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Cleaning products maker McBride warns of H1 loss as costs soar

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(Reuters) -Cleaning products maker McBride warned on Tuesday that it expects to make a loss in the six months to December and said it was raising prices again as it deals with global supply chain snarl ups and a shortage of lorry drivers in the UK.

The company, which makes and distributes brands including Oven Pride and Surcare, forecast a 10 million pound loss before interest, taxes, depreciation and amortisation for the first half of its current fiscal year, compared with an adjusted operating profit of 19 million pounds in the year earlier period.

Its shares fell as much as 14% in early trade before recovering ground to stand 5% lower at 65.2 pence at 0852 GMT.

British companies, from restaurant chains and pub operators to dairy and meat producers, have been grappling with staff shortages and higher costs due to disruptions linked to Brexit and the coronavirus pandemic.

McBride said raw material and packaging costs have risen faster and to a higher level than previously expected while the shortage of haulage capacity and higher fuel expenses have inflated distribution costs and show no sign of abating in the near term.

Peel Hunt analysts said McBride was already facing about 30 million pounds of annualised cost increases, which it predicts have now more than doubled to 70 million pounds.

McBride said its was unable to provide an update to its earnings outlook for fiscal 2022 given the unpredictability of the global supply chain and ongoing uncertainty over input costs.

It said it was seeking substantial price increases from all its customers for the second time in two months, which could result in mid to high-teen percentage increases.

While some customers have resisted, the pace and scale of the current increase in costs means higher prices are no longer optional and competitors are likely to follow, Peel Hunt said.

(Reporting by Chris Peters and Muvija M in Bengaluru; Editing by Anil D'Silva, Krishna Chandra Eluri, Kirsten Donovan)

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