The underlying sales growth evident in UP Global Sourcing Holdings’ (UPGS) maiden full-year results reflects the effective execution of its four-point strategy. The consumer goods group is looking to grow commercial activity with discounters and supermarkets, while building its online business to account for 20 per cent of revenues. Management is also intent on growing the business internationally, with a particular focus on Germany, as evidenced by “a number of major retail accounts now open” and plans to open a showroom in Cologne next year. Revenue growth over the year suggests that inroads are being made – sales to discounters across the UK and Europe are up 64.6 per cent to £63.8m, while sales to supermarkets increased 95 per cent to £10.3m and online platforms were up 63.6 per cent to £4.6m.
However, the good times can only last so long and macroeconomic uncertainty – and sterling depreciation – stemming from Brexit, along with tough trading conditions are hitting general merchandisers hard. The group foreshadowed that revenues were unlikely to grow in FY2018, with up to £5m pushed back to 2019 to reflect a change in shipping arrangements.
Analysts at Shore Capital are forecasting that this will lead adjusted EPS to drop to 7.8p for the July 2018 year-end, recovering slightly to 9.1p in FY2019 (down from 10.4p in 2017).
| UP GLOBAL SOURCING HOLDINGS (UPGS) | ||||
| ORD PRICE: | 95p | MARKET VALUE: | £78m | |
| TOUCH: | 95-96p | 12-MONTH HIGH: | 228p | LOW: 77p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 8p | NET DEBT: | 88% | |
| Year to | Turnover | Pre-tax | Earnings | Dividend |
| 31 Jul | (£m) | profit (£m) | per share (p) | per share (p) |
| 2014 (9-mth Apr Y/E)* | 40.1 | -0.2 | na | nil |
| 2015 (15-mth)* | 76.8 | 4.4 | na | nil |
| 2016 (restated)* | 79.0 | 6.3 | 6.6 | 3.32 |
| 2017 | 110 | 7.4 | 7.2 | 5.115 |
| % change | +39 | +19 | +9 | +54 |
| Ex-div: | 04 Jan | |||
| Payment: | 30 Jan | |||
| * Pre-IPO figures | ||||
