REG - Ultimate Products - H1 2025 Trading Update and Notice of Results

Ultimate ProductsAnnouncement

03/02/2025 07:00

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RNS Number : 5501V  Ultimate Products PLC  03 February 2025

03 February 2025

 

Ultimate Products plc

"Ultimate Products" or "the Group"

 

H1 2025 TRADING UPDATE AND NOTICE OF RESULTS

H1 performance impacted by challenging market conditions, albeit trading
improved in Q2 - with cautiously encouraging momentum going into H2

Ultimate Products, the owner of a number of leading homeware brands including
Salter (the UK's oldest houseware brand, est.1760) and Beldray (est.1872),
announces its trading update for the six months ended 31 January 2025 ("H1
2025").

Overview

During the period, unaudited Group revenues decreased 5.7% (£4.8m) to £79.4m
(H1 2024: £84.2m). Market conditions in the UK remained subdued due to weaker
consumer demand for general merchandise, while international sales grew by 12%
to £29.1m over the same period. As anticipated, the impact of air fryer
comparatives continued to weigh on like-for-like performance, with sales in
this category down 46% (£4.5m) to £5.2m. This effect was most notable in Q1,
when Group sales were down 9.3% year-on-year. However, trading improved in Q2,
with sales down by a more moderate 2.2%.

The Group entered the calendar year 2025 with the H2 order book up an
encouraging 24% year-on-year, led by strong forward orders from our larger
customers. However, since the start of January 2025, the current challenging
trading conditions faced by some of the Group's retail customers have impacted
short-term sentiment and has led to a moderating in the pace of new orders. As
a result, the Group's H2 2025 order book is currently up 13% year-on-year,
driven by strong forward orders from international customers (up 20% YoY) and
a 7% increase in the UK. Therefore, the Board believes that the Group's full
year revenues will now be broadly flat compared with the prior year.

The Group has maintained its focus on productivity through continuous
improvement, which helped to keep operating expenses flat in the period
despite continuing cost pressures. Investment in robotic process automation
and AI will also help mitigate upcoming cost impacts, including the increases
in employers' National Insurance contributions (£100k for the current year,
with a full-year effect of £300k) as well as the impact of Extended Producer
Responsibility ("EPR") legislation (expected to have a full year effect of
£300-£500k).

The Group also incurred c£2.0m in additional shipping costs during H1 due to
elevated freight rates over the summer. As a result, adjusted EBITDA for H1 is
expected to be in the region of £7.0m. With H2 expected to see a return to
top-line growth and freight rates having settled at more normal levels, the
Board now expects adjusted EBITDA for the full year to be in the range of
£14m-£16m.

Capital Allocation Policy

The Board reiterates its capital allocation policy of maintaining the net bank
debt/adjusted EBITDA ratio at around 1.0x, with the debt being used to fund
the Group's working capital. It is the Board's intention to continue to invest
in the business for growth, whilst returning around 50% of post-tax profits to
shareholders through dividends. This will continue to be supplemented by share
buy-backs, pursuant to a policy of maintaining net bank debt at a 1.0x
adjusted EBITDA ratio. As such, the Board will carefully consider the level of
the dividend in the current year to ensure it aligns with the Group's capital
allocation policy and supports its focus on both growth and shareholder
returns.

Commenting on the performance, Andrew Gossage, Chief Executive of Ultimate
Products, said:

"As expected, the first quarter of FY25 proved challenging, driven by subdued
consumer spending, global shipping disruption, and the fact that we were
lapping the tail end of the spike in air fryer sales last year. However,
trading conditions in Q2 showed some improvement, resulting in a more stable
top-line performance for the quarter. Looking ahead, we are cautiously
encouraged by both the improved shipping rate environment and by the healthy
order book that we have in place for the rest of the year, led by our
international business. We therefore anticipate a stronger performance in H2.
While upcoming cost pressures and the ongoing challenges faced by some of our
retail customers inevitably create some near-term uncertainty, we remain
confident in our medium-term strategy, particularly given the growing appeal
of our brands to shoppers across mainland Europe."

Financial summary, including consensus market expectations immediately prior
to this announcement

                  FY24 (Actual)  FY25 (Consensus)
 Revenue          £155.5m        £169.3m
 Adjusted EBITDA  £18.0m         £20.6m
 Adjusted PBT     £14.5m         £17.5m
 Adjusted EPS     12.3p          15.0p

 

Notice of Results

The Group intends to announce its interim financial results on Tuesday 25
March 2025.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR. Upon the publication of this announcement via a Regulatory Information
Service, this inside information is considered to be in the public domain.

For more information, please contact:

 

Ultimate Products +44 (0) 161 627 1400

Andrew Gossage, CEO

Chris Dent, CFO

 

Shore Capital +44 (0) 20 7408 4090

Malachy McEntyre (Corporate Broking)

Isobel Jones (Corporate Broking)

Mark Percy (Corporate Advisory)

David Coaten (Corporate Advisory)

Harry Davies-Ball (Corporate Advisory)

 

Cavendish Capital Markets Limited + 44 (0)20 7220 0500

Carl Holmes (Corporate Finance)

Matt Goode (Corporate Finance)

Trisyia Jamaludin (Corporate Finance)

Charlie Combe (Corporate Broking)

 

Sodali & Co +44 (0) 207 250 1446

Rob Greening

Sam Austrums

Oliver Banks

 

 

Notes to Editors

Ultimate Products is the owner of a number of leading homeware brands
including Salter (the UK's oldest houseware brand, established in 1760) and
Beldray (a laundry, floor care, heating and cooling brand that was established
in 1872). According to its market research, nearly 80% of UK households own at
least one of the Group's products.

 

Ultimate Products sells to over 300 retailers across 38 countries, and
specialises in five product categories: Small Domestic Appliances; Housewares;
Laundry; Audio; and Heating and Cooling. Other brands include Progress
(cookware and bakeware), Kleeneze (laundry and floorcare), Petra (small
domestic appliances) and Intempo (audio).

 

The Group's products are sold to a broad cross-section of both large national
and international multi-channel retailers as well as smaller national retail
chains, incorporating discount retailers, supermarkets, general retailers and
online retailers.

 

Founded in 1997, Ultimate Products employs over 370 staff, a significant
number of whom have joined via the Group's graduate development scheme, and is
headquartered in Oldham, Greater Manchester, where it has design, sales,
marketing, buying, quality assurance, support functions and warehouse
facilities across two sites. Manor Mill, the Group's head office, includes a
spectacular 20,000 sq ft showroom that showcases each of its brands. In
addition, the Group has an office and showroom in Guangzhou, China and in
Paris, France.

 

Please note that Ultimate Products is not the owner of Russell Hobbs. The
company currently has licence agreements in place granting it an exclusive
licence to use the "Russell Hobbs" trademark for cookware and laundry (NB this
does not include Russell Hobbs electrical appliances).

 

For further information, please visit www.upplc.com
(https://url.avanan.click/v2/r02/___http:/www.upplc.com___.YXAxZTpzaG9yZWNhcDphOm86MDA2ZmZjNzc3MWQ1MjVlMDQ0ZTY2NDg1ZGU5NDE4Nzc6Nzo1YmMxOmNhZGIwOGJkMDBjOTlhNGM5NTdlY2U3Mjk0OGJmMmJkYjI4NTdmMGE4MjQ4ZDdjMDFjODJhMWNkMzViZjgwY2I6cDpUOk4)
.

 

 

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