Brands positioned for sustainable growth
A strong performance from the group’s largest brand, Beldray, further growth in the online and supermarket channels, and the ability to offset increased Chinese shipping rates were key features of UP Global Sourcing’s FY2021 trading statement. Moreover, the company’s financial position continues to improve with both broadly expected year end net debt and ample facilities headroom. We raise both our sales and profit forecasts in this report.The valuation of UPGS remains undemanding. Based on our revised estimates, UPGS trades on a 0.9x EV/sales ratio and its shares on a 13.4x prospective P/E ratio. Moreover, given the company’s growth credentials, a 3.8% yield looks attractive. We continue to argue at this stage of growth for a current fair value of at least 150p / share, which is 11% above their current level.
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