Consumer products firm warns of China supply problems due to virus crisis
Oldham-based Ultimate Products warned today of supply chain issues in China due to the coronavirus epidemic.
In a trading upate for the six months to January 31, the low-cost consumer products group said it is closely monitoring developments with the coronavirus outbreak in China, where the majority of its manufacturing is based.
Factories across China have remained closed following the traditional Chinese New Year celebrations, in order to try and prevent the spread of the virus.
A board statement from Ultimate Products said: “The extension of the Chinese New Year holiday by nine days to today (Monday 10 February) in the group’s main manufacturing areas is expected to cause production delays.
“As further information becomes available, we will continue to evaluate any short, or long term impact on the group’s business and take all necessary action to mitigate any disruption.
“We have extensive experience of managing supply chain disruptions in China, including those caused by previous viral outbreaks.”
However, it added that the board currently expects full year profitability for financial year 2020 to be in line with market expectations.
The trading update said that in the six months to January 31, the group had experienced “a period of solid financial and operational progress”.
Unaudited group revenues increased by 2.8% (£1.9m) to £67.7m, compared with £65.8m in the same period last year.
The group renewed its exclusive trademark licence agreement for the ‘Russell Hobbs’ trademark in the UK and EU until March 2023. This spans a range of non-electrical kitchen and laundry products, but does not include Russell Hobbs electrical appliances.
It also successfully extended the group’s banking facilities to 2024, with funding headroom at January 31, 2020 of £13.2m. That compares with £10.1m at July 31, 2019, and £10.5m at January 31, 2019.
In addition, the group agreed terms on a 10-year lease extension at Manor Mill, its head office and second distribution centre in Oldham, Greater Manchester, in anticipation of planned investment in the site.
