Re Joint Venture

McBride PLC 7 June 2002 07 June 2002 Embargoed for 0700 McBride plc Satisfaction of Nichol put option and trading update McBride plc ('McBride'), Europe's leading supplier of household and personal care retailer brand products, announces settlement of the put option and a financial restructuring of its aerosol products joint venture Aerosol Products Limited ('APL') in which Robert McBride Limited ('RMB'), McBride's UK subsidiary, will continue to have a 50 per cent. equity interest. In October 1999 RMB and Nichol Beauty Products Ltd ('Nichol') formed APL, comprising the Hull-based aerosol activities of RMB together with the aerosol activities of Nichol. Since October 2001, Nichol has had the option to exercise a 'put' on RMB of its 50 per cent. equity shareholding for £12m in cash. The settlement involves a £12m payment by RMB to Nichol in compliance with its obligations under the 'put' and the acquisition of Nichol's 50 per cent. equity shareholding in APL. RMB's existing 50 per cent. equity shareholding in APL is transferred to The Royal Bank of Scotland plc and Credit Agricole Indosuez (the two lending banks to APL) (the 'Lending Banks') for a nominal value of £50 in cash. In addition, RMB will subscribe in cash for £4m of preference shares in APL. The Lending Banks have agreed to convert APL's remaining £11m of bank debt into preference shares to leave APL in a debt free position. APL is in the process of implementing an operational restructuring plan which will result in a significant reduction to its cost base and improved capacity utilisation. The Directors of McBride expect that APL should, after completion of the restructuring, provide a positive contribution to group profitability and cashflow. As reported in the Interim Statement on 15 February 2002, there will be a substantial goodwill write off connected with this settlement. All existing goodwill relating to RMB's investment in APL, together with that arising on this transaction, will be written off at a cost of £16m. In the year ended 30 June 2001, APL had net liabilities of £4.8m and made a net loss of £11.3m. Trading in McBride's core household and personal care businesses continues to improve. Profit and cash generation, excluding the above APL settlement, during the second half of the year are both ahead of the first half and in line with market expectations. This has been aided by continued sales growth in Continental Europe combined with tight cost control throughout the group. The group currently sees opportunities to maintain sales progress and improve margins as well as cash generation Mike Handley, McBride's Chief Executive, commented: 'This transaction removes the uncertainty created by Nichol's put option which has been overhanging McBride for the last couple of years and puts APL on a firm financial footing. We can now concentrate on maintaining the development of our core household and personal care businesses in the UK, Continental Europe and Poland.' For further information please contact: McBride plc Mike Handley Chief Executive Miles Roberts Finance Director 01494 607050 Financial Dynamics Andrew Dowler/Fiona Meiklejohn 020 7831 3113 This information is provided by RNS The company news service from the London Stock Exchange


Mcbride (MCB)
UK 100

Latest directors dealings