EBITDA margin sustains profit growth
UPGS reconfirmed FY2020 profit guidance in a trading statement released today.While FY2020 sales guidance has been reduced, adjusted EBITDA margins will be slightly higher at 8.1% compared with 7.9% envisaged previously.
Group banking facilities, that gave £13.2m headroom at end-January were extended until 2024.
With the majority of its manufactured product sourced from China, UPGS’s Board is closely monitoring coronavirus developments and highlights that the extension to the Chinese New Year holiday of 9 days will cause production delays. That said, the company will take necessary steps to mitigate any disruption and highlights its extensive experience of managing supply chain disruptions in China, including virus related ones.
UPGS’s trading proved more resilient than a number of UK consumer-facing companies in recent months. As a result, we continue to argue for a 100p share price, which would imply 9.6x FY2020 EV/EBITDA and an 11.8x P/E ratio.
Gear4music (Holdings) is an e-commerce retailer of musical instruments and music equipment. The products are sourced from over 710 manufacturers, and range from kazoos to digital pianos, drum kits and guitars.
Warpaint London is focused on color cosmetics, which it separates into four categories: Face make-up: foundation, blushers, illuminators, and powders and loose and pressed powders; Eye make-up: eye shadows, eyeliners, eyebrow pencils and mascara; Lip make-up: lipstick and glosses, lip pencils, lip plumpers and palettes; and Nail make-up: nail varnishes, polishes, hardeners and strengtheners, base and top coat. Co. consists of two separate divisions, own-brand, which its W7 brand sells to street retailers, beauty shops, and online sales channel; and close-out, which representing its business, buys and sells close-out and excess stock of branded cosmetics and fragrances from around the world.
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