Ultimately, there’s brand value

What could have been a “year of living dangerously” for UPGS was a year of living positively. Today’s headline preliminary FY2020 results contain few surprises, so investors should in our view reflect on the company’s relatively upbeat stance for the near-term outlook. Despite new Covid measures, a combination of effective brand management, new distribution channels and geographical expansion augurs well for sustainable revenue growth.

We maintain our assessment of fair value for UPGS’s shares at 150p, which is a healthy premium to current levels. At that price, key valuation multiples would still only be a 1.1x EV/sales ratio and 17x P/E ratio based on FY2022 forecasts.