Weak domestic trading hits first half performance for Ultimate Products

Ultimate Products, the Oldham-based homeware brands group, suffered from weak domestic trading in its first half period to January 31, 2025.

Unaudited revenues in the interim period fell from £84.179m in 2024 to £79.484m, while pre-tax profits fell from £9.487m to £5.075m.

The interim dividend has been cut by 37% to 1.55p per share in line with the company policy of returning around 50% of post-tax profits to shareholders through dividends.

Cash generation from operating activities was £1.1m, against £14.4m in the first half of 2024, with increased investment in working capital following longer shipping times caused by Red Sea disruption resulting in £9.4m of additional inventory.

The group said it saw its UK revenues reduce by 13% to £50.4m, although international revenue increased 12% to £29.1m.

It experienced weak UK consumer demand and the anticipated impact of lower air fryer sales partially offset by encouraging international sales growth with strong demand from European discounters (+39%), demonstrating the strength and progress of the group in this core strategic market.

It reports an improving sales trend, with Q2 sales down 2.2% year-on-year, representing an improvement on Q1 sales, which were down 9.3%.

Regarding its second half performance, the group said it is trading in line with revised market expectations for FY25.

The strong growth in Europe continues to be offset by weak UK trading, however, resulting in an expected flat topline performance for the year, with sales forecast to return to growth in the second half of the year.

As it sees the benefits of the normalisation of freight rates and its use of automation offsets operational cost inflation, the business expects to see improved operating margins during the second half of the year, resulting in a full-year adjusted EBITDA in line with market expectations.

CEO, Andrew Gossage, said: “The UK trading environment has undoubtedly been challenging, and this has inevitably impacted our H1 performance.

“However, growing traction in Europe, driven by strong demand from discounters, continues to offset some of this weakness and reinforces our view that we have significant growth opportunities within that market.

“Our core brands of Salter and Beldray have been resilient and remain central to our strategy, with a brand transformation of Beldray under way to strengthen its market presence and broaden its appeal.”

He added: “We are confident that our strategy is delivering long term benefits for the business and continue to focus on operational excellence and efficiency.

“Our ongoing investments in automation and AI are driving significant productivity, enhancing our ability to serve customers.

“This exciting work is increasingly being initiated by our graduates, who continue to astound with their problem solving ideas. By maintaining our strategic focus and continuing to strengthen our position in Europe, we are well placed to drive sustainable long term growth.”