Tough trading conditions take their toll on Ultimate Products’ annual figures

Oldham-based homeware brands group, Ultimate Products revealed both its revenues and profits declined in the year to July 31, 2024, due to challenging trading conditions.

Total revenues were down 6.5% to £155.5m (FY23: £166.3m), The company said, as previously flagged, the decline was due to supermarket ordering being held back by overstocking, weakened consumer demand for general merchandise, and strong prior year comparatives.

International sales increased seven per cent to £54.3m (FY23: £50.7m), driven by an increase in sales to European discounters.

The statutory profit before tax was down 10% to £14.3m (FY23: £16.0m).

The group said it enjoys continued strong cash generation from operating activities of £18.5m (FY23: £24.4m), representing a 103% operating cash conversion (FY23: 120%)

The full year dividend per share has been maintained at 7.38p per share.

During the reporting period the group opened its new European showroom in Paris, ideally located for hosting both existing and prospective customers across the region, helping to grow sales in France by 78% to £12m.

It also appointed Andrew Gossage as Chief Executive, taking over from the group’s founder, Simon Showman, who remains on the board as Chief Commercial Officer

And it appointed Christine Adshead as Non-Executive Chair, followed by the appointments post year-end of Andrew Milne and José Carlos González-Hurtado as new non-executive directors, bolstering the credentials of the board, it said.

Jill Easterbrook has formally stood down from the board.

Although weak UK consumer sentiment continues to hold back short term sales in the UK, the group said it is pleased to see growing momentum internationally, with strong demand for its homeware brands being driven by European discounters.

In addition, it said it is encouraged by the easing of the current margin headwind to freight rates.

Therefore, while UK trading remains challenging, Ultimate Products believes that gradually improving consumer sentiment and the significant opportunity in Europe will drive sales growth in the medium term, giving the board cautious optimism for the year as a whole and, hence, maintaining its expectations for the current financial year. 

Chief executive, Andrew Gossage, said: “This continues to be a challenging period for many consumer-facing businesses in the UK, and we are by no means immune from the overall slowdown in spending and weakness in consumer sentiment.

“However, our growth strategy of building international sales is yielding positive results. Our new showroom in Paris is proving to be instrumental in developing our presence throughout the hugely attractive European market, where we see significant opportunity with the discounters that are driving strong European sales growth in the current year.”

He added: “Against this backdrop, we are pleased to have delivered a resilient FY24 performance while making strong operational progress, including increased productivity through the automation of many of our processes and the rebrand of our two iconic principal brands, Salter and Beldray.

“Our proposition to retailers today is clear and compelling. We offer trusted brands, beautiful products, attractive price points, and outstanding operational capabilities. Despite current headwinds, we remain cautiously optimistic for FY25 as a whole and as confident as ever in our medium-to-long term prospects.”

Following the appointment of Andrew Milne and José Carlos González-Hurtado as non-executive directors, Andrew has been appointed Chair of the Remuneration Committee, while José Carlos has been appointed Chair of the ESG Committee.

In line with our medium-term succession planning, Robbie Bell, board member since March 2017, has been appointed to the role of Senior Independent Director.

Alan Rigby remains on the board and will continue to serve on Audit & Risk, Remuneration and Nomination committees.

Robbie will retain his position as Chair of the board’s Audit and Risk Committee and will continue as a member of the Nomination and Remuneration committees.