transactions with owners of the parent
Share-based payments — — — — 0.2 0.2
Taxation relating to the above — — — — (0.5) (0.5)
At 30 June 2023 17.4 68.6 77.2 3.6 (21.6) 145.2
Year ended 30 June 2024
Profit for the year — — — — 16.1 16.1
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Net changes in fair value — — — (0.7) — (0.7)
Cash flow hedges transferred to profit and loss — — — (1.3) — (1.3)
Total other comprehensive expense — — — (2.0) — (2.0)
Total comprehensive (expense)/income — — — (2.0) 16.1 14.1
Transactions with owners of the parent
Share-based payments — — — — 0.8 0.8
Taxation relating to the above — — — — 0.6 0.6
At 30 June 2024 17.4 68.6 77. 2 1.6 (4.1) 160.7
173
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements
Year ended 30 June 2024
The Directors have taken advantage of the exemption available under section 408 of
the Companies Act 2006 and not presented an income statement or a statement of
comprehensive income for the Company alone. A summary of the Company’s material
accounting policies is set out below.
The accounting policies adopted are consistent with those of the annual financial
statements for the year ended 30 June 2023.
Principal accounting policies
Investments in subsidiaries
Investments in subsidiaries are held at cost, less provision for impairment. Any potential
impairment is determined on a basis of the carrying value of the investment against the
higher of net assets or discounted future cash flows.
Subsidiaries in the UK have taken advantage of an exemption from audit under section
479A of the Companies Act 2006. As the ultimate parent, McBride plc has provided a
statutory guarantee for any outstanding liabilities of these businesses. These subsidiaries
have been included in the consolidated financial statements of McBride plc as at
30June2024.
Financial instruments
The Company classifies its financial assets in the following categories:
• those to be measured subsequently at fair value (either through other comprehensive
income (OCI) or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Company’s business model for managing the financial
assets and the contractual terms of the cash flows. For assets measured at fair value, gains
and losses will either be recorded in profit or loss or OCI. The Company reclassifiesdebt
instruments when, and only when, its business model for managing those assets changes.
At initial recognition, the Company measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss (FVPL), transaction costs
that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when
determining whether their cash flows are solely payment of principal and interest.
1. Corporate information
McBride plc (‘the Company’) is the ultimate Parent Company of a group of companies
that together is the leading European manufacturer and supplier of private label and
contract manufactured products for the domestic household and professional cleaning
and hygiene markets. TheCompany offers end-to-end development and manufacturing
capabilities to a wide range of customers in Europe and Asia Pacific.
The Company is a public company limited by shares, with shares traded on the London
Stock Exchange, incorporated and domiciled in the United Kingdom and registered in
England and Wales. The address of its registered office is McBride plc, Middleton Way,
Middleton, Manchester M24 4DP.
2. Accounting policies
Accounting period
The Company’s annual financial statements are drawn up to 30 June. These financial
statements cover the year ended 30 June 2024 (‘2024’) with comparative amounts
fortheyear ended 30 June 2023 (‘2023’).
Basis of preparation
The Company’s financial statements have been prepared in accordance with Financial
Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). The financial
statements have been prepared under the historical cost convention and in accordance
with the Companies Act 2006 as applicable to companies using FRS 101. In preparing
these financial statements, the Company applies the recognition, measurement and
disclosure requirements of International Financial Reporting Standards as adopted by
the UK (UK-adopted international accounting standards), but makes amendments where
necessary in order to comply with the Companies Act 2006 and to take advantage of
FRS101 disclosure exemptions.
FRS 101 sets out amendments to IFRS that are necessary to achieve compliance with
the Act and related regulations. As permitted by FRS 101, the Company has taken
advantage of the disclosure exemptions available under that standard in relation to
business combinations, financial instruments, share-based payments, capital management,
presentation of comparative information in respect of certain assets, presentation of a
cash flow statement, standards not yet effective, impairment of assets and related party
transactions. Where required, equivalent disclosures are given in the consolidated financial
statements of McBride plc.
For further information on going concern, please see note 2 in the consolidated financial
statements on page 121.
174
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements continued
Year ended 30 June 2024
(iii) Trade payables
Trade payables are initially recognised at fair value and subsequently held at
amortisedcost.
(iv) Bank and other loans
Bank and other loans are initially recognised at fair value, net of directly attributable
transaction costs, if any, and are subsequently measured at amortised cost using the
effective interest rate method.
(v) Derivative financial instruments
The Company uses derivative financial instruments to hedge its exposure to foreign
exchange and interest rate risks arising from operating, financing and investing activities.
The Company does not hold or issue derivative financial instruments for trading purpose;
however, if derivatives do not qualify for hedge accounting, they are accounted for as such.
Derivative financial instruments are recognised and stated at fair value. Where derivatives
do not qualify for hedge accounting, any gains or losses on remeasurement are
immediately recognised in the Company income statement. Where derivatives qualify for
hedge accounting, recognition of any resultant gain or loss depends on the nature of the
hedge relationship and the items being hedged. In order to qualify for hedge accounting,
the Company is required to document, from inception, the relationship between the item
being hedged and the hedging instrument.
The Company is also required to document and demonstrate an assessment of the
relationship between the hedged item and the hedging instrument, which shows that the
hedge will be highly effective on an ongoing basis. This effectiveness testing is performed
at each reporting date to ensure that the hedge remains highly effective.
Derivative financial instruments with maturity dates of more than one year from the
balance sheet date are disclosed as non-current.
The Company has entered into a number of financial derivative contracts and each is
discussed in turn.
The Company enters into forward foreign exchange contracts to mitigate the exchange
risk for certain foreign currency debtors. At 30 June 2024, the outstanding contracts all
mature within twelve months (2023: twelve months) of the year end. The Company is
committed to sell PLN and EUR and receive a fixed Sterling amount.
The Company also enters into interest rate cap contracts to mitigate against the floating
interest rates on RCF debt. At 30 June 2024, there are seven outstanding contracts: one
matures within twelve months of the year end with the remaining six maturing more than
twelve months after the year end.
All contracts are measured at fair value, which is determined using valuation techniques
that utilise observable inputs. The key assumptions used in valuing derivatives are the
exchange rates for GBP:EUR and GBP:PLN as well as EUR and GBP interest rates.
2. Accounting policies continued
Principal accounting policies continued
Financial instruments continued
Subsequent measurement of debt instruments depends on the Company’s business model
for managing the asset and the cash flow characteristics of the asset. There are three
measurement categories into which the Company classifies its debt instruments:
• amortised cost: Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured
at amortised cost. Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other
gains/(losses) together with foreign exchange gains and losses. Impairment losses
are presented as a separate line item in the statement of profit or loss. The Company
assesses on a forward-looking basis the expected credit losses associated with its debt
instruments carried at amortised cost. The impairment methodology applied depends
on whether there has been a significant increase in credit risk;
• fair value through other comprehensive income (FVOCI): Assets that are held for
collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured
at FVOCI. Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest income and foreign exchange
gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in other gains/(losses). Interest income
from these financial assets is included in finance income using the effective interest
rate method. Foreign exchange gains and losses are presented in other gains/(losses)
and impairment expenses are presented as a separate line item in the statement of
profit or loss; and
• fair value through profit or loss (FVPL): Assets that do not meet the criteria for
amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the year in which it arises.
(i) Trade and other debtors
Trade and other debtors are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method, less provision for impairment. Under
the Company’s business model, trade debtors are held for collection of contractual cash
flows and represent solely payments of principal and interest.
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits available on demand and
other short-term, highly liquid investments with a maturity on acquisition of three months
or less and bank overdrafts. Bank overdrafts are presented as current liabilities to the
extent that there is no right of offset or intention to offset with cash balances.
175
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements continued
Year ended 30 June 2024
Guarantees
From time to time, the Company enters into financial guarantee contracts to guarantee
the indebtedness of its subsidiaries. The Company accounts for these contracts under
IAS32, IFRS 7 and IFRS 9 . Financial guarantee contracts are initially measured at fair
value and subsequently measured at the higher of fair value and the expected credit loss.
Payments to shareholders
Dividends paid and received are included in the Company financial statements in the
year in which the related dividends are actually paid or received or, in respect of the
Company’s final dividend for the year, approved by shareholders.
It is the Board’s intention that any future dividends will be final dividends paid annually
incash, not by the allotment and issue of B Shares. Consequently, the Board is not seeking
shareholder approval at the 2024 AGM to capitalise reserves for the purposes of issuing
B Shares or to grant Directors the authority to allot such shares. Existing B Shares will
continue to be redeemable but limited to one redemption date per annum in November
ofeach year. B Shares issued but not redeemed are classified as current liabilities.
Own shares
Own shares represent the Company’s ordinary shares that are held by the Company in
treasury or by a sponsored ESOP trust to employee share schemes. When own shares are
acquired, the cost of purchase in the market is deducted from the profit and loss account
reserve. Gains and losses on the subsequent transfer or sale of own shares are recognised
directly in the profit and loss account.
Cash flow statement
A cash flow statement is not presented in these financial statements on the grounds that
the Company’s cash flows are included in the consolidated financial statements of the
Company and its subsidiaries.
Critical judgements and key sources of estimation uncertainty
In applying the Company’s accounting policies as described in this note, the Directors are
required to make judgements, and estimates and assumptions, that affect the reported
amounts of its assets, liabilities, income and expenses that are not readily identifiable
from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual outcomes could
differ from those estimates and affect the Company’s results in future years.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the year in which the estimate is revised if the
revision affects only that year, or in the year of the revision and future years if the revision
affects both current and future years.
The Directors consider that no critical judgements are made in preparing these financial
statements.
The Directors consider the following to be the key sources of estimation uncertainty
present in preparing these financial statements.
2. Accounting policies continued
Principal accounting policies continued
Foreign currency translation
Transactions denominated in foreign currencies are translated into Sterling at the
exchange rate ruling on the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the exchange rate ruling on the
balance sheet date. Currency translation differences are recognised in the income
statement.
Share-based payments
The Company operates incentive share schemes under which it grants equity-settled and
cash-settled awards over its own ordinary shares to certain employees of its subsidiaries.
The Company recognises a capital contribution to the subsidiaries concerned that is
based on the fair value of the awards measured using the Black-Scholes option pricing
formula or the Monte Carlo valuation model.
For equity-settled awards, the fair value reflects market performance conditions and all
non-vesting conditions. Fair value is determined at the grant date and is not subsequently
remeasured unless the relevant conditions are modified. Adjustments are made to the
compensation expense to reflect actual and expected forfeitures due to failure to satisfy
service conditions or non-market performance conditions. For cash-settled awards, the
fair value reflects all the conditions on which the award is made and is remeasured at each
reporting date and at the settlement date.
Generally, the capital contribution is recognised on a straight-line basis over the vesting
period. For equity-settled awards, a corresponding credit is recognised directly in
reserves, while for cash-settled awards a corresponding liability to settle is recognised in
the balance sheet.
Taxation
Current tax is the amount of tax payable in respect of the taxable profit or loss for the
year. Taxable profit differs from accounting profit because it excludes income or expenses
that are recognised in the year for accounting purposes but are either not taxable or not
deductible for tax purposes or are taxable or not deductible in earlier or subsequent years.
Deferred tax is recognised on temporary differences between the recognition of items
ofincome or expenses for accounting purposes and their recognition for tax purposes.
Adeferred tax asset in respect of a deductible temporary difference or a carried-forward
tax loss is recognised only to the extent that it is considered more likely than not that
sufficient taxable profits will be available against which the reversing temporary difference
or the tax loss can be deducted. Deferred tax assets and liabilities are not discounted.
Current and deferred tax is measured using tax rates that have been enacted or
substantively enacted at the balance sheet date.
176
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements continued
Year ended 30 June 2024
5. Investments
£m
Carrying amount as at 1 July 2022, 30 June 2023
and 30 June 2024 158.4
The Directors have assessed the Company’s investments for indicators of impairment
and have concluded that none are present. Therefore, no impairment review has been
conducted in the current year.
The following subsidiaries in the UK have taken advantage of an exemption from audit
under section 479A of the Companies Act 2006. As the ultimate parent, McBride plc has
provided a statutory guarantee for any outstanding liabilities of these businesses. These
subsidiaries have been included in the consolidated financial statements of McBride plc as
at 30 June 2024.
• Robert McBride Ltd
• McBride Holdings Limited
A full list of the Company’s subsidiaries at 30 June 2024 is set out in note 15 on pages 179
and 180.
Details of the share-based payments provided by the Company to employees of its
subsidiaries are presented in note 23 to the consolidated financial statements.
6. Trade and other debtors
2024
£m
2023
£m
Amounts falling due within one year
Amounts owed by subsidiary undertakings 127.7 130.4
Derivative financial instruments 1.1 3.3
Deferred tax asset — —
Prepayments and accrued income 1.6 2.0
130.4 135.7
Amounts are unsecured and repayable on demand. Amounts owed by subsidiary
undertakings include a loan receivable of £99.8 million (2023: £89.3m) which is
non-interest bearing with no fixed repayment date and Group relief receivable of
£11.5million (2023: £11.5m). All remaining amounts owed by subsidiary undertakings
areinterest bearing, based on external borrowing interest rates.
2. Accounting policies continued
Critical judgements and key sources of estimation uncertainty continued
Impairment of investments and amounts owed by subsidiary undertakings
The Directors have performed an impairment assessment of investments under IAS
36. Inlight of the underlying value of the subsidiaries’ net assets, their profitability and
forecast profitability, the Directors have judged that no impairment is required (2023:
£nil). An impairment assessment of amounts owed by subsidiary undertakings as at
30June 2024 was undertaken. The Directors have judged that no impairment is required
(2023: £nil).
3. Profit for the financial year
As permitted by section 408(3) of the Act, the Company’s income statement or a
statement of comprehensive income are not presented in these financial statements.
The auditors’ remuneration for audit and other services is disclosed in note 6 of the
Group’s consolidated financial statements.
The Company’s profit for the financial year was £16.1 million (2023: loss of £21.6m).
4. Employee information
The monthly average of full-time equivalent Directors employed by the Company and
Non-Executive Directors during the year was as follows:
2024
Number
2023
Number
Directors 2 2
Non-Executive Directors 1 1
Total 3 3
Aggregate payroll costs were as follows:
2024
£m
2023
£m
Wages and salaries 2.8 2.2
Social security costs 0.1 0.1
Other pension costs 0.1 0.1
Total 3.0 2.4
Executive Directors’ emoluments, which are included in the above, are detailed further in
the Annual Report on Remuneration on pages 91 to 102.
177
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements continued
Year ended 30 June 2024
No payments to ordinary shareholders were made or proposed in respect of this year or
the prior year.
Furthermore, under the RCF the Company may not, except with the consent of its lender
group, redeem or repay any of its share capital prior to an exit event. Therefore, the
redemption of B Shares that would normally take place in November each year will not
take place.
Movements in the number of B Shares outstanding were as follows:
Number
000
Nominal
value
£’000
Issued and fully paid
At 1 July 2022, 30 June 2023 and 30 June 2024 665,888 666
B Shares carry no rights to attend, speak or vote at Company meetings, except on a
resolution relating to the winding up of the Company.
10. Provisions
2024
£m
2023
£m
At 1 July 0.1 1.7
Utilised in the year (3.9) (2.6)
Charge for the year 3.8 1.0
At 30 June — 0.1
The provision for consultancy support for the independent business review programme
was utilised in the year.
7. Creditors: amounts falling due within one year
2024
£m
2023
£m
Amounts owed to subsidiary undertakings 77.0 72.0
B Shares (note 9) 0.7 0.7
Accruals and deferred income 2.3 2.1
Financial derivatives — 1.5
Bank overdrafts 2.5 0.4
Total 82.5 76.7
Amounts owed to subsidiary undertakings include loans payable of £nil (2023: £37.0m)
which are non-interest bearing with no fixed repayment date. All remaining amounts
owedto subsidiary undertakings are interest bearing, based on external borrowing
interest rates.
8. Creditors: amounts falling due after more than one year
2024
£m
2023
£m
Bank and other loans 47.0 75.4
Deferred tax liability — 0.5
Total 47.0 75.9
Bank and other loans represent amounts drawn down under a €175 million RCF which is
committed until May 2026.
9. Payments to shareholders
Dividends paid and received are included in the Company financial statements in the
year in which the related dividends are actually paid or received or, in respect of the
Company’s final dividend for the year, approved by shareholders.
Under the terms of the amended RCF announced on 29 September 2022, the Company
may not, except with the consent of its lender group, declare, make or pay any dividend
or distribution to its shareholders prior to an ‘exit event’, being a change of control,
refinancing of the RCF in full, prepayment and cancellation of the RCF in full, or upon the
termination date of the RCF, being May 2026. Hence, the Board is not recommending a
final dividend for the financial year ended 30 June 2024.
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Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements continued
Year ended 30 June 2024
14. Related party transactions
Other than payments made to Directors, which are set out in the Remuneration
Committee Report on pages 83 to 102 and note 5 of the consolidated financial
statements, there are no other related party transactions to disclose (2023: none).
TheCompany has taken the exemption available under FRS 101 not to disclose
transactions with wholly owned subsidiary companies.
15. Subsidiaries
Details of the Company’s subsidiaries at 30 June 2024 are as follows. In each case, the
Company’s equity interest is in the form of ordinary shares which, unless stated otherwise,
are indirectly owned.
The business activity of each of the Company’s trading subsidiaries is the manufacture,
distribution and sale of household and personal care products.
Subsidiaries
Equity interest
and operation
Country of
incorporation
Trading subsidiaries
McBride Australia Pty Ltd
(a)
100% Australia
McBride S.A.
(b)
100% Belgium
McBride Denmark A/S
(c)
100% Denmark
Robert McBride Ltd
(d)
100% England
McBride S.A.S.
(e)
100% France
Vitherm France S.A.S.
(f)
100% France
Chemolux Germany GmbH
(g, h)
100% Germany
McBride Hong Kong Limited
(i)
100% Hong Kong
McBride S.p.A.
(j)
100% Italy
Chemolux S.a.r.l.
(k)
100% Luxembourg
McBride Malaysia Sdn. Bhd
(l)
100% Malaysia
McBride Nederlands B.V.
(m)
100% Netherlands
Intersilesia McBride Polska Sp. z o.o
(n)
100% Poland
McBride S.A.U.
(o)
100% Spain
Newlane Cosmetics Company Limited
(p)
100% Vietnam
Holding companies
McBride Holdings Limited
(1, d)
100% England
McBride Asia Holdings Limited
(i)
100% Hong Kong
McBride Hong Kong Holdings Limited
(i)
100% Hong Kong
Fortlab Holdings Sdn. Bhd.
(l)
100% Malaysia
Fortune Organics (F.E.) Sdn. Bhd.
(l)
100% Malaysia
CNL Holdings Sdn. Bhd.
(l)
100% Malaysia
11. Deferred tax
The elements and movements of deferred tax are as follows:
Share-based
payments
£m
Other
short-term
differences
£m
Total
£m
At 1 July 2022 0.1 (0.3) (0.2)
Credit to income statement 0.2 — 0.2
Charge to other comprehensive income — (0.4) (0.4)
Charge to equity (0.1) — (0.1)
At 30 June 2023 0.2 (0.7) (0.5)
Prior year adjustments — (0.1) (0.1)
Credit to income statement 0.4 (0.4) —
Charge to other comprehensive income — (0.5) (0.5)
Charge to equity 1.1 — 1.1
At 30 June 2024 1.7 (1.7) —
Deferred tax assets are recognised to the extent that recovery is probable against the
future reversal of taxable temporary differences and projected taxable income. Based
on the latest profit projections, management considers the deferred tax assets to be
recoverable.
12. Issued share capital
Authorised,
allotted and fully paid
Number £m
Ordinary shares of 10 pence each
At 1 July 2022, 30 June 2023 and 30 June 2024 174,057, 328 17.4
Ordinary shares carry full voting rights and ordinary shareholders are entitled to attend
Company meetings and to receive payments to shareholders.
At 30 June 2024, outstanding awards in relation to the equity-settled employee share
schemes that are operated by the Company comprised 14,324,067 ordinary shares
(2023: 12,231,923 ordinary shares). Further information on the employee share schemes
ispresented in note 23 to the consolidated financial statements.
13. Guarantees
The Company has guaranteed the indebtedness of certain of its subsidiaries up to an
aggregate amount of £0.2 million (2023: £0.2m).
179
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Strategic Report Governance Report Additional Information
Financial Statements
Notes to the Company Financial Statements continued
Year ended 30 June 2024
Registered offices:
(a) Level 4, 147 Collins Street, Melbourne, Victoria 3000, Australia.
(b) 6 Rue Moulin Masure, 7730 Estaimpuis, Belgium.
(c) Lægårdvej 90-94, 7500 Holstebro, Denmark.
(d) Middleton Way, Middleton, Manchester M24 4DP, UK.
(e) 20 rue Gustave Flaubert 14590 Moyaux, France.
(f) Rue des Casernes, 55400 Étain, France.
(g) Heinrichstrasse 73, 40239 Düsseldorf, Germany.
(h) On 4 September 2024, the name and registered address of this company changed to McBride GmbH,
Bundeskanzlerplatz 2D, D – 53113, Bonn, Germany.
(i) Unit 2001-02, 20th Floor, Prosperity Place, 6 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.
(j) Corso Garibaldi 49, 20121 Milan, Italy.
(k) Rue de I’industrie, Foetz, Luxembourg 3895.
(l) Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi,
59200 Kuala Lumpur, Malaysia.
(m) Schiphol Boulevard 359, 1118BJ Schiphol, Netherlands.
(n) Ul. Matejki 2a, 47100 Strzelce Opolskie, Poland.
(o) Polígon Industrial I’Ila, C/ Ramon Esteve 20-22, 08650 Sallent, Barcelona, Spain.
(p) 22 VSIP II, Street 1, Vietnam Singapore, Industrial Park II, Hoa Phu Ward, Thu Dau Mot City, Binh Duong
Province, Vietnam.
 
15. Subsidiaries continued
Subsidiaries
Equity interest
and operation
Country of
incorporation
Dormant
(2)
Breckland Mouldings Limited
(d)
100% England
Camille Simon Holdings Limited
(d)
100% England
Camille Simon Limited
(d)
100% England
Culmstock Limited
(d)
100% England
Darcy Bolton Limited
(d)
100% England
Darcy Bolton Property Limited
(d)
100% England
Darcy Limited
(d)
100% England
Detergent Information Limited
(d)
100% England
G.Garnett & Sons Limited
(d)
100% England
G.Garnett Estates Limited
(d)
100% England
Globol Properties (UK) Limited
(d)
100% England
H.H. Limited
(d)
100% England
HomePride Limited
(d)
100% England
Hugo Personal Care Limited
(d)
100% England
International Consumer Products Limited
(d)
100% England
Longthorne Laboratories Limited
(d)
100% England
McBride Aircare Limited
(d)
100% England
McBride UK Limited
(d)
100% England
McBrides Limited
(d)
100% England
Milstock Limited
(d)
100% England
RMG (Droylsden) Limited
(d)
100% England
Robert McBride (Aerosols) Limited
(d)
100% England
Robert McBride (Bradford) Limited
(d)
100% England
Robert McBride (Properties) Limited
(d)
100% England
Robert McBride Household Limited
(d)
100% England
Savident Limited
(d)
100% England
Other
Robert McBride Pension Fund Trustees Limited
(d)
100% England
(1) McBride plc directly owns 100% of McBride Holdings Limited.
(2) Dormant companies listed here are exempt from preparing individual accounts under s394A, exempt
from filing individual accounts with the registrar under s448A and exempt from audit under s479A of the
Companies Act 2006.
180
McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Year ended 30 June
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
Revenue 934.8 889.0 678.3 682.3 706.2
Adjusted operating profit/(loss) 67.1 13.5 (24.5) 24.1 28.3
Amortisation of intangible assets (2.0) (2.4) (2.6) (2.4) (2.1)
Exceptional items (0.8) (0.8) — (6.9) (11.1)
Operating profit/(loss) 64.3 10.3 (27.1) 14.8 15.1
Finance costs (17. 8) (25.4) (8.6) (4. 2) (4. 2)
Profit/(loss) before taxation 46.5 (15.1) (35.7) 10.6 10.9
Taxation (13.2) 3.6 11.4 2.8 (4.4)
Profit/(loss) after taxation 33.3 (11.5) (24.3) 13.4 6.5
Earnings/(loss) per share
Diluted 18.8p (6.6)p (14.0)p 7.5p 3.6p
Adjusted diluted 21.7p 0.0p (11.7)p 11.7p 9.5p
Payments to shareholders (per ordinary share) — — — — 1.1p
At 30 June
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
Non-current assets
Property, plant and equipment 114.4 117.8 122.9 129.8 134.7
Goodwill and other intangible assets 29.5 26.2 27.0 27.9 28.4
Other assets 52.6 54.6 42.9 32.9 21.1
196.5 198.6 192.8 190.6 184.2
Current assets 280.1 271.7 273.3 241.2 287.6
Current liabilities (306.1) (283.6) (280.0) (233.5) (253.9)
Non-current liabilities (107.1) (149.6) (129.1) (128.5) (151.0)
Net assets 63.4 37.1 57.0 69.8 66.9
Net debt 131.5 166.5 164.4 118.4 101.5
Group Five-Year Summary
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McBride plc Annual Report and Accounts 2024
Strategic Report Governance Report Additional Information
Financial Statements
Shareholder Information
Financial calendar
Next key dates for shareholders in 2024 and 2025:
Record date for dividend payable on B Shares previously
issued and not redeemed
18 October 2024
Annual General Meeting 12 November 2024
Dividend payments on B Shares issued and not
previouslyredeemed
29 November 2024
2025 Half year end 31 December 2024
2025 Half-year trading statement 17 January 2025
2025 Interim results announcement 25 February 2025
2025 Year end 30 June 2025
2025 Year-end trading statement 17 July 2025
2025 Preliminary results announcement 16 September 2025
These dates are provisional and may be subject to change.
Payments to shareholders
At the Company’s 2011 General Meeting, shareholders approved the issue of
non-cumulative redeemable preference shares with a nominal value of 0.1 pence each
(‘theB Shares’) as a method of making payments to shareholders. At the Company’s
2021 AGM, the Company did not put forward a resolution to approve the issue of
non-cumulative redeemable preference shares. It is the Board’s intention that any future
dividends will be final dividends paid annually in cash, not by the allotment and issue of
BShares. Under the terms of the amended RCF announced on 29 September 2022, the
Company may not, except with the consent of its lender group, declare, make or pay
any dividend or distribution to its shareholders prior to an ‘exit event’, being a change
of control, refinancing of the RCF in full, prepayment and cancellation of the RCF in
full, or upon the termination date of the RCF, being May 2026. Hence the Board is not
recommending a final dividend for the financial year ended 30 June 2024.
In accordance with the terms of the B Shares scheme, any B Shares may be redeemed
immediately for cash and such a redemption would result in a payment to the redeeming
shareholder. Shareholders are able to redeem any number of their B Shares for cash. B
Shares that are retained by the holder attract a dividend which is currently 75% of Bank
of England Base Rate on the 0.1 pence nominal value of each share, paid on a twice-yearly
basis. As announced on 29 September 2022, under the Company’s €175 million RCF as
amended, the Company is not permitted to redeem or repay any of its share capital.
This restriction remains in place until either the current RCF matures in May 2026 or it is
superseded by a new financing agreement. As a result, no redemption of existing B Shares
is permitted at the present time. Once this restriction is lifted, B Shares will continue to be
redeemable but limited to one redemption date per annum, in November of each year.
Further details on B Shares can be found in the booklet entitled ‘Your Guide to B Shares’
on the Company’s website at www.mcbride.co.uk.
Shareholders who have valid mandate instructions in place may choose to have payments
made directly into their bank or building society account. Confirmation of payment is
contained in a payment advice which is posted to shareholders’ registered addresses at
the time of payment. This payment advice should be kept safely for future reference.
Shareholders who wish to benefit from this service should complete the relevant section
of the election form accompanying the Notice of Annual General Meeting. Alternatively,
the required documentation can be obtained by contacting the Company’s registrar using
one of the methods outlined below.
Shareholder queries
Our share register is managed by Link Group, who can be contacted:
by telephone +44 (0)371 664 0300. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open
between 09:00 and 17:30, Monday to Friday (excluding public
holidays in England and Wales).
by email shareholderenquiries@linkgroup.co.uk
by post Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL
When writing, please indicate that you are a McBride plc shareholder.
Shareholders are also able to access and amend details of their shareholding
(suchasaddress and distribution payment instructions), via the registrar’s website at
www.signalshares.com. If you have not previously registered to use this facility you
willneed your investor code, which can be found on your share certificate issued by
LinkGroup.
ShareGift
McBride supports ShareGift, the share donation charity (registered charity no. 1052686).
ShareGift was set up so that shareholders who have only a very small number of shares
which might be considered uneconomic to sell are able to dispose of them by donating
them for the benefit of UK charities. Donating shares to charity gives rise neither to a
gain nor a loss for UK capital gains purposes and UK taxpayers may also be able to claim
income tax relief on the value of the donation. Even if the share certificate has been lost
or destroyed, the gift can be completed.
Further information about donating shares to ShareGift is available either from its website
at www.sharegift.org or by contacting them on +44 (0)20 7930 3737.
182
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Strategic Report Governance Report
Additional InformationFinancial Statements
Shareholder Information continued
Online shareholder services
McBride’s provides a number of services online in the investor relations section of its
website at www.mcbride.co.uk, including:
• view and/or download Annual and Interim Reports;
• check current or historical share prices (there is an historical share price download
facility);
• check the amounts and dates of historical payments to shareholders;
• use interactive tools to calculate the value of shareholdings and chart McBride ordinary
share price changes against indices; and
• register to receive email alerts regarding press releases, including regulatory news
announcements, Annual Reports and Company presentations.
Cautionary statement
This Annual Report has been prepared for the shareholders of McBride, as a body, and
no other persons. Its purpose is to assist shareholders of the Company to assess the
strategies adopted by the Group, the potential for those strategies to succeed and for no
other purpose. The Company, its Directors, employees, agents or advisers do not accept
or assume responsibility to any other person to whom this document is shown or into
whose hands it may come, and any such responsibility or liability is expressly disclaimed.
This Annual Report contains certain forward-looking statements that are subject to risk
factors associated with, amongst other things, the economic and business circumstances
occurring from time to time in the countries, sectors and markets in which the Group
operates. It is believed that the expectations reflected in these statements are reasonable,
but they may be affected by a wide range of variables which could cause actual results to
differ materially from those currently anticipated.
No assurances can be given that the forward-looking statements in this Annual Report
will be realised. The forward-looking statements reflect the knowledge and information
available at the date of preparation of the Annual Report and the Company undertakes
no obligation to update these forward-looking statements. Nothing in this Annual Report
shall constitute a profit forecast.
Both the Strategic Report and the Directors’ Report have been prepared and presented
in accordance with the laws of England and Wales and the liabilities of the Directors in
connection with those reports shall be subject to the limitations and restrictions provided
by such law. In particular, the Directors would be liable to the Company (but not to any
third party) if the Strategic Report and/or Directors’ Report contain errors as a result of
recklessness or knowing misstatement or dishonest concealment of a material fact but
would not otherwise be liable.
Share price history
The following table sets out, for the five financial years to 30 June 2024, the reported
high, low, average and financial year end (30 June 2024 or immediately preceding
business day) closing middle market quotations of McBride plc’s ordinary shares on the
London Stock Exchange.
Share price (pence)
High Low Average
Financial
year end
2020 89 49 66 62
2021 94 58 74 91
2022 89 16 58 16
2023 33 16 24 26
2024 143 25 73 139
Shareholder security
The Company is required by law to make its share register publicly available. As a
consequence, shareholders may receive unsolicited mail from organisations that use
it as a mailing list. Shareholders wishing to limit the amount of such mail should either
write to Mailing Preference Service, DMA House, 70 Margaret Street, London W1W 8SS,
register online at www.mpsonline.org.uk or call the Mailing Preference Service (MPS)
on 02072913310. MPS is an independent organisation which offers a free service to
thepublic.
Each year in the UK shareholders lose money due to investment fraud. Investment
scamsare becoming ever more sophisticated – designed to look like genuine investments,
they are increasingly difficult to spot. REMEMBER, if it sounds too good to be true, it
probably is!
If you suspect you have been approached by fraudsters, please tell the Financial Conduct
Authority using the share fraud reporting form at www.fca.org.uk/scams, where you can
find out more about investment scams. You can also call the FCA Consumer Helpline
on 0800 111 6768. If you have lost money to investment fraud, you should report it to
ActionFraud on 0300 123 2040 or online at www.actionfraud.police.uk. Find out more at
www.fca.org.uk/scamsmart.
Electronic communications
Shareholders are able to register to receive communications from McBride electronically.
McBride encourages shareholders to elect to receive all communications electronically,
toenable more secure and prompt communication which reduces cost and environmental
impact through saving paper, mailing and transportation.
You can register directly by visiting www.signalshares.com and following the online
instructions. Alternatively, you can access the service via the investor relations section of
McBride’s website at www.mcbride.co.uk.
183
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Strategic Report Governance Report
Additional InformationFinancial Statements
Registered Office and Advisers
Company’s registered office
McBride plc
Middleton Way
Middleton
Manchester M24 4DP
www.mcbride.co.uk
Company number: 02798634
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and
StatutoryAuditors
1 Hardman Square
Manchester M3 3EB
Corporate brokers
Investec plc
30 Gresham Street
London EC2V 7QP
Peel Hunt LLP
7th Floor, 100 Liverpool Street
London EC2M 2AT
Financial advisers
N. M. Rothschild & Sons Limited
New Court, St Swithin’s Lane
London EC4N 8AL
Principal bankers
HSBC Bank plc
2nd Floor
Landmark
St Peter’s Square
1 Oxford Street
Manchester M1 4BP
BayernLB
Moor House
120 London Wall
London EC2Y 5ET
BNP Paribas London Branch
10 Harewood Avenue
London NW1 6AA
KBC Bank N.V.
111 Old Broad Street
London EC2N 1BR
Bank of China, London Branch
1 Lothbury
London EC2R 7DB
BBVA London Branch
Floor 44
1 Canada Square
London E14 5AA
Registrars
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Financial public relations advisers
Instinctif Partners Limited
65 Gresham Street
London EC2V 7NQ
184
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Strategic Report Governance Report
Additional InformationFinancial Statements
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McBride plcAnnual Report and Accounts 2024