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Online sales drive £21.6m gross half-year profits for Ultimate Products

Ultimate's Simon Showman

Oldham’s Ultimate Products, the owner of homeware brands including Salter and Beldray has seen online sales resurgent in its half-year results to January 31, 2023.

Online revenue was up 78 per cent to £22.9m, from £12.8m in H1 2022, which it said was helped by normalisation in the global supply chain.

The online surge was tempered by a drop in sales to retailers, down 11 per cent to £64.7m (H1 2022: £72.9m), which the firm put down to caution in forward ordering arising from post-COVID overstocks.

Overall, the group reported that total revenue for the period was up by two per cent, to £87.6m, which it achieved with no overall price inflation to keep products affordable resulting in a gross profit rise of three per cent to £21.6m, driven largely by the online sales growth.

Statutory profit before tax, meanwhile, slipped by five per cent to £9.3m, impacted by higher interest rates and the group’s head office investment increasing the depreciation charge.

The board has recommended a six per cent increase in the interim share dividend of 2.43p per share and said it has strong cash generation from operating activities of £12.8m, compared with used cash of £5m a year ago, representing a 114 per cent operating cash conversion.

Ultimate Products expects its annual 2023 performance to be in line with current market expectations, which are for revenues of £165.3m, adjusted EBITDA of £20.1m, and adjusted EPS of 14.8p.

During the reporting period, the group appointed its first dedicated brand director, completed the successful relaunch of Petra, the German kitchen electrical brand, into the German market, renewed its Russell Hobbs licencing agreement on a rolling four-year basis and launched its inaugural ESG Strategy.

It also invested in robotics, yielding positive results, with hundreds of tasks now automated and has begun the journey to diversify its supply chain.

Chief executive, Simon Showman, said: “We have delivered a robust performance, with exceptional growth from online, amidst a tough trading environment. Our amazing team has built a resilient and scalable business, based on a strong portfolio of homeware brands with a wide range of products and channels to market.

“The business has been tested by some of the toughest trading conditions and headwinds seen in recent times, but we are emerging stronger, more focused and more profitable than ever. We remain confident in the future prospects for Ultimate Products.”

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