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 supermarkets cutting back orders to reduce inventory levels, as well as weakened overall consumer demand for general merchandise. Moreover, this year’s outcome compares with a period of unusually strong buying of energy efficient air fryers in FY2023. We expect a strong bounce back for sales revenue in FY2025 as international momentum gathers pace and Beldray and Salter benefit from their re-brands in the UK.

Based on a select group of comparable consumer goods companies we reiterate our estimated 200p Fair Value for ULTP shares. We highlight their superior yield and a miserly current 0.8x EV/sales ratio. At a 200p share price the company’s FY2025 EV/EBITDA would be 8.9x and its prospective P/E ratio an undemanding 13.9x. In our view, investors should consider the potential for a material rerating of the shares, driven by a return to positive sales momentum.