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Interim Results

25th Mar 2025 07:00

RNS Number : 9564B
Ultimate Products PLC
25 March 2025
 

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%

UK revenue down 13% to £50.4m, while International revenue increased 12% to £29.1m

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

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%

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 & nonrecurring 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

Consolidated Statement of Changes in Equity For the period ended 31 January

 

 

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

 

 

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