Newly-listed firm puts brave face on EBITDA shortfall

Ultimate Products chief executive Simon Showman, left, with managing director managing Andy Gossage

Shares in Oldham-based Ultimate Products Global Sourcing, the developer of an extensive range of consumer goods brands, have tumbled in value by more than 40% after it said its EBITDA will be “below expectations” as it prepares to complete its first year as a listed company.

EBITDA for the whole year is now projected to be £6m and £7m, which the company said was less than originally forecast for FY 2018.

H1 revenue to January 31 was £48.4m, compared to £68.1m for the same period the prior year.

UP said it anticipated the revenue decline during the period which was driven by ongoing challenges in the general merchandise retail market and the resulting continued caution from customers on placing orders, and the one-off impact of between £4m to £5m of revenue as a result of the move from free on board to landed arrangements with a key European customer.

Chief executive Simon Showman said: “These are tough market conditions for the general merchandise sector and we, like many others, are having to adapt to a more uncertain environment for both retailers and consumers.

“However, we are encouraged with the progress that we are making in many areas of our business.

“Of particular note is our expanding German operation, which is progressing ahead of expectations with a number of major retail accounts open and our new showroom due to open in April.

“While the short-term outlook for the second half of this financial year is undoubtedly challenging, we are pleased with the pipeline of new business opportunities that is already in place for FY 2019, and in particular the strong order conversion that we are seeing with UK supermarkets for Autumn Winter 2018.

“This, combined with both the strength of our balance sheet as well as our continued belief that Ultimate Products provides a fundamentally compelling proposition to both consumers and retailers alike, means that we continue to feel well placed to deliver growth and success in the longer-term.”

The group maintains comfortable levels of funding flexibility with headroom at January 312 of £8m.

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