reports
- Chris Wickham
European growth prospects rise in importance
Ultimate Products released FY2024 results which confirmed the company’s August trading statement at the sales, EBITDA pre-tax profits and EPS levels. Detailed figures for sales by geographic region, brand, distribution channel and product category were published. Importantly, European sales advanced by 7%, moving to 34% of group sales from 30% in FY2023 as the company made significant advances with French and German discounters. This offset the negative impact of overstocking in the latter’s s...
- Chris Wickham
New Board appointments support growth potential
Strong relations with UK retailers and the potential to build on European expansion are important components of the value proposition and growth case for Ultimate Products plc. The owner of the Beldray and Salter brands today announced two important Board appointments that are consistent with those objectives. As a brand manager with clearly prioritised distribution channels, we retain our 200p Fair Value for UP’s shares. UP is to appoint two new Non-Executive Directors, both of which have per...
- Chris Wickham
Sales growth still expected to resume in FY2025
Ultimate Products – owner of the Beldray and Salter brands - released a trading statement today which was in line with market expectations at both the sales and EBITDA level. After a down year in FY2024, sales growth is expected to resume in FY2025. We make modest changes to our FY2025 forecasts in this report but retain our 200p Fair Value for the shares. As expected, sales revenue fell in FY2024, by 6% to £155.5m compared with our own £157.4m forecast. Sales performance was constrained by su...
- Chris Wickham
Beldray re-brand – Ultimate Products has “got this!”
Ultimate Products hosted a Capital Markets presentation at the Exclusively Housewares Exhibition in London on Tuesday this week, where the company showcased its re-brand for Beldray®, having engaged in a similar process for Salter at the same event in 2023. Regarding trading, despite some sales and profit disruption so far in FY2024, we continue to expect above trend organic growth in FY2025. We retain our 200p fair value for the shares. UP’s Brand Director Tracy Carroll presented key features ...
- Chris Wickham
Near term disruption, but growth case remains strong
Ultimate Products announces today that sales revenue fell by 7% in its FY2024 third quarter and is anticipated to remain in negative territory in Q4. As a result, the company believes that EBITDA will now be in the range of £17.5m to £18.5m compared with a current market consensus figure of £21.5m. Given the 17% cut in current year EBITDA expectations it seems prudent to adjust our fair value / share figure by a similar amount. So, we reduce it by 20% from 250p to 200p. However, current sales s...
- Chris Wickham
Balancing sales growth with cash flow generation - Interim Results
Stable profits (EBITDA) and a marked reduction in bank debt were key features of Ultimate Products’ (‘UP’) interim results, released today. The company also announced its intention to buy back up to 10% of its shares. FY2024 full year results are expected to match current market expectations. With revenue expansion likely to resume in H2 2024, and continue into FY2025, we argue that UP is more than capable of generating sales growth and free cash flow simultaneously. Underlying 6% sales growt...
- Chris Wickham
Cash generation drives shareholder value
Ultimate Products’ (UP) sales fell by 4% in the first six months of FY2024, with the likelihood of a broadly flat full year. But the company’s FY2024 profit expectations - and our own EBITDA forecasts - remain unchanged as improved gross margins should offset lower sales. UP’s first half sales setback was caused by 3 important temporary effects. First, the company lapped an unusually strong period a year earlier when demand for air fryers was at a peak. Second, supermarket overstocking has take...
- Chris Wickham
Ultimate quality and value for customers
Strong sales growth, sustained profit margins and abundant free cash flow were key features of UP’s FY2023 financial results. Moreover, the company combined significant advances with its brand portfolio with operational efficiency improvements, both in the UK and internationally. The results confirmed the Company’s 15th August trading update, as sales advanced 8% and the EBITDA and pretax profit measures were £20.2m (+8%) and £16.8m (+6%) respectively. Net bank debt closed the year at £14.8m c...
- Chris Wickham
Beautiful products for every European home
UPGS today announced the opening of a new showroom in Paris, which will facilitate the expansion of its leading homeware brands not only into France but continental Europe overall. Furthermore, as demonstrated with Petra in Germany, stronger sales and an elevated business profile expands the scope to make growth-oriented acquisitions in the region. We continue to place a fair value of 250p for UPGS’s shares, which in our view is reasonable given it implies 1.3x sales and 11x EV/EBITDA based on...
- Chris Wickham
Second half 15% sales growth beats expectations
UPGS comfortably beat full year FY2023 expectations for sales revenue in a trading update released today, as H2 sales accelerated sharply to show 15% growth compared with 2% in the first half of the year. Importantly, this growth was achieved despite no overall price inflation as the group sought to sell its branded homeware products at prices that would be affordable to consumers. In our view, the ability of a consumer goods company to generate sales volume growth in the relatively mature econo...
- Chris Wickham
Debt reduction confirms financial strength
UPGS announced a significantly better-than-expected improvement in its debt position today. Net FY23 year-end bank borrowings are expected be in the region of £15m compared with current market expectations of closer to £21m. The financial benefits of lower net debt in the current climate of rising interest rates are clear. UPGS’s cash generation capabilities not only underpin its generous dividend policy (50% of net profits) but also enhance strategic flexibility. The company is not only able t...
- Chris Wickham
Innovating for growth
UPGS hosted a capital markets presentation at the Exclusively Homewares exhibition in London’s Business Design Centre yesterday to discuss the upcoming re-brand of Salter as part of its overall brand rejuvenation programme. Having confirmed its expectations for FY2023 financial performance in a statement the previous week, prospects for a strong second half to the year remain in place. UPGS’s belief that it will match market expectations in FY2023 is important. With an end-July year-end the co...
- Chris Wickham
Well placed for sales growth acceleration in H2
UPGS’s interim results strongly suggest that the company is well placed for sales growth acceleration in H2 and to meet current market expectations. Online sales in H1 increased by 78% to represent 26% of group total, which is positive as this distribution channel has a smaller skew to H1 than others. Moreover, UPGS’s brands continue to demonstrate an ability to gain market share and grow through volume rather than pricing. We maintain our view that the company’s current valuation does not fai...
- Chris Wickham
UPGS: Online drives first half growth
UPGS’s 2% sales growth benefited from a strong online performance, moving them closer to their 30% target of total revenue for the online channel. Areas of product strength included energy efficient and money saving items, which were cited as being buoyant across all distribution channels (i.e., discount retailers, multiple store retailers, online and supermarkets). The trading backdrop showed signs of improvement in the first half of FY2023. UPGS highlighted a normalisation of global supply ...
- Chris Wickham
Brands and resilience driving growth in FY2023
Strong progress for the key brands Beldray and Salter plus significant advances in supermarkets and online coincided with increased margins across-the-board and an improvement in UPGS’s net debt/EBITDA position in FY2022. Moreover, the company anticipates that the market’s profit expectations for FY2023 will be met. Strong sales growth in supermarkets and international sales were confirmed by today’s data which reported increases of 38% (25% excluding Salter) and 22% respectively. Online sales...
- Chris Wickham
Russell Hobbs – improved brand visibility for UPGS
UPGS today announced an important step forward in its licensing agreement for the Russell Hobbs brand as it moved from its previous fixed term arrangement to a rolling four-year basis. The move stands to increase certainty around the brand and justify increased investment behind it. Since mid-2021 all other brands in the portfolio have been wholly owned, which augurs well for both predictability and valuation. We reiterate our 250p per share fair value. The change from fixed term licence arran...
UP Global Sourcing Holdings: 2 directors
Two Directors at UP Global Sourcing Holdings bought 165,000 shares at 120p. The significance rating of the trade was 51/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two yea...
- Chris Wickham
UPGS - record sales and profits in FY2022
A 13% increase in net sales revenue to a record £154.2m, a 41% increase in EBITDA to £18.8m (also a record) and an underlying 1.3x net debt/EBITDA ratio were notable features of a pre-close trading update released by UPGS today. Moreover, FY2023 appears to have started well. With strong momentum in both reported sales and profits, as well as significant tangible progress within group operations, we maintain our fair value assessment of 250p per share. The current share price fails to reflect th...
- Chris Wickham
UPGS: Reinforcing the online offering
UPGS today announces two important steps forward in relation to the company’s direct to consumer and online offering. UPGS has purchased the Salter.com domain name for Salter measuring devices and will soon complete an overhaul of the Beldray.com web portal. Arguably, both steps will help the company to achieve its objective of transacting 30% of sales online. The company's shares continue to trade in line with its peer group’s average on both EV/sales and EV/EBITDA. However, there are clear d...
- Chris Wickham
Shareholder value creation at its core
UPGS’s interim FY2022 results show a company that is creating shareholder value through its core activities. Sustainable sales growth, higher margins, positive cash flow and a 50% dividend pay-out should combine to generate earnings accretion and multiple expansion. UPGS is a brand-driven, international business, which is reinvesting in its operating practices. In our view, the share price does not reflect this and clearly lags our revised 250p fair value. At 250p, UPGS would trade on an EV/sal...
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