City round-up: Ultimate Products; Real Good Food; Evgen

Oldham-based homeware brands group, Ultimate Products, announced record results for the year to July 31, 2023, today (October 31).

Total revenues were up eight per cent to £166.3m, including online revenues of £41.4m, which was a 64% improvement, with strong growth in both the UK and Europe.

Profit before tax was four per cent ahead of last year, at £16m, and the full year dividend has been increased by four per cent to 7.38p per share.

The company reported strong cash generation from operating activities of £24.4m (FY22: £6.8m), representing a 121% operating cash conversion (FY22: 37%).

During the reporting period the group achieved the successful relaunch of Petra, the German kitchen electrical brand, into the German market and the renewal of its Russell Hobbs licensing agreement on a rolling four-year basis.

There has been continued investment in AI and robotics, yielding positive results, and supporting the operating margin. A robotics programme is now saving more than 1,000 hours of employee time every week, allowing the company to focus on higher value tasks.

Post period end Ultimate Products has opened its new European showroom in Paris.

The board said it anticipates that full-year performance for financial year 2024 will be in line with current market expectations. Net debt is continuing to reduce as the group de-levers following the transformational Salter acquisition at the end of FY21.

In the current environment of higher interest rates, the group’s low net bank debt/adjusted EBITDA ratio, combined with its interest rate hedges, provides both a competitive advantage and growing optionality in the use of free cash flow, it said.

Chief executive, Simon Showman, said: “This is a fantastic achievement for our business, particularly given the tough macroeconomic backdrop. Our homeware brands and products are used by households on a daily basis, and we have worked extremely hard to make sure that we maintain affordable prices for all consumers. We are hugely proud that we have achieved this despite persistent cost inflation.

“Our online business was a standout performer in FY23, particularly in the UK. I am confident that the experience we have gained in optimising this part of our business will be hugely valuable as we continue scaling our European ecommerce business, where sales are already growing strongly.

“In addition, we are confident that our recently opened Paris showroom will help us attract new retail customers in the French market, as well as across the wider European continent.”

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Real Good Food

Ahead of its annual general meeting this morning, Liverpool-based ingredients group Real Good Food, has issued a trading update for the year to March 31, 2024, that shows it is trading well, despite a slow start, as anticipated.

The cake ingredients business is entering its busy seasonal third quarter in the lead up to Christmas and it said the benefit from the successful implementation of the group’s radical programme of reform is tangible and is expected to boost profitability in the coming months.

For the first six months to September 30, 2023, revenues were two per cent up overall to £16.1m compared with the same period in the prior year (H1 23: £15.9m), reflecting the benefits of the pricing actions, albeit volumes were down circa 10% due to weak market conditions and exiting low margin sales.

Revenues in August and September were £1m ahead of the same months last year at £5.9m. Going into the second half, revenues in October are expected to be circa £4.6m, six per cent above October 2022.

More importantly, the unaudited EBITDA loss was much reduced at £700,000 for the period (H1 23: £2.3m loss). Gross margins, at 35.9% compared with 34.4% H1 last year, and 33.3% for FY23 full year, continue to improve due to price resets, more effective pass through of cost inflation – which continues – and self-help gains from improved cost efficiency. After distribution costs, margins were 26.6% for the first half compared with 22.3% H1 last year.

As previously stated, performance during H1 was constrained by supply issues and cash constraints, which the business is trying to resolve and it remains on track to deliver circa £8m of price resets, efficiency gains and cost savings for FY24.

The board, therefore, anticipates reporting a significant turnround for the full year with EBITDA in the region of £1m (FY 23: £5.8m loss) with an exit run rate of £3m to £4m EBITDA.

The group said it continues to finalise its agreement with Hilco Private Capital for a 12-month extension to its loan agreement with them and a further announcement will be made once the documentation has been completed.

The board expects to issue the group’s half year results to September 30, 2023 and an update on current trading in December 2023.

Executive chair, Mike Holt, said: “We have made substantial progress since this time last year when the group was really struggling. The radical reform programme has delivered significant benefits and recent senior management changes have also made a real difference. JF Renshaw is back on form and continuing to improve its performance. We are now focused on getting the group to a sustainable annual EBITDA level of £4m plus moving forward.”

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Barry Clare

Alderley Park-based drugs development company, Evgen Pharma, said its half year results, to September 30, 2023, are in line with expectations.

It recorded a post-tax loss of £1.5m, down from £2.1m at the same point last year, while cash outflow from operations was £1.3m, against £1.9m in 2022. Cash deposits, cash and cash equivalents balance on September 30, 2023, was £3.7m, compared with £7.2m a year previously.

The cash runway remains unchanged to the end of 2024 excluding further milestones from the Stalicla SA out-license agreement.

During the period the business achieved non-dilutive funding of circa €600,000 towards glioblastoma pre-clinical and clinical studies with Erasmus University Medical Center, in Rotterdam.

It also announced a collaboration with the University La Sapienza di Roma, Italy.

Post-reporting period, Evgen said discussions continue with its partner, Stalicla SA, on optimal design of the Phase 2 study in autism spectrum disorder.

Chief executive, Dr Huw Jones, said: “During the period substantial progress was made in characterising our commercial grade tablet formulation, further advancing our knowledge of the mechanism of SFX-01 and moving towards clinical studies in glioblastoma through non-dilutive funding.

“SFX-01 continues to show promise as a radio-sensitisation agent in serious cancers where radiotherapy is the mainstay of treatment. The recent results from our collaborators at La Sapienza in Rome confirmed the effect in vivo in models of rhabdomyosarcoma. This gives further strength to our hypothesis in glioblastoma where similar results were seen in models of this fatal brain cancer.”

He added: “Our chair, Barry Clare, retired during the period and the board would like to thank him for his long, dedicated service to the company. I’m grateful to Dr Susan Foden for agreeing to be our interim chair and also welcome Toni Hänninen as CFO.

“In conclusion, we continue to be well positioned to commercialise the potential of SFX-01 across various indications through our own studies and in many productive collaborations.”