25th Mar 2025 07:00
25 March 2025
Ultimate Products plc
("Ultimate Products", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JANUARY 2025
Continued focus on strategic priorities amid challenging UK trading conditions
Ultimate Products, the owner of a number of leading homeware brands including Salter (the UK's oldest houseware brand, est.1760) and Beldray (est.1872), announces its interim results for the six months ended 31 January 2025 ("H1 2025").
Financial highlights
· H1 2025 Group revenue of £79.5m, down 6%
o UK revenue down 13% to £50.4m, while International revenue increased 12% to £29.1m
o Weak UK consumer demand and the anticipated impact of lower air fryer sales partially offset by encouraging international sales growth with strong demand from European discounters (+39%), demonstrating the strength and progress of the Group in this core strategic market
o Improving sales trend, with Q2 sales down 2.2% year-on-year, representing an improvement on Q1 sales, which were down 9.3%
· Gross margin of 23.2% (H1 2024: 26.7%), impacted by £2.0m in additional shipping costs due to elevated freight rates over the summer, which have since normalised
· Operating costs well controlled, with administrative expenses up just 3% compared to H1 2024
· Adjusted EBITDA* down 38% to £7.0m (H1 2024: £11.3m), reflecting the operational gearing of reduced sales
· Statutory profit before tax down 47% to £5.1m (H1 2024: £9.5m), with Adjusted profit before tax* down 46% to £5.2m (H1 2024: £9.6m)
· Statutory EPS down 48% to 4.2p (H1 2024: 8.2p), with Adjusted EPS* down 48% to 4.3p (H1 2024: 8.3p)
· Interim dividend per share down 37% to 1.55p (H1 2024: 2.45p) in line with the company policy of returning around 50% of post-tax profits to shareholders through dividends
· Net bank debt/adjusted EBITDA* ratio of 1.3x (31 July 2024: 0.6x), with the 12-month rolling average ratio at 1.0x (31 July 2024: 0.7x)
· Cash generation from operating activities of £1.1m (H1 2024: £14.4m), with increased investment in working capital following longer shipping times caused by Red Sea disruption resulting in £9.4m of additional inventory
*Adjusted measures are before share-based payment expenses and non-recurring items
Operational highlights
· Continued focus on strengthening the equity of our premier brands, which account for 80% of our sales and delivered a resilient performance in the period, down only 1%
o This includes brand transformation of Beldray, with its consumer launch in partnership with a major UK supermarket taking place in March 2025
· Enhanced European strategy, with demonstrable growth and strong momentum across key sales channels during the period
· Ongoing progress in driving Group productivity with a focus on continuous improvement, having implemented new Product Information Management ("PIM") software during the period
· Appointment of Andrew Milne and José Carlos González-Hurtado as Non-Executive Directors, bringing valued insights into both the UK and European consumer goods landscapes
Current trading and outlook
The Group is trading in line with revised market expectations for FY25. Strong growth in Europe continues to be offset by weak UK trading, resulting in an expected flat topline performance for the year, with sales forecast to return to growth in H2. As we see the benefits of the normalisation of freight rates and our use of automation offsets operational cost inflation, we expect to see improved operating margins during the second half of the year, resulting in a full-year adjusted EBITDA in line with market expectations.
Commenting on the results, Andrew Gossage, Chief Executive of Ultimate Products, said:
"The UK trading environment has undoubtedly been challenging, and this has inevitably impacted our H1 performance. However, growing traction in Europe, driven by strong demand from discounters, continues to offset some of this weakness and reinforces our view that we have significant growth opportunities within that market. Our core brands of Salter and Beldray have been resilient and remain central to our strategy, with a brand transformation of Beldray underway to strengthen its market presence and broaden its appeal.
"We are confident that our strategy is delivering long-term benefits for the business and continue to focus on operational excellence and efficiency. Our ongoing investments in automation and AI are driving significant productivity, enhancing our ability to serve customers. This exciting work is increasingly being initiated by our graduates, who continue to astound with their problem-solving ideas. By maintaining our strategic focus and continuing to strengthen our position in Europe, we are well placed to drive sustainable long-term growth."
Financial summary, including consensus market expectations immediately prior to this announcement
FY24 (Actual) | FY25 (Consensus) | |
Revenue | £155.5m | £155.0m |
Adjusted EBITDA | £18.0m | £14.4m |
Adjusted PBT | £14.5m | £11.1m |
Adjusted EPS | 12.3p | 9.4p |
For more information, please contact:
Ultimate Products +44 (0) 161 627 1400
Andrew Gossage, CEO
Chris Dent, CFO
Sodali & Co +44 (0) 207 250 1446
Rob Greening / Sam Austrums
Notes to Editors
Ultimate Products is the owner of a number of leading homeware brands including Salter (the UK's oldest houseware brand, established in 1760) and Beldray (established in 1872). According to its market research, nearly 80% of UK households own at least one of the Group's products.
Ultimate Products sells to over 300 retailers across 38 countries, and specialises in five product categories: Small Domestic Appliances; Housewares; Laundry; Audio; and Heating and Cooling. The Group's products are sold to a broad cross-section of both large national and international multi-channel retailers as well as smaller national retail chains, incorporating discount retailers, supermarkets, general retailers and online retailers.
Founded in 1997, Ultimate Products employs over 350 staff, a significant number of whom have joined via the Group's graduate development scheme, and is headquartered in Oldham, Greater Manchester, where it has design, sales, marketing, buying, quality assurance, support functions and warehouse facilities across two sites. Manor Mill, the Group's head office, includes a spectacular 20,000 sq ft showroom that showcases each of its brands. In addition, the Group has an office and showroom in Guangzhou, China and in Paris, France.
Please note that Ultimate Products is not the owner of Russell Hobbs. The Group currently has licence agreements in place granting it an exclusive licence to use the "Russell Hobbs" trademark for cookware and laundry (NB this does not include Russell Hobbs electrical appliances).
For further information, please visit www.upplc.com.
BUSINESS REVIEW
We present the Interim Report for the six months ended 31 January 2025, a period in which, against a challenging consumer and retailer environment in the UK, we have remained focused on our strategic plans for long-term growth and profitability while making tangible progress with our European strategy.
Trading
The fall in year-on-year sales can be largely attributed to the anticipated impact of lapping the end of the air-fryer boom during Q1, with H1 air fryer sales down 49% (£4.8m) to £4.9m.
H1 25 | H1 24 | Change |
| ||||||||
Air Fryer | Other | Total | Air Fryer | Other | Total | Air Fryer | Other | Total | |||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | % | % | % | |||
UK | 3,004 | 47,406 | 50,410 | 7,041 | 51,109 | 58,150 | -57% | -7% | -13% | ||
International | 1,963 | 27,111 | 29,074 | 2,721 | 23,308 | 26,029 | -28% | 16% | 12% | ||
Total | 4,967 | 74,517 | 79,484 | 9,762 | 74,417 | 84,179 | -49% | 0% | -6% |
In line with our strategic plans, international sales grew strongly, up 12% to £29.1m. This was driven by a 39% increase in sales to European discounters, reaching £14.0m. Growth in Europe is strategically important for the Group, as our market penetration there remains significantly lower than in the UK. Our ambition, on which we are making encouraging initial progress, is to grow our market share in the sizable European market by leveraging our first-class capabilities and our trusted UK brands.
In the UK, sales declined 13% in total, or 7% excluding air fryers. This disappointing performance reflects the well-documented challenging trading conditions in the UK market. Subdued consumer spending persisted throughout calendar year 2024, defying expectations that a return to real wage growth would reignite consumer demand.
Nonetheless, despite the challenging UK retail environment, we have seen growth in certain key segments. During the period, sales to UK Supermarkets rose by 5% (£0.8m) to £16.0m, as the overstocking that had previously held back ordering subsided and loyalty schemes supported customer spending.
Clearance sales (sales of third-party close-out parcels rather than UP-branded product), which grew strongly during FY24 as suppliers dealt with their overstocks, have declined 22% (£1.3m) to £4.6m in the current period. While tactically useful in opening doors with new customers, these sales are not strategically important for long-term growth as they are inherently one-off. As overstocking subsides, the opportunities associated with these sales reduces.
The greatest challenge during the period has stemmed from some of our wider UK customer base of smaller retailers. Among these customers, we have seen sales decline rather than grow. These retailers are being affected by softer consumer demand and mounting cost pressures, including recent changes to NI taxation rates and increases in the National Living Wage. Although we mitigate our balance sheet risk through credit insurance, the ongoing impact of weak demand on our revenue remains. For example, in H1 FY24, we made sales of £1.4m to customers who have since gone into liquidation.
Strategy
In a challenging trading environment, it is tempting for a business to lose sight of its core strategy. However, we have continued to focus on our strategic plans and make good progress toward our long-term priorities. Our purpose remains clear: to provide beautiful and more sustainable products for every home. We are focused on delivering outstanding branded products that appeal to households across our key markets. In addition, we ensure these products are attractively priced, not only for consumers but also for our retail partners, who can earn an equivalent 'own label' margin with us.
Over the past 10 years, we have built the Group into a leading supplier of quality branded housewares, selling to the majority of UK retailers. These retailers are initially drawn to the opportunity to sell branded products that consumers want while maintaining an 'own label' margin. However, it is our continued focus on our highly advanced operational capabilities that turns retailers from customers into strategic partners.
We firmly believe that our value proposition - built on price, product, brand and capability - is as attractive to European retailers as it is to those in the UK. However, this is not just a belief; it is demonstrated in our growing strategic relationships, using our proven 'land-and-expand' approach. Although we are not a small player in Europe, with sales exceeding £50m in FY24, our market share in Europe remains significantly lower than in the UK. Given the scale of the European market (population c.477m), we see significant growth potential. Our European penetration is far below that of the UK (population: c.67m), where we currently sell approximately £1.46 of product per capita. We believe that a similar level of penetration in Europe is achievable in the mid-term and would be transformational for our business.
H1 FY25 | H1 FY24 | Change | Change | |
£000 | £000 | £000 | % | |
Supermarket | 7,985 | 7,457 | 528 | 7% |
Discounter | 15,082 | 13,300 | 1,782 | 13% |
Online | 2,021 | 2,009 | 12 | 1% |
Other | 3,987 | 3,263 | 724 | 22% |
International Sales by Channel | 29,075 | 26,029 | 3,046 | 12% |
In the current period we have continued to see growth across Europe, with sales increasing across our main sales channels, up 12% to £29.1m. This growth has been driven by strong relationships with EU discounters.
Our marketing to retailers is built around showcasing our significant operational capabilities, reinforced by our credentials as an established supplier to both large UK and EU discounters. Internally, we have adopted the mantra 'Europe first' to emphasise the importance of our European strategy to all of our people. This is not to say that we believe in providing second rate service to our UK customers, but rather acknowledges that, as a UK supplier, we have more to learn about the European market. As a result, a more tailored and focused approach is required to achieve the same level of operational excellence as we do in the UK.
To strengthen our European capabilities, we have been fortunate to appoint José Carlos González-Hurtado as a Non-Executive Director. His extensive experience has already helped the team to refine their approach to product, marketing, branding, and customer acquisition and retention.
The guiding principle across all our branding is 'Salter & Beldray first'. Salter and Beldray are our two most significant brands. 80% of our revenue comes from the brands we own, and 60% from our two principal brands, Salter (our scales and kitchen brand) and Beldray (our laundry and floorcare brand). Together, these two British heritage brands boast over 400 years of history and exceptional consumer recognition.
We continue to focus our product development on core categories, adopting a more brand-led approach to design and prioritising building brand equity to drive sales volumes. In the current period, we have completed our relaunch of the Beldray brand, repositioning it as a modern, bright and fun brand. The consumer launch took place in March with an exclusive partner, supported by a multi-channel marketing campaign to drive awareness, and fun, relatable content to highlight how Beldray is here to help you with your everyday mishaps (https://beldray.com/).
Our established British heritage brands provide credibility and build trust with our target audience in Europe. Consumer research in France and Germany into the perception of British brands has reinforced this, with results showing that sentiment among both French and German consumers is extremely positive, with reliability, trustworthiness and quality emerging as key attributes for consumers in both countries. This feedback gives us confidence in replicating our UK success as we expand in Europe.
While Salter and Beldray are our core brands, our portfolio includes supporting brands that can serve the varying needs of our customers. In cases where a retail customer seeks a level of brand exclusivity, we have successfully leveraged both Petra and George Wilkinson to great effect. The latter, a heritage cookware brand from Burnley, has seen strong growth through sales to a Dutch discounter.
Our relationships with major retailers are underpinned by the excellence of our service, which allows us to go the extra mile for them. This is made possible by our impressive operational capability, which has been built around our culture of continuous improvement.
At the heart of our culture of continuous improvement is the mindset of 'do less, do it better'. At the most rudimentary level, doing 'less' may mean challenging ourselves as to whether individual tasks are necessary, but it also encapsulates a laser-focused approach to all that we do. 'Do it better' can encompass a range of solutions, such as process change, robotic process automation and AI. During the period, we have continued this journey and have automated hundreds of low-skill, low-reward tasks, ultimately increasing the ability of our workforce to focus on higher value activities. This exciting work is increasingly being initiated by our graduates, who continue to astound with their problem-solving ideas. By solving issues with automation, we are able to increase productivity and improve accuracy. This results in a better customer experience, helping to drive sales, with savings being reinvested in price, quality and marketing spend.
During the period, we continued to invest in our systems, implementing Product Information Management ("PIM") software to store, enrich and manage complex product information. This has already delivered benefits across multiple functions, including sales, buying, online, marketing, customer services, sourcing and quality assurance. These benefits include increased productivity, accelerated training times, lower error rates and better quality product information. We see this as just the beginning, as our talented teams fully embrace this new technology and use it to drive further enhancements, with AI likely to play a key role.
Looking ahead, the next major, multi-year project will be the replacement of our enterprise resource planning ("ERP") system. Our current system is reaching end-of-life, limiting its efficiency and automation potential. Upgrading it will be a critical step in further enhancing our operational capabilities.
Over the past 10 years, our focus on productivity, operational efficiency and capability has driven gross profit per colleague from £82k to £118k at the end of FY24. However, in the current period, gross margin reduced by 18%, while average headcount fell by 8% to 356 FTE (H1 2024: 389). As a result, gross profit per colleague - a key KPI - fell to £103k per head. Despite this, we expect the benefits of our efficiency initiatives to materialise as freight rates continue to ease and UK sales return to growth, thereby supporting increased profitability.
Performance
| H1 FY25 | H1 FY24 | Change | Change |
| £'000 | £'000 | £'000 | % |
Revenue | 79,484 | 84,179 | (4,695) | -6% |
Cost of sales | (61,073) | (61,816) | 743 | -1% |
Gross profit | 18,411 | 22,363 | (3,952) | -18% |
Administrative expenses | (11,397) | (11,113) | (284) | 3% |
Adjusted EBITDA* | 7,014 | 11,250 | (4,236) | -38% |
Depreciation & amortisation | (1,119) | (1,069) | (50) | 5% |
Finance expense | (734) | (598) | (136) | 23% |
Adjusted profit before tax* | 5,161 | 9,583 | (4,422) | -46% |
Tax expense | (1,468) | (2,399) | 931 | -39% |
Adjusted profit after tax* | 3,693 | 7,184 | (3,491) | -49% |
Share-based payment expense | (86) | (96) | 10 | -10% |
Tax on adjusting items | 22 | 24 | (2) | -10% |
Statutory profit after tax | 3,629 | 7,112 | (3,483) | -49% |
*Adjusted measures are before share-based payment expense and non-recurring items.
During the period, unaudited Group revenues decreased 6% (£4.7m) to £79.5m (H1 2024: £84.2m).
Channel & Territory
H1 FY25 | H1 FY24 | Change | Change | |
£000 | £000 | £000 | % | |
Supermarket | 16,024 | 15,259 | 765 | 5% |
Discounter | 7,350 | 11,369 | (4,019) | -35% |
Online | 16,684 | 18,865 | (2,181) | -12% |
Other | 10,351 | 12,657 | (2,306) | -18% |
UK by Channel | 50,409 | 58,150 | (7,741) | -13% |
Supermarket | 7,984 | 7,457 | 527 | 7% |
Discounter | 15,083 | 13,298 | 1,785 | 13% |
Online | 2,021 | 2,009 | 12 | 1% |
Other | 3,987 | 3,265 | 722 | 22% |
International by Channel | 29,075 | 26,029 | 3,046 | 12% |
Supermarket | 24,008 | 22,716 | 1,292 | 6% |
Discounter | 22,433 | 24,667 | (2,234) | -9% |
Online | 18,705 | 20,874 | (2,169) | -10% |
Other | 14,338 | 15,922 | (1,584) | -10% |
Total by Channel | 79,484 | 84,179 | (4,695) | -6% |
Against a backdrop of generally subdued consumer demand for consumer goods, it was pleasing to see sales to Supermarkets return to growth, rising by 6% (£1.3m) to £24.0m, despite overall Group sales falling by 6%. In the UK, this increase (5%) was driven by stronger trading from our supermarket customers, who have been winning general merchandise market share through their loyalty schemes. In Europe (up 7%) we saw the end of the overstocking issues, which previously held back orders from German supermarkets.
Sales to discounters fell 9% (£2.2m) to £22.4m, despite continued growth in EU discounters, where sales increased by 13% (£1.8m) to £15.1m (excluding air fryers and clearance, they were up £4.1m to £14.4m). In contrast, UK discounter sales declined by 35%, largely reflecting weakness in the UK consumer market, which has also been exacerbated by some cyclical moves to own label (excluding air fryers and clearance, sales fell 28%). A similar pattern was evident in the 'Other' category, which includes a broad range of smaller customers. Here, total UK sales declined by 18%, reflecting the weakness in the overall market. When excluding air fryers and clearance, sales were down 23%.
Online sales in the UK declined by 12% (£2.2m), primarily due to the fall in air fryers and clearance sales. Excluding these, online sales remained flat. However, online sales showed a notable divergence between Q1 and Q2, with year-on-year sales down 22% in Q1 before recovering to a 5% increase in Q2.
Overall international sales were up 12%, and it is pleasing to see that we recorded growth across all our channels.
Product
| H1 2025 | H1 2024 | Change | Change | H1 2025 | H1 2024 |
| £'000 | £'000 | £'000 | % | % | % |
Small Domestic Appliances | 29,134 | 33,175 | (4,041) | -12% | 37% | 39% |
Housewares | 25,152 | 21,387 | 3,765 | 18% | 32% | 25% |
Laundry | 9,805 | 10,204 | (399) | -4% | 12% | 12% |
Audio | 7,751 | 7,757 | (6) | 0% | 10% | 9% |
Heating & Cooling | 1,741 | 1,656 | 85 | 5% | 2% | 2% |
Third party clearance | 4,610 | 5,914 | (1,304) | -22% | 6% | 7% |
Others | 1,291 | 4,086 | (2,795) | -68% | 2% | 5% |
Total | 79,484 | 84,179 | (4,695) | -6% | 100% | 100% |
Small Domestic Appliances (SDA), which includes air fryers (down £4.8m), declined by 12% (£4.0m) during the period, which was an expected outcome given the cooling off of the air fryer market. In addition, as previously noted, Third-party clearance sales fell by 22% (£1.3m). Encouragingly, Housewares returned to growth, reflecting a resurgence in cookware sales after several years of overstocking. The Group's strategy remains focused on our core product areas rather than subscale categories. In line with this, it is important to note that the most significant percentage drop was in the 'Others' category rather than in our core ranges.
Brand
| H1 2025 | H1 2024 | Change | Change | H1 2025 | H1 2024 |
| £'000 | £'000 | £'000 | % | % | % |
Salter | 29,210 | 32,104 | (2,894) | -9% | 37% | 38% |
Beldray | 17,611 | 18,450 | (839) | -5% | 22% | 22% |
Russell Hobbs (licensed) | 7,475 | 5,787 | 1,688 | 29% | 9% | 7% |
Progress | 3,461 | 3,449 | 12 | 0% | 4% | 4% |
George Wilkinson | 3,412 | 663 | 2,749 | 414% | 4% | 1% |
Kleeneze | 1,334 | 1,895 | (561) | -30% | 2% | 2% |
Petra | 933 | 1,754 | (821) | -47% | 1% | 2% |
Premier Brands | 63,436 | 64,102 | (666) | -1% | 80% | 76% |
Other UP brands | 6,671 | 7,842 | (1,171) | -15% | 8% | 9% |
Third party clearance & own label | 9,377 | 12,235 | (2,858) | -23% | 12% | 15% |
Total | 79,484 | 84,179 | (4,695) | -6% | 100% | 100% |
Salter, our iconic scales and kitchen brand, declined by 9% (£2.9m), driven by the £4.8m fall in air fryers sales. Beldray also saw a slight decline, reflecting weaker UK trading. Russell Hobbs branded cookware remains popular in Germany and France, where the brand is currently better known than Salter and Beldray. Sales have increased as overstocking issues at German supermarkets have eased. Meanwhile, George Wilkinson, a cookware brand used by discounters seeking a level of exclusivity, experienced significant growth in the period as we expanded sales with EU discounters. As a result, our Premier Brands reduced by just 1% compared to the overall sales decline of 6%, meaning that they comprised 80% of our sales. Consistent with our core strategy of growing our own brands, the largest decline was in the 'Third-party clearance and own label' category.
Operating Margins
Gross margin decreased to 23.2% (H1 2024: 26.7%) due to elevated freight rates over the summer, driven by global capacity constraints following the closure of the Red Sea to international shipping. These higher rates led to an additional £2.0m shipping cost for the period. Reassuringly, rates have now normalised, returning to pre-shipping crisis levels, with the benefits of this expected to be realised in H2.
Administrative expenses rose just 3% to £11.4m (H1 2025: £11.1m). People-related costs remained flat at £8.2m, despite a 10% increase in average cost per employee, reflecting both the externally imposed inflationary effects of NLW increase and our own commitment to employee remuneration designed to attract and retain talent. This approach supports productivity within the business, enabling us to reduce headcount by 8% to an average FTE of 356 (H1 2024: 389). Our continued investment in robotic process automation and AI will also help mitigate upcoming cost pressures, including the increases in employers' National Insurance contributions (£100k for the current year, with a full-year effect of £300k) and the impact of Extended Producer Responsibility ("EPR") legislation (expected to have a full year effect of £300k-£500k).
The combination of a 6% fall in revenues, the impact to gross margin of an additional £2.0m of freight costs, and flat overheads has led to a 38% fall in adjusted EBITDA to £7.0m (H1 2024: £11.3m), with our adjusted EBITDA margin slipping from 13.4% to 8.8%.
Seasonality
The Group has historically had a seasonal weighting towards H1, with retail demand being higher in the peak Christmas trading period. However, over the past few years, this pattern has become less pronounced, with sales growth weighted towards the less seasonal online channels. As a result, it is anticipated that revenues for the second half of the year to 31 July 2025 will be only marginally lower than for the six months ended 31 January 2025. In addition, as we expect to see the benefits of the normalisation of freight rates in the second half of the year, we expect operating profits to be marginally weighted towards H2.
Adjusted & statutory profit
Depreciation and amortisation increased marginally by 5% to £1.1m (H1 2024: £1.1m). The finance charge has increased by 23% to £0.7m (H1 2024: £0.6m) as a result of higher average net debt across the period. Around £0.2m of the charge relates to fixed debt related costs and imputed interest charges on capitalised lease liabilities. As a result, adjusted profit before tax decreased 46% to £5.2m (H1 2024: £9.6m). The tax charge for the period at 28.5% (FY24: 25%) was higher than the UK statutory rate of 25% due to the higher rate of tax paid on our European foreign branches.
Earnings per share
As a result of our ongoing share buy-back scheme the number of shares in issue has decreased from 89,312,457 at 31 January 2024 to 87,569,892 at 31 January 2025, with the weighted average number of shares decreasing 1% to 85,527,067 (31 January 2024: 86,426,737).
| H1 2025 | EPS | H1 2024 | EPS |
| £'000 | p | £'000 | p |
Adjusted profit after tax / Adjusted EPS | 3,693 | 4.3 | 7,184 | 8.3 |
Share-based payment expense | (86) | (0.1) | (96) | (0.1) |
Tax on adjusting items | 22 | 0.0 | 24 | 0.0 |
Statutory profit after tax / Basic EPS | 3,629 | 4.2 | 7,112 | 8.2 |
As a result, adjusted profit after tax decreased 49% and adjusted earnings per share decreased by 48%.
Financing and cash flow
The Group generated cash from operating activities of £1.1m (H1 2024: £14.4m), being a 16% operating cash conversion. During the period we saw an increase in the level of investment in working capital, due to an increase in the level of stock.
| 31-Jan-25 | 31-Jan-24 | Change | Change |
| £'000 | £'000 | £'000 | % |
Sold Stock | 13,974 | 9,543 | 4,431 | 46% |
Free Stock | 12,820 | 12,738 | 82 | 1% |
Goods in Transit | 11,980 | 7,073 | 4,907 | 69% |
Total Stock | 38,774 | 29,354 | 9,420 | 32% |
The total level of stock increased by £9.4m year-on-year. The largest increase (£4.9m) was in Goods in Transit, which is inventory on the sea between China and the UK. Due to the closure of the Red Sea, sea freight is currently sailing around Africa, which is adding around 15-20 days to the total shipping time. In addition, the Group has seen an increase in the level of Sold Stock, which is stock which has been brought in on behalf of one of our larger customers who place orders 6-9 months ahead of delivery. Free Stock, which is stock which the Group brings into the country to sell direct to consumers and smaller retail customers has remained stable.
As a result, at the period end the Group had a net bank debt/adjusted EBITDA ratio of 1.3x (31 July 2024: 0.4x), which represents net bank debt of £17.7m (31 January 2024: £8.0m). During the year the Group sees significant movements within its working capital requirement related to the timings of orders with customers, therefore a longer view can be helpful in terms of considering the level of gearing within the business, with the 12-month rolling average ratio of net bank debt/adjusted EBITDA being 1.0x (31 July 2024: 0.7x).
|
31 January 2025 |
31 January 2024 | Change | Change |
| £'000 | £'000 | £'000 | % |
Cash | 2,521 | 5,780 | ||
RCF/Overdraft | (6,387) | (5,767) | ||
Invoice Discounting | (8,155) | (1,113) | ||
Import Loans | (5,794) | (1,986) | ||
Term loan | - | (5,000) | ||
Debt Issue Costs | 80 | 82 | ||
Net bank debt | (17,735) | (8,004) | (9,731) | 122% |
Capital Allocation Policy
It is the Board's intention to maintain the net bank debt/adjusted EBITDA ratio at around 1.0x, with the debt being used to fund the Group's working capital. The Board believes that this level of leverage is an efficient use of the Group's balance sheet and allows for further returns of capital to shareholders. It is the Board's intention to continue to invest in the business for growth, whilst returning around 50% of post-tax profits to shareholders through dividends, and to supplement this with share buy-backs pursuant to a policy of maintaining net bank debt at a 1.0x adjusted EBITDA ratio. In line with this policy, the Group returned £1.4m of cash to shareholders through the share buy-back (H1 2024: £nil). In addition, an interim dividend of [1.55] pence per share (H1 2024: 2.45 pence per share) was approved by the Board on 24 March 2025 and will be paid on 27 June 2025 to shareholders on record as at 30 May 2025 (ex-dividend date being 29 May 2025).
Andrew Gossage | Chris Dent |
Chief Executive Officer | Chief Financial Officer |
Consolidated Income Statement
|
Note | Unaudited 6 months ended 31 January 2025 | Unaudited 6 months ended 31 January 2024 | Audited year ended 31 July 2024 |
| £'000 | £'000 | £'000 | |
Revenue | 6 | 79,484 | 84,179 | 155,497 |
Cost of sales | (61,073) | (61,816) | (115,043) | |
Gross profit | 18,411 | 22,363 | 40,454 | |
Adjusted earnings before interest, tax, depreciation, amortisation, share-based payments & non‑recurring items | 7,014 | 11,250 | 18,022 | |
Depreciation | (1,100) | (1,058) | (2,169) | |
Amortisation of intangibles | (19) | (11) | (22) | |
Share-based payment expense | (86) | (96) | (137) | |
Total administrative expenses | (12,602) | (12,278) | (24,760) | |
Operating profit | 5,809 | 10,085 | 15,694 | |
Finance expense | 8 | (734) | (598) | (1,381) |
Profit before tax | 5,075 | 9,487 | 14,313 | |
Tax expense | (1,446) | (2,375) | (3,786) | |
Profit for the year attributable to equity holders of the Company | 3,629 | 7,112 | 10,527 | |
All amounts relate to continuing operations | ||||
Earnings per share | ||||
Basic | 9 | 4.2 | 8.2 | 12.2 |
Diluted | 9 | 4.2 | 8.1 | 12.0 |
Consolidated Statement of Comprehensive Income
| Unaudited 6 months ended 31 January 2025 | Unaudited 6 months ended 31 January 2024 | Audited year ended 31 July 2024 | |
| £'000 | £'000 | £'000 | |
Profit for the period | 3,629 | 7,112 | 10,527 | |
| ||||
Items that may subsequently be reclassified to the income statement | ||||
Fair value movements on cash flow hedging instruments | 1,995 | (546) | (1,108) | |
Hedging instruments recycled through the income statement at the end of hedging relationships | 373 | 1,274 | 1,605 | |
Deferred tax relating to cashflow hedges | (592) | (181) | (123) | |
Items that will not subsequently be reclassified to the income statement | ||||
Foreign currency translation | 1 | - | - | |
Other comprehensive income | 1,777 | 547 | 374 | |
Total comprehensive income for the period attributable to the equity holders of the Company | 5,406 | 7,659 | 10,901 |
Consolidated Statement of Financial Position
Note | Unaudited as at 31 January 2025 | Unaudited as at 31 January 2024 | Audited as at 31 July 2024 | |
£'000 | £'000 | £'000 | ||
Assets | ||||
Intangible assets | 37,225 | 36,992 | 36,981 | |
Property, plant and equipment | 6,686 | 8,039 | 7,574 | |
Total non-current assets | 43,911 | 45,031 | 44,555 | |
| ||||
Inventories | 38,774 | 29,354 | 36,578 | |
Trade and other receivables | 26,294 | 24,912 | 29,710 | |
Derivative financial instruments | 12 | 2,126 | 647 | 667 |
Current tax | - | 203 | - | |
Cash and cash equivalents | 2,521 | 5,780 | 4,733 | |
Total current assets | 69,715 | 60,896 | 71,688 | |
Total assets | 113,626 | 105,927 | 116,243 | |
| ||||
Liabilities | ||||
Trade and other payables | (32,080) | (29,766) | (39,084) | |
Derivative financial instruments | 12 | (28) | (635) | (996) |
Current tax | (471) | - | (105) | |
Borrowings | 11 | (20,256) | (13,784) | (15,151) |
Lease liabilities | (839) | (796) | (811) | |
Total current liabilities | (53,674) | (44,981) | (56,147) | |
Net current assets | 16,041 | 15,915 | 15,541 | |
| ||||
Deferred tax | (7,632) | (7,182) | (6,898) | |
Lease liabilities | (3,026) | (3,865) | (3,436) | |
Total non-current liabilities | (10,658) | (11,047) | (10,334) | |
Total liabilities | (64,332) | (56,028) | (66,481) | |
Net assets | 49,294 | 49,899 | 49,762 | |
| ||||
Equity | ||||
Share capital | 13 | 219 | 223 | 221 |
Share premium | 14,334 | 14,334 | 14,334 | |
Capital redemption reserve | 4 | - | 2 | |
Employee benefit trust reserve | (2,069) | (1,685) | (1,946) | |
Share-based payment reserve | 1,443 | 1,467 | 1,431 | |
Hedging reserve | 1,490 | (113) | (286) | |
Retained earnings | 33,873 | 35,673 | 36,006 | |
Equity attributable to owners of the Group | 49,294 | 49,899 | 49,762 |
| Share capital | Share premium | Capital redemption reserve | Employee benefit trust reserve | Share-based payment reserve | Hedging reserve | Retained earnings | Total equity |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 1 August 2023 | 223 | 14,334 | - | (1,989) | 1,817 | (660) | 32,414 | 46,139 |
Profit for the period | - | - | - | - | - | - | 7,112 | 7,112 |
Foreign currency retranslation | - | - | - | - | - | - | - | - |
Cash flow hedging movement | - | - | - | - | - | 728 | - | 728 |
Deferred tax movement | - | - | - | - | - | (181) | - | (181) |
Total comprehensive income for the period | - | - | - | - | - | 547 | 7,112 | 7,659 |
Transactions with shareholders: | ||||||||
Dividends paid | - | - | - | - | - | - | (4,289) | (4,289) |
Share-based payments charge | - | - | - | - | 96 | - | - | 96 |
Deferred tax on share-based payments | - | - | - | - | - | - | 159 | 159 |
Transfer of reserve on exercise of share award | - | - | - | - | (446) | - | 446 | - |
Transfer of shares to employees on exercise of share award | - | - | - | 614 | - | - | (169) | 445 |
Purchase of own shares by the EBT | - | - | - | (310) | - | - | - | (310) |
As at 31 January 2024 | 223 | 14,334 | - | (1,685) | 1,467 | (113) | 35,673 | 49,899 |
|
|
|
|
|
|
|
|
|
| Share capital | Share premium | Capital redemption reserve | Employee benefit trust reserve | Share-based payment reserve | Hedging reserve | Retained earnings | Total equity |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 1 August 2024 | 221 | 14,334 | 2 | (1,946) | 1,431 | (286) | 36,006 | 49,762 |
Profit for the period | - | - | - | - | - | - | 3,629 | 3,629 |
Foreign currency translation | - | - | - | - | - | - | 1 | 1 |
Cash flow hedging movement | - | - | - | - | - | 2,368 | - | 2,368 |
Deferred tax movement | - | - | - | - | - | (592) | - | (592) |
Total comprehensive income for the period | - | - | - | - | - | 1,776 | 3,630 | 5,406 |
Transactions with shareholders: | ||||||||
Dividends paid | - | - | - | - | - | - | (4,209) | (4,209) |
Share-based payments charge | - | - | - | - | 86 | - | - | 86 |
Deferred tax on share-based payments | - | - | - | - | - | - | (78) | (78) |
Transfer of reserve on exercise of share award | - | - | - | - | (74) | - | 74 | - |
Transfer of shares to employees on exercise of share award | - | - | - | 202 | - | - | (145) | 57 |
Purchase of own shares by the EBT | - | - | - | (325) | - | - | - | (325) |
Share buy-back | (2) | - | 2 | - | - | - | (1,405) | (1,405) |
As at 31 January 2025 | 219 | 14,334 | 4 | (2,069) | 1,443 | 1,490 | 33,873 | 49,294 |
Consolidated Statement of Cash Flows
For the period ended 31 January
Unaudited 6 months ended 31 January 2025 | Unaudited 6 months ended 31 January 2024 | Audited year ended 31 July 2024 | |
£'000 | £'000 | £'000 | |
Net cash flow from operating activities |
|
| |
Profit for the year | 3,629 | 7,112 | 10,527 |
Adjustments for: |
| ||
Finance costs | 734 | 598 | 1,381 |
Income tax expense | 1,446 | 2,375 | 3,786 |
Depreciation | 1,100 | 1,058 | 2,165 |
Amortisation | 19 | 11 | 22 |
Loss on disposal of non-current assets | - | - | 4 |
Derivative financial instruments | (75) | 91 | 190 |
Share-based payments | 86 | 96 | 137 |
Working capital adjustments |
| ||
(Increase)/decrease in inventories | (2,196) | (1,283) | (8,507) |
Decrease/(increase) in trade and other receivables | 3,416 | 4,591 | (207) |
(Decrease)/increase in trade and other payables | (7,020) | (293) | 9,048 |
Net cash from operating activities | 1,139 | 14,356 | 18,546 |
Income taxes paid | (1,016) | (1,828) | (3,176) |
Net cash from operations | 123 | 12,528 | 15,370 |
Cash flows used in investing activities | |||
Purchase of property, plant and equipment | (212) | (654) | (1,300) |
Purchase of intangible assets | (263) | - | - |
Net cash used in investing activities | (475) | (654) | (1,300) |
Cash flows used in financing activities | |||
(Purchase)/sale of own shares | (269) | 135 | (144) |
Share buy-back | (1,405) | - | (1,000) |
Proceeds from borrowings | 9,125 | 2,750 | 6,341 |
Repayment of borrowings | (4,013) | (8,837) | (11,071) |
Principal paid on lease obligations | (403) | (443) | (838) |
Debt issue costs paid | (53) | (60) | (137) |
Dividends paid | (4,209) | (4,289) | (6,411) |
Interest paid | (634) | (460) | (1,186) |
Net cash used by finance activities | (1,861) | (11,204) | (14,446) |
Net (decrease)/increase in cash and cash equivalents | (2,213) | 670 | (376) |
Exchange gains on cash and cash equivalents | 1 | 24 | 23 |
Cash and cash equivalents brought forward | 4,733 | 5,086 | 5,086 |
Cash and cash equivalents carried forward | 2,521 | 5,780 | 4,733 |
Notes to the Interim Results
1. General Information
Ultimate Products plc ('the Company') and its subsidiaries (together 'the Group') is a supplier of branded, value-for-money household products to global markets. The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is Ultimate Products plc, Manor Mill, Victoria Street, Chadderton, Oldham OL9 0DD.
This consolidated condensed interim financial does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 July 2024 were approved by the Board of Directors on 28 October 2024 and delivered to the Registrar of Companies. The comparative figures for the financial year ended 31 July 2024 are an extract of the Company's statutory accounts for that year. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 (2) or (3) of the Companies Act 2006.
This consolidated condensed interim financial information is unaudited but has been reviewed by the Company's Auditor.
2. Basis of Preparation
This consolidated condensed interim financial information for the six months ended 31 January 2025 has been prepared in accordance with IAS 34, 'Interim Financial Reporting', in accordance with UK-adopted international accounting standards. The consolidated condensed interim financial information should be read in conjunction with the audited financial statements for the year ended 31 July 2024, which have been prepared in accordance with UK-adopted international accounting standards.
Going Concern Basis
The Directors have adopted the going concern basis in preparing this consolidated condensed interim financial information after assessing the resilience of the Group in severe but plausible scenarios, taking account of its current position and prospects, the principal risks facing the business, how these are managed and the impact that they would have on the forecast financial position. In assessing whether the Group could withstand such negative impacts, the Board has considered cash flow, impact on debt covenants and headroom against its borrowing facilities. The Group's projections, which cover the period to July 2026, show that the Group will be able to operate within its banking facilities and covenants. Therefore, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the date of approval of the Interim Results Statement.
Accounting Policies
The accounting policies and method of computations adopted in the preparation of these condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 July 2024.
Adjusted Performance Measures (APMs)
APMs are utilised as key performance indicators by the Group and are calculated by adjusting the relevant IFRS measurement by share based payments and non-recurring items. The two main APMs which are used are Adjusted EBITDA and Adjusted EPS. The reconciliation of these items to IFRS measurements can be found in the Chief Financial Officer's Review. APMs are non-GAAP measures and are not intended to replace those financial measurements, but are the measures used by the Directors in their management of the business, and are, therefore, important key performance indicators (KPIs).
3. Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board. The Board is responsible for allocating resources and assessing performance of operating segments. The Directors consider that there are no identifiable business segments that are subject to risks and returns different to the core business. The information reported to the Directors, for the purposes of resource allocation and assessment of performance, is based wholly on the overall activities of the Group. The Group has therefore determined that it has only one reportable segment under IFRS 8. The results and assets for this segment can be determined by reference to the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Financial Position.
4. Principal Risks and Uncertainties
The Directors consider that the principal risks and uncertainties, which could have a material impact on the Group's performance in the remaining 6 months of the financial year, remain substantially the same as those stated on pages 44-45 of the Group's Annual Report for the year ended 31 July 2024, which is available on the Group's website, www.upplc.com.
5. Financial Instruments
The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow and fair value interest rate risk and price risk), credit risk and liquidity risk. The Group's exposure to foreign exchange risk is mitigated by entering into forward exchange contracts. Interest rate risk is managed by maintaining a portion of borrowings under the protection of interest rate swaps and caps. The Interim Results Statement should be read in conjunction with the Group's Annual Report for the year ended 31 July 2024, as it does not include all financial risk management information and disclosures contained within the Annual Report. There have been no changes in the risk management policies since the year-end.
6. Revenue
6 months ended 31 January 2025 | 6 months ended 31 January 2024 | Year ended 31 July 2024 | |
Geographical split by location: | £'000 | £'000 | £'000 |
United Kingdom | 50,410 | 58,150 | 101,152 |
Europe | 27,964 | 25,233 | 52,990 |
Rest of the World | 1,110 | 796 | 1,355 |
Total | 79,484 | 84,179 | 155,497 |
International sales | 29,074 | 26,029 | 54,345 |
Percentage of total revenue | 36.6% | 30.9% | 35.0% |
6 months ended 31 January 2025 | 6 months ended 31 January 2024 | Year ended 31 July 2024 | |
Analysis of revenue by brand: | £'000 | £'000 | £'000 |
Salter | 29,210 | 32,104 | 56,354 |
Beldray | 17,611 | 18,450 | 34,184 |
Russell Hobbs (licensed) | 7,475 | 5,787 | 12,059 |
Progress | 3,461 | 3,449 | 5,871 |
George Wilkinson | 3,412 | 663 | 1,617 |
Kleeneze | 1,334 | 1,895 | 3,188 |
Petra | 933 | 1,754 | 2,576 |
Premier brands | 63,436 | 64,102 | 115,849 |
Other proprietorial brands | 6,671 | 7,842 | 13,092 |
Own label and other | 9,377 | 12,235 | 26,556 |
Total | 79,484 | 84,179 | 155,497 |
|
| ||
6 months ended 31 January 2025 | 6 months ended 31 January 2024 | Year ended 31 July 2024 | |
Analysis of revenue by product: | £'000 | £'000 | £'000 |
Small domestic appliances | 29,134 | 33,175 | 58,119 |
Housewares | 25,152 | 21,387 | 40,603 |
Laundry | 9,805 | 10,204 | 18,630 |
Audio | 7,751 | 7,757 | 15,160 |
Heating and cooling | 1,741 | 1,656 | 3,028 |
Others | 5,901 | 10,000 | 19,957 |
Total | 79,484 | 84,179 | 155,497 |
|
| ||
| 6 months ended 31 January 2025 | 6 months ended 31 January 2024 | Year ended 31 July 2024 |
Analysis of revenue by sales channel: | £'000 | £'000 | £'000 |
Supermarket | 24,008 | 22,716 | 45,409 |
Discounter | 22,433 | 24,667 | 44,994 |
Online | 18,705 | 20,874 | 33,974 |
Other | 14,338 | 15,922 | 31,120 |
Total | 79,484 | 84,179 | 155,497 |
7. Seasonality
The Group has historically had a seasonal weighting towards H1, with retail demand being higher in the peak Christmas trading period. However, over the past few years, this pattern has become less pronounced, with sales growth weighted towards the less seasonal online channels. As a result, it is anticipated that the revenues for the second half of the year to 31 July 2025 will be only marginally lower than for the six months ended 31 January 2025. In addition, as we expect to see the benefits of the normalisation of freight rates in the second half of the year, we expect operating profits to be marginally weighted towards H2.
8. Finance Costs
| 6 months ended 31 January 2025 | 6 months ended 31 January 2024 | Year ended 31 July 2024 |
| £'000 | £'000 | £'000 |
Interest on bank loans and overdrafts | 658 | 461 | 1,138 |
Interest on lease liabilities | 105 | 126 | 242 |
Foreign exchange in respect of lease liabilities | 12 | 22 | 13 |
Other interest payable and similar charges | (41) | (11) | (12) |
Total finance cost | 734 | 598 | 1,381 |
9. Earnings per Share
Basic earnings per share is calculated by dividing the net income for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share amounts are calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial year, adjusted for the effects of potentially dilutive options. The dilutive effect is calculated on the full exercise of all potentially dilutive ordinary share options granted by the Group, including performance-based options which the Group considers to have been earned. The calculations of earnings per share are based upon the following:
6 months ended 31 January 2025 | 6 months ended 31 January 2024 | Year ended 31 July 2024 | |
Profit for the year | 3,629 | 7,112 | 10,527 |
Weighted average number of shares in issue | 88,053,629 | 89,312,457 | 89,213,704 |
Less shares held by the UPGS EBT | (2,526,562) | (2,885,720) | (2,657,123) |
Weighted average number of shares - basic | 85,527,067 | 86,426,737 | 86,556,581 |
Share options | 843,302 | 879,020 | 974,498 |
Weighted average number of shares - diluted | 86,370,369 | 87,305,757 | 87,531,079 |
Pence | Pence | Pence | |
Earnings per share - basic | 4.2 | 8.2 | 12.2 |
Earnings per share - diluted | 4.2 | 8.1 | 12.0 |
10. Dividends
| 6 months ended31 January 2025 | 6 months ended31 January 2024 | Year ended 31 July 2024 |
£'000 | £'000 | £'000 | |
Final dividend paid in respect of the previous year | 4,209 | 4,289 | 4,289 |
Interim declared and paid | - | - | 2,122 |
| 4,209 | 4,289 | 6,411 |
|
| ||
Per share | Pence | Pence | Pence |
Final dividend paid in respect of the previous year | 4.93 | 4.95 | 4.95 |
Interim declared and paid | - | - | 2.45 |
4.93 | 4.95 | 7.40 |
An interim dividend of [1.55]p per share was approved by the Board on 24 March 2025 and will be paid on 27 June 2025 to shareholders on record as at 30 May 2025 (ex-dividend date being 29 May 2025).
11. Bank borrowings
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Current | |||
Bank overdrafts Revolving credit facility Invoice discounting Import loans Term loan | 1,387 5,000 8,155 5,794 - | 5,767 - 1,113 1,986 5,000 | 4,791 - 8,765 1,668 - |
Less: Unamortised debt issue cost | 20,336 (80) | 13,866 (82) | 15,224 (73) |
20,256 | 13,784 | 15,151 | |
| |||
Total bank borrowings | 20,256 | 13,784 | 15,151 |
| |||
The earliest that lenders of the above borrowings require repayment is as follows: |
| ||
In less than one year Between one and two years Between two and five years Less: Unamortised debt issue cost | 20,336 - - (80) | 13,866 - - (82) | 15,224 - - (73) |
20,256 | 13,784 | 15,151 |
The Group is funded by external bank facilities provided by HSBC. The total drawn and undrawn facilities comprise a revolving credit facility of £5.0m (31 January 2024: £8.2m; 31 July 2024 £8.2m), an invoice discounting facility of £23.5m (31 January 2024: £23.5m; 31 July 2024 £23.5m) and an import loan facility of £12m (31 January 2024: £12m; 31 July 2024: £12m).
12. Financial Instruments
a) Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises are as follows:
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Trade receivables - held at amortised cost | 24,890 | 23,613 | 28,507 |
Derivative financial instruments - assets - carried at FVTOCI | 1,978 | 647 | 576 |
Derivative financial instruments - assets - carried at FVTPL | 148 | - | 91 |
Trade and other payables | (28,716) | (27,134) | (36,091) |
Derivative financial instruments - liabilities - carried at FVTOCI | - | (635) | (966) |
Derivative financial instruments - liabilities - carried at FVTPL | (28) | - | (30) |
Borrowings - held at amortised cost | (20,256) | (13,784) | (15,151) |
Lease liabilities - held at amortised cost | (3,865) | (4,661) | (4,247) |
Cash and cash equivalents - held at amortised cost | 2,521 | 5,780 | 4,733 |
b) Financial assets
The Group held the following financial assets at amortised cost:
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Cash and cash equivalents Trade receivables | 2,521 24,890 | 5,780 23,613 | 4,733 28,507 |
| 27,411 | 29,393 | 33,240 |
c) Financial liabilities
The Group held the following financial liabilities, classified as other financial liabilities at amortised cost:
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Trade payables Borrowings Lease liabilities Other payables | 23,027 20,256 3,865 5,689 | 21,010 13,784 4,661 6,124 | 30,363 15,151 4,247 5,728 |
| 52,837 | 45,579 | 55,489 |
d) Derivative financial instruments
The Group held the following derivative financial instruments, classified as fair value through profit and loss on initial recognition:
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Forward currency contracts Interest rate swaps Interest rate caps | 2,070 14 14 | (351) 193 170 | (544) 111 104 |
| 2,098 | 12 | (329) |
The following is a reconciliation of the financial instruments to the statement of financial position:
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Trade receivables Prepayments and other receivables not classified as financial instruments | 24,890 1,404 | 23,613 1,299 | 28,507 1,203 |
Trade and other receivables | 26,294 | 24,912 | 29,710 |
|
| ||
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 |
| £'000 | £'000 | £'000 |
Trade and other payables Other taxes and social security not classified as financial instruments | 28,716 3,364 | 27,134 2,632 | 36,091 2,993 |
Trade and other payables | 32,080 | 29,766 | 39,084 |
Derivative financial instruments - Forward contracts
The Group mitigates the exchange rate risk for certain foreign currency trade debtors and creditors by entering into forward currency contracts. At 31 January 2025, the Group was committed to:
As at 31 January 2025 | As at 31 January 2024 | As at 31 July 2024 | ||||
Buy | Sell | Buy | Sell | Buy | Sell | |
USD$'000 | 76,500 | - | 51,900 | - | 59,000 | - |
EUR€'000 | - | 39,400 | - | 29,700 | - | 34,000 |
PLN'000 | - | 1,400 | - | 600 | - | - |
CNY'000 | 3,512 | - | 5,453 | - | 4,483 | - |
At 31 January 2025, all the outstanding USD, EUR and PLN contracts mature within 12 months of the period end (31 January 2024: 12 months; 31 July 2024: 12 months). The CNY currency contracts, which are held as a partial hedge of a lease commitment, mature by August 2026. The forward currency contracts are measured at fair value using the relevant exchange rates for GBP:USD, GBP:EUR, GBP:CNY and GBP:PLN. The fair value of the contracts at 31 January 2025 is an asset of £2,070,000 (31 January 2024: £351,000 liability; 31 July 2024: £544,000 liability).
Forward currency contracts are valued using level 2 inputs. The valuations are calculated using the period end exchange rates for the relevant currencies which are observable quoted values at the period end dates. Valuations are determined using the hypothetical derivative method, which values the contracts based on the changes in the future cash flows, based on the change in value of the underlying derivative.
All of the forward contracts to buy US Dollars and some of those to sell Euros meet the conditions for hedge accounting, as set out in the accounting policies of the financial statements for the year ended 31 July 2024.
Derivative financial instruments - Interest rate swaps and interest rate caps
The Group has entered into interest rate swaps and interest rate caps to protect the exposure to interest rate movements on the various elements of the Group's banking facility. As at 31 January 2025, protection was in place over an aggregate principal of £8,527,000 (31 January 2024: £9,016,000, 31 July 2024: £8,900,000).
All of the interest rate swaps meet the conditions for hedge accounting, as set out in the accounting policies contained in the financial statements for the year ended 31 July 2024. Hedge accounting is applied in respect of the interest rate caps to the extent that their current valuation exceeds their amortised cost.
Interest rate swaps and caps are valued using level 2 inputs. The valuations are based on the notional value of the swaps and caps, the current available market borrowing rate and the swapped or capped interest rate respectively. The valuations are based on the current valuation of the present saving or cost of the future cash flow differences, based on the difference between the swapped and capped interest rates contracts and the expected interest rate as per the lending agreement.
13. Share Capital
| As at31 January 2025 | As at31 January 2024 | As at 31 July 2024 | |||
| £'000 | No. of shares | £'000 | No. of shares | £'000 | No. of shares |
Opening share capital Share buy-backs | 221 (2) | 88,628,572 (1,058,680) | 223 - | 89,312,457 - | 223 (2) | 89,312,457 (683,885) |
Closing share capital | 219 | 87,569,892 | 223 | 89,312,457 | 221 | 88,628,572 |
14. Related party transactions
| 6 months ended31 January 2025 | 6 months ended31 January 2024 | Year ended 31 July 2024 |
| £'000 | £'000 | £'000 |
Transactions with related companies and businesses: Lease payments to Heron Mill Limited |
194 |
194 |
388 |
Lease payments to Berbar Properties Limited | 90 | 90 | 180 |
Statement of Directors' Responsibilities
The Directors confirm that these consolidated condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, in accordance with UK-adopted international accounting standards. The interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
• material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.
For and on behalf of the Board of Directors
Andrew Gossage Chief Executive Officer 24 March 2025 | Chris Dent Chief Financial Officer 24 March 2025 |
Related Shares:
Ultimate Products