On track to scale new revenue heights
UPGS’s achievement of 13.7% revenue growth in the first half of FY2022 and anticipation of full year growth in line with current expectations implies close to a 20% advance in sales revenue this financial year. Moreover, growth sustainability should be supported by a combination of effective brand management and enlarged distribution capacity. The company should also be credited with its ability to record steady revenue growth despite supply chain headwinds. There is now cautious optimism that the worst is behind the Group.We retain our fair value of 275p per share for UPGS. Were the shares at this level, EV/sales would expand to 1.6x and EV/EBITDA to 14.0x - representing a premium to the company’s peer group. But such premiums are justified, in our view, by the demonstrable effectiveness of UPGS's leading brands, notably in the supermarket and online channels.
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