30th Apr 2018 12:42
LONDON (Alliance News) - Brand sourcing firm UP Global Sourcing Holdings PLC halved its interim dividend Monday after profit and revenue declined sharply on the back of tough trading conditions.
For the six months ended January, pretax profit declined to GBP3.9 million from GBP6.7 million the year prior. This was after revenue fell to GBP48.4 million from GBP68.1 million the year before.
Revenue and profit performance was hurt by a "much tougher" trading environment in the period compared to a "unusually strong" trading environment the year prior. In addition, there was a one-off impact of revenue deferral due to a change in supply arrangements for a major European customer.
UP Global declared a 0.83 pence per share interim dividend, down from 1.62p the year prior.
"This has been a tough six months for both Ultimate Products and the wider general merchandise sector in the UK, as discretionary spend has continued to come under pressure due to low consumer confidence," UP Chief Executive Officer Simon Showman said. "Our financial performance during the period reflects this market headwind."
"While the UK looks set to remain challenging," Showman added, "we are pleased with the early progress that is being made in Germany and are delighted to have opened our new 10,000 sq ft showroom there earlier this month, which will provide a great showcase for our products to our European customer base."
"More broadly, we are working hard to ensure that the company is positioned as strongly as possible to navigate its way through the current soft trading environment", Showman added. "We are more focused than ever on the execution of our strategy, and on improving operational efficiencies whilst not compromising in any way on the quality of our products and service. The group is well invested, retains a strong balance sheet, and maintains comfortable levels of funding headroom within its bank facilities. As a result, we remain confident in our ability to deliver growth in the longer term."
Net debt at the end of January stood at GBP6.7 million, 35% lower than the GBP10.2 million the year prior.
Shares in UP were 5.5% higher at 38.19 pence on Monday.
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