City round-up: DSW Capital; Yourgene Health; Ultimate Products

Daresbury-based business advisory firm, DSW Capital, said it continued to trade strongly in the first half of its 2023 fiscal year, in a half year update to the end of September 30, 2022.

It said network revenue rose 34.2% to £9.8m, compared with the same period a year ago, which resulted in total income from its licensees in the period of £1.6m, up 40% compared with the same period in the prior year, which has more than covered the ongoing cost of being on AIM, resulting in adjusted pre-tax profit of £0.9m, against £0.8m a year ago.

Adjusted pre-tax profit excludes IPO costs and share based payment charge.

Fee earners increased to 93 by September 309, up 5.7% since the full year end, as the group continued to benefit from its heightened profile following IPO and its investment in central resource.

Demand for the DSW Network’s services, which are primarily SME-focused, remained strong throughout the period, against a backdrop of reducing deal volumes across the wider market. As a result, Dow Schofield Watts moved up Experian’s rankings to 10th Most Active Corporate Finance Advisor in the UK in the first half of 2022, compared with 13th in the first half of 2021.

The board, headed by chief executive James Dow, said it is pleased with the first half performance and believes current trading, against a backdrop of wider economic uncertainties and the potential effect of this on SME activity, is on track to achieve market expectations for the year ending March 31, 2023. Since the period end, the group has welcomed a new wealth planning partner and activity levels have been consistent with the board’s expectations.

DSW’s interim figures are expected to be published on December 1.

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Lyn Rees

Yourgene Health, the Manchester biotech group, has seen interim revenues fall, as it exits COVID services, post-pandemic, saying this will be a year of transition for the group.

Core revenues in the period to September 30, 2022, ie excluding COVID-related activities, were £8m, compared with £7m a year ago, an increase of 14%. Total revenues, on a statutory basis, were £9.6m, down from £17.5m, reflecting the transition away from COVID services post-pandemic, and in total representing more than 40% of consensus market expectations for the full year which is consistent with the historical H1 / H2 pattern.

The group said its year-to-date performance and healthy commercial pipeline supports unchanged management revenue expectations for the year as a whole. In line with other businesses in the UK facing inflationary and economic pressures and currency fluctuations, the company is experiencing some erosion to margins which will only partially be offset by existing measures to mitigate these effects.

The company has prioritised expanding market share in its core markets above near term margin protection and, therefore, expects margins to remain below the 60% level previously forecast for the remainder of the financial year.

In line with previous announcements, the company remains on track to reduce its operating costs by £5m, approximately one third, in the current financial year when compared with financial year 2022, excluding restructuring expenses. To mitigate the margin pressures, the board continues to assess its cost base in the context of its pipeline of commercial partnerships and discretionary investment options.

The board said it is confident that it can further reduce operating costs to achieve positive adjusted EBITDA in the next financial year, and can exercise control over discretionary spending and working capital to manage the group’s financial position. The necessary decisions will be taken as commercial progress in the second half of the financial year becomes clearer.

Chief executive, Lyn Rees, said: “This continues to be a year of transition for Yourgene, with encouraging delivery of top line performance in the first half creating a solid base for expected future growth.

“It is particularly pleasing that the core business has shown improved momentum in such difficult macroeconomic conditions. Whilst margins have been impacted by the current external environment, we are continuing to reshape the business and are evaluating the best ways to manage costs without constraining future growth where possible.

“The year-to-date performance informs the board’s confidence in the business remaining on track to deliver full year revenues in line with expectations and to prioritise market penetration over near term EBITDA delivery. Yourgene remains well placed to exploit the opportunities available to its growing portfolio of genomic products and services and, with additional partnerships in place and being added, is expanding its market access to create significant strategic value.”

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Simon Showman, Ultimate Products founder and CEO

Oldham consumer goods group, Ultimate Products, reported record annual revenues today.

Turnover for the year to July 31, 2022, was 154.2m, a 13% improvement on the previous year. Statutory profit before tax was up 62% to £15.4m. The group had facilities headroom at the end of its financial year of £17.8m, compared with £16.2m in 2021.

A full year dividend per share of 7.12p has been recommended, which is a 42% improvement on the previous year.

During the reporting period the Salter acquisition was fully integrated, and is significantly earnings enhancing. The German kitchen electrical brand, Petra, relaunched and first retailer orders for fiscal year 2023 were received.

The business managed the impact of the global shipping crisis and associated supply chain challenges, and a major robotics process automation programme was launched in the fourth quarter.

The refurbishment of the office and showroom at Manor Mill, the group’s headquarters in Oldham, was completed, including the installation of 1,150 solar panels on the roof, which is expected to produce 40% of the building’s energy requirements.

Post period end, the group has renewed the Russell Hobbs licencing agreement, for non-electrical kitchen and laundry products, on a rolling four-year basis, rather than the previous fixed-term arrangement

The board said it anticipates profit performance for 2023 will be in line with current market expectations. While the current cost of living crisis represents a substantial challenge to all consumer-facing businesses, the group said it is well placed to respond to this given its relentless focus on delivering value and growth.

Simon Showman, chief executive, said: “In FY22 Ultimate Products has delivered record financial results, seamlessly integrated the Salter brand, and maintained the incredibly high levels of service that our customers have come to expect from us. It has been a year of exceptional financial and operational progress, all of which was achieved against the backdrop of global supply chain disruption and a deteriorating macroeconomic environment.

“It is pleasing to see that our energy efficient products, such as air fryers, are performing well and helping consumers save on energy costs. This aligns with our wider purpose of providing beautiful and more sustainable products for every home.”

He added: “Whilst the current cost of living crisis represents a substantial challenge to all consumer-facing businesses our proven resilience and adaptability, as well as the quality and value of our products, mean that we are well placed to continue delivering future growth.”