Ultimate Products plc (ULTP) develops new, innovative concepts and brings professional, sought-after products to the mass market. Their offices span two continents, with headquarters in the UK, a sourcing office and showroom in China and a further showroom in Continental Europe. Key owned brands include Salter, Beldray, Progress, Kleeneze, Petra and Intempo. The company also markets non-electrical Russell Hobbs products under licence, now on a rolling four-year basis.

10 Feb 2020

EBITDA margin sustains profit growth

UPGS reconfirmed FY2020 profit guidance in a trading statement released today.

While FY2020 sales guidance has been reduced, adjusted EBITDA margins will be slightly higher at 8.1% compared with 7.9% envisaged previously.

Group banking facilities, that gave £13.2m headroom at end-January were extended until 2024.

With the majority of its manufactured product sourced from China, UPGS's Board is closely monitoring coronavirus developments and highlights that the extension to the Chinese New Year holiday of 9 days will cause production delays. That said, the company will take necessary steps to mitigate any disruption and highlights its extensive experience of managing supply chain disruptions in China, including virus related ones.

UPGS's trading proved more resilient than a number of UK consumer-facing companies in recent months. As a result, we continue to argue for a 100p share price, which would imply 9.6x FY2020 EV/EBITDA and an 11.8x P/E ratio.

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