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 supermarket channels.

ULTP’s sales outlook for FY2025 is a return to growth. First, we expect a home market rebound as the company no longer faces the air fryers comparison issue. Second, there are clear signs that the Salter re-brand is working well and there will probably be some early benefits from a similar uplift for Beldray. Third, Europe should see further advances arising from the Paris showroom’s stronger sales into European discounters and more normal German supermarkets trading. However, the pattern of order flows suggests growth will pivot significantly towards the second half of the year.

We highlight UPs superior yield and attractive FY2025 0.8x EV/sales ratio. We continue to highlight potential for a material re-rating of the shares, driven partly by a return to positive sales momentum this year. We retain our 200p/share Fair Value.