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 economies of the UK and Continental Europe should be valued highly.

Profits were in line with expectations. Online revenues were notably strong and increased by 64% in FY2023.

With robust finances and a clear message that the UPGS brands are delivering brisk sales growth, we reiterate our 250p fair value for the shares.