The newly listed shares of UP Global Sourcing (UPGS) - which trades as Ultimate Products - flirted with the 185p mark after the company revealed stellar revenue growth in the first half, primarily driven by a distribution focus on UK supermarkets and discounters as well as an online push.
The consumer goods company - which owns kitchenware and other household brands including Progress, and has licences for Russell Hobbs and Salter - floated in March at 128p. The £50m raised at the IPO has been used to pay off selling shareholders, rather than to pay down debt. So period-end net debt of £10.2m won't have changed materially after the IPO - bosses are "comfortable" with the current level of leverage, at 0.9 times underlying cash profits.
Of the uptick in sales, discount retailers in the UK and Europe accounted for £19m, UK supermarkets for £5m and online platforms £1.3m. Currency movements took a toll on UP's margins as it buys around 40 per cent of its supplies in US dollars and then sells mostly in sterling. The company is focused on pushing further into international markets, especially China and the US, and strengthening the company's online presence.
Analysts at Shore Capital expect adjusted pre-tax profits of £10m in the year to July 2017 and EPS of 9.5p, up from £7.5m and 7.1p in FY2016.
| ULTIMATE PRODUCTS (UPGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 177p | MARKET VALUE: | £145m | |
| TOUCH: | 175-179p | 12-MONTH HIGH: | 185p | LOW: 145p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 7.5p | NET DEBT: | 165% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016* | 42.0 | 3.9 | 1,662 | nil |
| 2017 | 68.1 | 6.7 | 2,812 | 1.62 |
| % change | +62 | +72 | +69 | - |
Ex-div: 6 Jul Payment: 28 Jul *UP listed in March 2017. EPS prior to share subdivision on IPO | ||||
