The owner of a number of leading homeware brands reported a record financial performance for the year to end July.
According to its market research, nearly 80% of UK households own at least one of the group’s products.
It was a year of exceptional financial and operational progress, made more notable against a backdrop of global supply chain and economic hassles.
Revenues were up 13% to a record £154.2m (£136.4m), while adjusted pre-tax profits were 42% better at £15.8m (£11.2m), taking adjusted earnings up 32% to 14.7p (11.1p), with a 42% improved dividend of 7.12p (5.02p) per share.
Whilst the current cost of living crisis represents a substantial challenge to all consumer-facing businesses, the group is well placed to respond to this given its relentless focus on delivering value and growth.
Energy efficient air fryers are doing very well
The UP Global Sourcing Holdings (LON:UPGS) group, which owns the Salter and Beldray brands, expects that current year profit performance will be in line with current market expectations.
The £128m capitalised company sells to over 300 retailers across 38 countries specialising in five product categories: Small Domestic Appliances; Housewares; Laundry; Audio; and Heating and Cooling.
Other brands include Progress (cookware and bakeware), Kleeneze (laundry and floorcare), Petra (small domestic appliances) and Intempo (audio).
It has recently renewed its licence with Russell Hobbs for non-electrical products.
Analyst Opinions – attractive 5.5% yield
Darren Shirley and Clive Black at Shore Capital Markets consider that the group “is very well positioned to deliver sustained growth across its four growth pillars, supported by ongoing investment in systems and human capabilities.”
Noting the current attractive yield for the shares at 5.5%, the brokers rate the equity as attractively priced.
Their estimates are for revenues for the year to end July 2023 are for £169.1m (£154.2m) and EBITDA of £20.0m (£18.8m) and adjusted earnings of 14.5p (13.8p) and a 7.2p (6.9p) dividend per share.
Conclusion – after a 50% two-week gain shares going higher yet
Having pushed this group’s shares two weeks ago (24 October) at just 95p, where we stated that they were far too cheap, it is very pleasing to note the market’s reaction on the results.
After hitting 147.52p at on time, they have since slipped back to 142.5p, but still showing a very useful gain in such a short time.
After allowing for some short-term profit taking, I see these shares going even higher yet.