UPDATE 1-McBride sees tough outlook, buys Czech business

* Year adjusted op profit 50 mln stg, meets forecasts

* Faces rising raw material costs, weak retail markets

* Buys 70 pct of Czech skincare firm Dermacol for 8 mln stg

* Trading since year-end as expected; dividend up 13 pct

(Adds detail, background)

LONDON, Sept 2 (Reuters) - McBride (MCB.L), Europe's biggest maker of retailer own-brand household and personal care goods, said it faced rising raw material costs and weak retail markets as it met forecasts with a 38 percent rise in annual profit.

However the British-based group, which warned about a tough outlook in June, said on Thursday it was better placed to cope with challenging conditions than in the past and that trading since its financial year-end was in line with its expectations.

It also said it had agreed to buy an initial 70 percent interest in Dermacol, a privately owned, Czech-based manufacturer of skincare products for an expected 8 million pounds ($12.3 million). It will buy the rest in 2017.

McBride, which is looking to expand into faster-growing emerging markets and higher-margin personal care products, said it made an adjusted operating profit of 50 million pounds in the year ended June 30, in line with the average forecast of analysts' estimates in a poll by Thomson Reuters I/B/E/S.

The full-year dividend was lifted 13 percent to 6.8 pence a share, while net debt was cut 22.4 million pounds to 60 million.

"Although weak retail markets and raw material inflation will remain challenging in the short term, our balance sheet remains strong," Chief Executive Chris Bull said.

"McBride is better placed than previously to manage raw material cost inflation," he added, while noting "some evidence" that promoting by branded manufacturers was starting to ease.

McBride shares have lost 22 percent of their value since the June warning on worsening trading conditions. They closed at 141 pence on Wednesday, valuing the business at 250 million pounds. ($1=.6497 Pound) (Reporting by Mark Potter; Editing by Erica Billingham)