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Good news, bad news

Emma Mountford and Chris Jones
11/ 9/2008

SHAMPOO to mouthwash maker McBride plans to axe around 60 jobs in Middleton after 'unprecedented' raw material cost hikes hit profits.

The private label household goods firm, which also supplies cleaning products, fabric conditioner, dishwasher tablets, soap, toothpaste, air fresheners and deodorant to retailers, has been hit by soaring oil prices.

Chief executive Miles Roberts has announced plans to cut one in 10 of its UK workforce across five sites with a total 250 people set to lose their jobs.

Around 60 posts will go at Middleton, where McBride has its UK headquarters and major factory. The site currently employs 600 people. Fifty jobs are also to be axed at its site in Warrington where 100 people are employed.

The other jobs will go in Burnley, Barrow and Coventry. McBride is scaling back at Warrington and shutting its Coventry base to move to a new £20M site in St Helens.

McBride hopes to save £1M a year in overheads through the shake-up, although it will incur one-off costs this year of £2M associated with the redundancies.

Mr Roberts said the move was a response to tumbling profits in McBride's UK business - down from £24.3M to £14.7M during the year to 30 June despite a rise in revenues, from £274.5M to £292.5M. As well as battling rising costs, McBride's retail customers were unwilling to absorb price increases, which hit profits.

Mr Roberts said the company had little option but to cut jobs while continuing to invest in product development and equipment. He added that the redundancies were 'extremely regrettable'.

Underlying group pre-tax profits fell 38 per cent to £19.7M although revenues rose 18 per cent to £700.9M.

A final dividend of 3.9p makes a total of 5.6p for the year, the same as in 2007.

Anxieties about the outlook for McBride sent shares 3.64 per cent lower to 106p.

But Mr Roberts said he was confident over this year's prospects as McBride drives further savings and hard-pressed shoppers trade down.

"Our products deliver outstanding value and quality to consumers across Europe and have never been more relevant than in the current environment where disposable incomes are under significant pressure."

Supermarket move

A NEGLECTED area of Middleton town centre is set to be transformed as part of a new £11M retail development.

Discount supermarket Aldi and Kirkland developments have announced plans for a new store and non-food retail outlet on the Parkfield Industrial Estate site on Kemp Street.

Under the proposals, which will need to be approved by planners, the existing row of industrial units would be demolished to make way for a flagship 16,715 sq ft Aldi store and separate 23,000 sq ft retail unit.

It comes as preliminary work on the town's other new retail development, the new Tesco supermarket, gets underway in Middleton Gardens.

Middleton south ward councillor, Teresa Fitzsimons, who has taken part in extensive consultation with local residents and planning consultants who are acting on behalf of Aldi and Kirkland, said it could help transform the town centre.

She said: "This is going to be very beneficial for Middleton. We've been discussing this with the developers and local residents for about 12 months now, and we've managed to finalise plans that will be very equitable for the town.

"Initially they wanted to build a fast food outlet right next to houses Sunny Brow Road, but that's been removed from the plans after we raised our concerns, and the final plans, along with everything else that's happening in the town and some possible lottery funding developments will be very beneficial."

Aldi UK is currently based in Middleton on the Stakehill Industrial estate, and it's understood they will use the new store as it's showpiece British supermarket.

The development is expected to secure jobs at the current Aldi branch on Wood street, with the total number employed at the site expected to be close to 55. It comes as one of the town's biggest employers, McBride's, announced it was slashing its Middleton work force by ten per cent in the face of the rising cost of raw materials.

John Ford, chairman of the Archer Park Residents Association, said the development would help improve the local area.

He said: "We are quite happy to see it developed because it is a bit of an eye sore at the minute. There is quite a lot of rubbish there at the minute from the businesses that are there now.

"The plans show there will be plenty of parking spaces, fencing round the site, gates and lighting that will be on in the evening. The development will improve what is not a very pleasant site."

A planning application is expected to be submitted to Rochdale Council's planning department in the coming days detailing the proposals, with Middleton Township Planning Subcommittee expected to rule over the proposals before the end of the year.

The scheme's backers hope the store and retail unit will open in 2010.

The current Aldi store in the town is expected to be retained by the supermarket to be leased out as a non-food outlet.