McBride Plc, the maker own label products for retailers, said interim pretax profits dropped 31 percent amid rising raw materials costs and a weak retail environment, particularly in the UK.

Looking ahead, the company said raw material price volatility and a weak retail environment are the key challenges for its business, particularly in the short term.

The company warned that material costs could increase by around 7 million pounds in the second half as the most recent market commodity price increases feed into its material costs.

For the half year ended Dec. 31, pretax profit fell to 15.5 million pounds from 22.5 million pounds, while revenue declined to 407.9 million pounds ($657 million) from 412.4 million.

The UK market has been characterised by a weak retail environment with subdued demand and branded promotional activity affecting some categories, it said.

The company estimates an exceptional charge of 20 million pounds in the current financial year following its strategic review.

McBride produces brands, such as Oven Pride, Limelite, Surcare, Sensei, Frish Stick and Gentelle and also provides contract manufacturing for other brand owners.

Shares of the company plunged 8.3 percent to 135.90 pence at 09:18 am GMT Tuesday on the London Stock Exchange.