Ultimate Products (ULTP) H2 2024 earnings summary

Executive summary

• Branded consumer goods model targets accessible prices near or just above own-label, using productivity to fund marketing and volume growth.

• Salter and Beldray accounted for 60% of revenue; owned brands represented 80% following a strategic shift toward brand-led growth.

• FY24 was pressured by retailer destocking, lower air-fryer sales and subdued UK demand; European expansion is the main near- to medium-term growth opportunity.

Financial highlights

• Revenue was £155.5m, down 6.5%; gross profit was £40.5m, down 5%, and adjusted EBITDA was £18.0m, down 11%.

• Adjusted profit before tax was £14.45m, down 14%; adjusted profit after tax was £10.63m, down 20%, and statutory profit after tax was £10.53m, down 16%.

• Adjusted EPS was 12.3p, down 20%; statutory EPS was 12.2p, down 17%; DPS was held at 7.38p.

• Air-fryer sales fell from £26m in FY23 to £15m in FY24; other sales increased £6.7m, partly offsetting the air-fryer and German supermarket headwinds.

Outlook and guidance

• FY25 international revenue is expected at 40%-45%, versus 35% in FY24; European order-book growth is accelerating into H2, with momentum expected to continue.

• UK demand is expected to remain a headwind in H1 FY25, with modest firming anticipated in H2; early green shoots appeared in near-term channels.

• £2m of elevated freight costs is expected to reduce gross profit in H1 FY25; rates have normalized and management views the cost as one-off.

• Admin expenses are expected to remain flat in FY25 as productivity initiatives offset wage and cost inflation, including an estimated £400,000 National Insurance impact.

• Online sales are expected to be broadly flat in FY25 and return to growth in FY26; timing for the 30% sales target depends on international mix.