Beldray leads the way
Beldray’s strong performance and better than expected online and supermarket sales were the salient features of UPGS’s latest unscheduled trading statement. With continuing momentum in the order book and increasing resilience due to balanced distribution across its trading channels, we upgrade our full year FY2021 forecasts and argue that, at the current price of 98p, the shares would have to rise a full 50% to reach our 150p fair value.UPGS anticipates that underlying EBITDA in FY2021 will be above the market’s current expectations, a stance supported by a strong order book, its relentless focus on productivity enhancements, and increased operating efficiencies. The company is achieving a more even distribution balance across its key routes to market as its brands continue to make headway in engaging with end-customers.
Today’s revenue and earnings upgrade makes UPGS’s valuation look even more attractive. Our 150p fair value for the shares would put EV/sales on 1.0x, EV/EBITDA 10.7x and the P/E ratio 15.6x. The ratios they currently sit at don’t reflect a fair value for a business which has repeatedly upgraded numbers and has the proven execution capabilities to continue to deliver.
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