According to its market research, nearly 80% of UK households own at least one of this group’s products.
Founded in 1997, the UP Global Sourcing Holdings (LON:UPGS) group which trades as ‘Ultimate Products’, is the owner, manager, designer and developer of an extensive range of value-focused consumer goods brands.
The Ultimate Products business
The Oldham based group’s products are sold to a broad cross-section of both large national and international multi-channel retailers as well as smaller national retail chains, incorporating discount retailers, supermarkets, general retailers and online retailers.
Manor Mill, which is the head office in Greater Manchester, includes a spectacular 20,000 sq ft showroom that showcases each of its brands.
The £84m capitalised company, which employs over 370 staff, has its design, sales, marketing, buying, quality assurance, support functions and warehouse facilities across two sites.
In addition, it has an office and showroom in Guangzhou, China and in Cologne, Germany.
The company’s products and its top brands
Ultimate Products sells to over 300 retailers across 38 countries.
It has five major product categories: Audio; Heating and Cooling; Housewares; Laundry; and Small Domestic Appliances.
Its brands include Beldray (laundry, floor care, heating and cooling), Intempo (audio), Salter (kitchenware), Petra (small domestic appliances), Kleeneze (laundry and floorcare), and Progress (cookware and bakeware).
In the company’s 2021 trading year on a sales per business basis 35.7% of the group total was small domestic appliances, 26.3% housewares, laundry was 12.6%, audio accounted for 11.3%, heating and cooling was 5.1%, while others represented 8.9%.
On a sales per region basis the UK was 68.1%, rest of Europe 20.3%, Germany 10.2%, the US 0.5%, while the rest of the world was 0.9%.
Insiders have a 39% equity stake
There are some 89.3m shares in issue, of which four of the group’s directors’ control nearly 39% of the equity, while the Employee Benefit Trust holds another 3.41%.
Other large holders include Schroder Investment (15.2%), Ennismore Fund (9.14%), Hargreaves Lansdown Stockbrokers (1.86%), Canaccord Genuity Wealth (1.46%) and Hargreaves Lansdown Asset Management (1.21%).
Annual results due next week
The group is due to announce its results for the year to end July on Thursday 3 November.
The figures for the July end 2021 year were £136.4m sales, £11.2m adjusted pre-tax profits, earnings of 10.6p and paying a 5.0p per share dividend.
We have already had a Pre-Close Trading Update guiding for £154.2m (up 13%) sales for the 2022 year and generating an underlying pre-tax profit of £15.8m (up 42%).
Apparently, the current trading for the year to end July 2023 is in line with market expectations.
The announcement last week that the group has renewed its licence agreement with Spectrum Brands, which enables the use of the Russell Hobbs brand on certain non-electrical goods for another four years – which is seen by observers to be a very positive development.
Analyst’s opinion
Analysts Clive Black and Darren Shirley at Shore Capital have estimates out for the group to report revenues for its 2022 year of £161.4m, with £15.7m profits and earnings of 13.8p as well as a 6.9p dividend per share.
For the current year Shore Capital has £172.7m sales, £17.0m profits, worth 14.5p in earnings and covering a 7.3p dividend per share.
Over at Equity Development its analysts Chris Wickham and Hannah Crowe have noted that the group’s success in taking brands under full and greater control is an important component of the company’s ongoing transformation from being a sourcing company to an outright brand manager.
With fairly similar estimates on its corporate success the two analysts have put out a ‘fair value assumption for the group’s shares of 250p each.
Conclusion – these shares are far too cheap and are ready to rise
Ahead of next week’s results announcement it looks to me that the current share price of only 95p is far too cheap.
The shares were up to 222p this time last year, since when the group has strengthened, not weakened, its story.
I would suggest that an early rise to trade around the 125p level is more than possible, before more good news becomes available and helps to lift the share price even higher.