13th Feb 2024 09:13
(Alliance News) - Ultimate Products PLC on Tuesday said its half-year revenue declined, "held back" by reduced supermarket orders due to overstocking, but touted optimism in its outlook.
The Manchester-based owner of homeware brands, including Salter and Beldray said its half-year to January 31 lapped a tricky comparative, which was boosted by "exceptionally strong demand for energy efficient air fryers".
Ultimate Products said revenue in the half-year fell 4.1% annually to GBP84.0 million from GBP87.6 million.
Looking ahead, the company struck an optimistic tone. It: "Combined with lower freight rates in the period, this increased productivity has led to the group achieving improved operating margins. As the group moves into H2 2024, shipping schedules are expected to settle, and peak air-fryer sales will move out of the prior year comparatives.
It added: "More importantly, supermarket overstocking issues are continuing to subside and following the peak Christmas trading period more retail customers are reporting normalised stock positions, allowing an improving order trend for 2024."
Ultimate Products said it expects full-year profit in line with current market expectations, which stand at GBP21.6 million for adjusted earnings before interest, tax, depreciation, and amortisation, up 6.9% from GBP20.2 million in financial 2023, and adjusted earnings per share of 15.6p, up 1.3% year-on-year from 15.4p.
In addition, the firm set out a new capital allocation policy, as acquisition debt from its Salter deal has now largely been repaid. Ultimate Products bought Salter Brands for GBP34.0 million in July 2021.
"It is the board's intention to continue to invest in the business enabling it to grow, whilst returning around 50% of post-tax profits to shareholders through dividends," it said, adding that it may also supplement this with share buybacks.
Ultimate Products shares fell 0.8% to 145.88 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News slot editor
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