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Homeware group Ultimate Products is the latest consumer-facing firm to take a hit from the current challenging market conditions as revenues slide on weaker demand for general merchandise.
Shares in the group tanked by 23% to 78p on the back a negative trading update this morning.
Sales fell 5.7% to £79.4m in the six month to 31 January for the company behind brands such as Salter and Beldray.
Ultimate Products said that while market conditions in the UK remained subdued, international sales grew by 12% to £29.1m over the same period.
As expected, the group also suffered by a slowdown in air fryer sales as it lapped booming demand last year, with numbers down 46% year on year to £5.2m.
Despite the gloomy conditions, Ultimate Products said it started the second half with its order books up by an “encouraging” 24% year on year, led by strong forward orders from larger customers.
However, since the start of January 2025, the current challenging trading conditions faced by some of the group’s retail customers have impacted short-term sentiment and led to a moderating in the pace of new orders.
As a result, the group forecast flat revenues for the year, with EBITDA expected to be in the range of £14m to £16m.
“As expected, the first quarter of FY25 proved challenging, driven by subdued consumer spending, global shipping disruption, and the fact that we were lapping the tail end of the spike in air fryer sales last year,” said CEO Andrew Gossage.
“Looking ahead, we are cautiously encouraged by both the improved shipping rate environment and by the healthy order book that we have in place for the rest of the year, led by our international business. We therefore anticipate a stronger performance in H2. While upcoming cost pressures and the ongoing challenges faced by some of our retail customers inevitably create some near-term uncertainty, we remain confident in our medium-term strategy, particularly given the growing appeal of our brands to shoppers across mainland Europe.”
Morning update
AIM-listed reduced sodium salt maker MicroSalt has closed an oversubscribed £2.3m fundraising round.
It will use the money to build its inventory to support an expected growth in orders from snack makers and for marketing efforts for a newly launched quick service restaurant product.
CEO Rick Guiney said: “I am very optimistic on the upside potential for anticipated rapid growth in 2025, particularly at a time when governments are increasingly focused on initiatives to reduce sodium consumption in manufactured foods.”
This week in the City
The first earnings season of 2025 for big fmcg corporates gets underway this week.
Following speculation over a potential sale of Guinness, all eyes will be on Diageo tomorrow as the struggling spirits giant reports first-half results. Shares at the Smirnoff, Johnnie Walker and Tanqueray owner are languishing at a five-year low following poor performance and profit warnings, putting CEO Debra Crew under pressure.
Over in the US, PepsiCo and Mondelez are set to publish quarterly results for the final three months of 2024 on Tuesday.
Thursday brings Q4 and annual results from brewer Carlsberg and a Q1 trading update from catering giant Compass Group, along with the Bank of England’s latest interest rates decision. US firms reporting quarterly results later in the day include Amazon, Hershey and Philip Morris.
There are also updates from Kantar (Tuesday) and NIQ (Wednesday) on how the supermarkets fared in the post-Christmas period.
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