City briefs: Ultimate Products; Convatec; James Fisher
Ultimate Products has suspended its interim dividend as part of a range of measures to preserve cash.
The Oldham-based group, which designs and distributes low-cost consumer products, had achieved revenue and profit growth in the first half of its financial year, before the economic impact of the coronavirus took hold.
Chief executive Simon Showman warned “these are extremely challenging times for any business in the general merchandise sector”.
Ultimate Products increased revenues by 2.8% to £67.7m in the six months to January, with international revenues increasing more sharply. Pre-tax profits were also up, rising 3.5% to £6.0m.
Showman said: “We take confidence from the fact that Ultimate Products has proved itself time and time again to be a hugely adaptive, resilient and flexible business that is capable of trading its way through the most challenging of environments.
“The business is well capitalised with a strong balance sheet and good access to funding, and we believe that there may be attractive growth opportunities for Ultimate Products as we emerge from this crisis. As a result, despite the short-term uncertainty we remain confident in the long-term prospects of the business.”
Convatec’s share price rose 5% on opening this morning after it pubished an upbeat trading update.
The FTSE 250 company, which supplies medical products internationally, has seen its share price enjoy a V-shaped recovery in recent weeks.
It reached a year-high of 225p in mid-February, before plummeting to below 150p a month later. However it has now recovered almost all of its lost ground, and was above 210p in early trading today.
Investors were buoyed by its “robust” first-quarter financial results, with revenues up 6.9% to $460m (£370m).
Convatec’s chief executive Karim Bitar said: “We are maintaining our 2020 guidance; however, it is clear that risks across the business have increased and the operating environment contains a greater level of uncertainty and volatility in the months ahead.
“Nevertheless, and whilst we still have much to do, the Group is performing, both operationally and financially, and we will continue to focus on executing against our clear strategy and priorities.”
James Fisher has withdrawn its financial guidance for the current financial year ahead of its AGM later today.
The group has reaffirmed it has “a strong balance sheet and good liquidity”.
However it acknowledged “it is impossible to forecast with any reliability” what the impact of the Covid-19 crisis will have and how quickly its businesses will recover.
It has furloughed 400 staff, and deferred 20% of pay for 800. The group has also put in place a hiring freee, deferred all discretionary capital expenditure and suspended its final dividend.