Tough retail market dents Ultimate’s profits

ULTIMATE Products has announced as 40% drop in earnings to £4.1m in the 12 months to July 31 (2010: £6.8m)  as sales fell slightly to £77.9m (£78.3m).

The Oldham-based company, which sources branded products for retailers, said that its results reflected the increasingly challenging nature of the UK retail market.

The company designs, sources and supplies around 5,000 products for major multiple retailers including Argos and Tesco.

Chief executive officer Simon Showman said: “Last year was a challenging period for UK retail, which had to react to a sharp fall in consumer confidence and spending as the government’s austerity measures and unemployment impacted on household budgets.”

He argued that the company’s proposition of value-for-money products meant that it is “more resilient than ever”, but said that the outlook for the UK continued to remain sluggish. The firm is proposing to combat this by targeting more deals with overseas retailers. It has set a target of achieving 50% of sales overseas by 2014 and recently landed accounts with French retail giant Carrefour, as well as its first deal in India.

“We have already successfully driven sales growth in our core export markets of US, Americas, India, Europe, Australia and the Far East where we have a major opportunity to grow market share and offset slower domestic growth.”

The company is backed by private equity form LDC following a £25m management buyout led by Showman in 2005.