Ultimate Products (ULTP) Trading Update summary

Trading performance and outlook

• Revenue rose 3% year-on-year in February–May 2025, while lower-margin sales kept gross margin flat and adjusted EBITDA unchanged at £3.6m.

• FY25 revenue is expected to be ~4% lower year-on-year, with adjusted EBITDA forecast at ~£12.5m versus £14.3m consensus.

• Over £4m of customer orders, including European launches, shifted from Q4 FY25 to Q1 FY26, weighing on near-term revenue.

• FY26 is expected to start slowly, with revenue projected below FY25 and the order book down 7.5% year-on-year; management flagged a cautious outlook.

Markets and margins

• European sales are growing, but declining U.K. core business is limiting the benefit; European business is typically lower margin.

• FY25 gross margin is expected at ~23%, versus 25% last year and a usual blended-rate expectation of ~24%.

• Lower-margin mix reflects category, customer/channel and geographic shifts, alongside fewer one-off, higher-margin clearance sales; European growth is supported by retailer relationships and launches.

Cash, costs and priorities

• Analysts expect FY25 year-end net bank debt of ~£18m; working capital is elevated by ~£4m from deferred orders and ~£5m from Red Sea disruption.

• Free stock was ~£9.6m versus a typical £10m–£12m level; sold stock is expected at £16m–£17m at FY25 year-end.

• Peak debt/EBITDA is expected at 1.8x versus covenants around 3x; forecasts remain comfortably within covenants, which are tested quarterly.

• Priorities include greater sales investment, training, data and technology use, and improved sales processes to secure more listings and improve execution.

• Automation, RPA, AI and the new PIM system support productivity; improved factory pricing and currency rates are expected to benefit FY26, increasingly toward Q4.