Consumer goods business signals growth prospects with local recruitment drive

Oldham consumer goods specialist Ultimate Products announced it is reinstating dividend payments and will commence a recruitment drive, today.

It also revealed that its current order book is ahead of comparable levels this time last year.

In a pre-close trading update for the year to July 31, the group said unaudited group revenues were down 6.1% to £115.7m, reflecting order cancellations and deferrals due to the COVID-19 pandemic – albeit offset by strong growth in sales to supermarkets and online channels.

UK and international online revenue were up 47.2% to £16.7m, accounting for 14.5% of total group revenue, compared with 9.2% last year.

The group’s top two customers accounted for 26.0% of its revenue, against 34.8% a year ago.

Unaudited underlying EBITDA, excluding the credit from the COVID-19 Job Retention Scheme, was down 3.3% to £10.4m, and unaudited underlying profit before tax, excluding the furlough credit, was down 2.7% to £8.2m.

The group said it maintains comfortable levels of headroom within its bank facilities, with headroom at July 31, 2020, of £21.3m, compared with £10.1m on July 31, 2019. The group continues to operate well within its banking covenants

It announced this morning that it is reinstating the suspended interim dividend, with 1.16p per share (FY19: 1.16p) payable on October 9, and is recommencing the previously stated dividend policy of distributing 50% of the group’s adjusted profit after tax.

Today’s statement revealed that the group’s 2021 order book is ahead of this time last year.

As announced on August 24, the business has decided to repay the £465,237 that it has received under the Coronavirus Job Retention Scheme – furlough scheme – and does not intend to make any further claims under the scheme or for the associated Job Retention Bonus.

In addition, the group is no longer using the Government Time to Pay and VAT deferral schemes.

All VAT and PAYE payments are up to date as at July 31, 2020. These payments are possible because the group’s profitability and cash generation have been stronger than expected during this crisis.

In light of the resilience, adaptability and versatility that the group has shown during 2020, the board said it remains confident in the long-term prospects for Ultimate Products, despite the continuing short-term uncertainty.

Chief executive, Simon Showman, said: “Given the significant challenges that COVID-19 initially caused for our business, I am delighted with the resilience of the performance that we have delivered in FY20.

“It is a clear testament to the strength and flexibility of our business model, as well as the ability of our people to improvise, adapt and overcome when faced with any challenge.

“It has been humbling to see the way that our teams have worked tirelessly to ensure that it has remained business as normal for Ultimate Products, despite a trading environment that has been anything but normal.”

He added: “The consumer response to our brands has continued to strengthen, particularly via supermarket, online and international channels.

“Despite the challenges of COVID-19, we have continued to provide a high quality service to our customers and to develop our product range.

“Notwithstanding the ongoing economic uncertainty, we remain confident in the long-term prospects for Ultimate Products.”

The group has also announced a local recruitment drive today, aimed at filling new roles across its two Oldham sites, Manor Mill and Heron Mill.

The recruitment drive forms part of the group’s ongoing ‘local jobs for local people’ initiative.