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Bob,
UPGS has a market positioning that should hold up better than most, even in a prolonged recession.
There may be concern over the supply chain because UPGS has its factory in China, however, they proved very adept at managing this through Covid.
I suspect it is not specific to the company and more the general shift away from equities due to expectations of a broad correction.
I have confidence in the management and as you mentioned, insiders are buying, which should add to our confidence.
My view is that UK stocks are less inflated than those on American exchanges and they may not have much further to fall, so I intend to gradually buy more of these.
I was just wondering if someone could enlighten me as to any possible cause as to the recent decline in share price of late despite overall great results, and then the same trend today after the announcement of these sizeable in-house share purchases from this month. Is it just because this is a retail sector and the potential impact on the rising costs of living etc?
Thank you anyone for taking the time to respond.
Gratefully.
Rob
sp drifted down from over 200p against the backdrop of record revenue etc..... value gap here now should be closed (sp back to 200p+) here as UPGS continue to show they are a well run business :-)
A 13% increase in net sales revenue to a record £154.2m, a 41% increase in EBITDA to £18.8m (also a record) and an underlying 1.3x net debt/EBITDA ratio were notable features of a pre-close trading update released by UPGS today. Moreover, FY2023 appears to have started well. With strong momentum in both reported sales and profits, as well as significant tangible progress within group operations, we maintain our fair value assessment of 250p per share.
While UPGS’s reported sales revenue growth benefited significantly from the acquisition of Salter in June 2021, the company’s 1% organic growth (which lapped a tough comparison in FY2021 when houseware sales benefited from COVID19 related lockdowns) should be seen positively. In addition, the company continues to make important progress in the supermarket channel where its success as a brand manager is arguably more critical.
UPGS’s profitability benefited not only from the acquisition of Salter but also from improved margins, which we infer to be a combination of higher gross margins and a better overheads performance. Importantly, the company remains committed to operating at best practice in terms of cost management.
Supermarkets were reported to be the stand-out performer of UPGS’s four strategic pillars of distribution. But as the well-recognised supply chain headwinds facing importers of manufactured consumer goods ease, scope for online to return to growth should improve.
The current share price fails to reflect three salient growth drivers of the business, in our view. These include UPGS’s ability both to manage and acquire key brands, the development of more supermarket and online business and its international opportunity. The company’s proven ability to cope with external headwinds should also be noted. We base our 250p fair value on an FY2023 EV/sales ratio of 1.5x and 12x EV/EBITDA.
Link to full note: https://www.equitydevelopment.co.uk/research/upgs-record-sales-and-profits-in-fy2022
Nature of the market I guess. I think this could move around a bit until the next set of results. If they are solid (not expecting out performance) then we will likely rise a little as nerves calm. This share is one to stick away and pick up more cheaply if you get an opportunity. The market can throw up some silly prices for things at times.
https://twitter.com/surprised_trade/status/1539502967606370304
113p...dropped from over 200p+ to current sp on general mkt drop and 'priced in' a large profit warning, where to date none has happened...April Interim - Profit before taxation up 36.4% to £9.8m .
UPGS today announces two important steps forward in relation to the company’s direct to consumer and online offering. UPGS has purchased the Salter.com domain name for Salter measuring devices and will soon complete an overhaul of the Beldray.com web portal. Arguably, both steps will help the company to achieve its objective of transacting 30% of sales online.
The company's shares continue to trade in line with its peer group’s average on both EV/sales and EV/EBITDA. However, there are clear discounts in terms of P/E ratio and dividend yield which arguably reflects UPGS’s superior profitability and cash generating capabilities. The company specifically targets a 50% dividend pay-out ratio or 2x cover.
Being adaptable to changes outside of its control enabled UPGS to navigate significant headwinds in the past two years – notably COVID-19 and prolonged lockdowns. The company continues to manage supply chain complexities associated with Chinese manufacturing and occasional import bottlenecks at UK ports. UPGS’s ability to counter such headwinds without issuing any profit warnings should also be noted, setting it apart from some of the peers listed in our comparable valuation, and seen as positive for valuation. We base our 250p fair value assumption on an EV/sales ratio of 1.6x and 13.4x EV/EBITDA.
Link to research note: https://www.equitydevelopment.co.uk/research/reinforcing-the-online-offering
Simon Showman (CEO), Andrew Gossage (Managing Director) and Graham Screawn (Finance Director) conducted an investor presentation on 5th May 2022 and answered questions following the recent release of their Interim Results.
They discuss the ongoing supply side challenges and how they have successfully mitigated them to deliver in line expectations, and they examine how they will navigate the demand side challenges as household budgets are squeezed.
You can watch the full video (approximate length 55 minutes) below, which has been dividend into chapters for ease of viewing:
0:00:03 company overview (Simon Showman, CEO)
0:02:00 Interim Results highlights (Simon Showman, CEO)
0:18:18 Financial Review (Graham Screawn, Finance Director)
0:32:00 Strategy & Outlook (Andrew Gossage, Managing Director)
0:47:12 Questions & Answers
Video Link: https://www.equitydevelopment.co.uk/research/upgs-interimsresults-investorpresentation5may22
I agree re the 250p.......but don't think the market will let it get there currently. Company has performed well in a difficult environment. Not many can say that. European opportunity is significant. In 5-10 years we should see a company that is at least 50% more profitable, in all likelihood twice as profitable as it is now. A solid hold for me at present, with a decent dividend whilst you wait for the growth.
Ultimate Products interim FY2022 results show a company that is creating shareholder value through its core activities. Sustainable sales growth, higher margins, positive cash flow and a 50% dividend pay-out should combine to generate earnings accretion and multiple expansion. UPGS is a brand-driven, international business, which is reinvesting in its operating practices. In our view, the share price does not reflect this and clearly lags our revised 250p fair value.
At 250p, UPGS would trade on an EV/sales ratio of 1.6x and 13.4x EV/EBITDA. Both multiples look appropriate for a branded consumer goods company with visible organic growth and a clear competence in acquiring and accelerating brands.
https://www.equitydevelopment.co.uk/research/upgs-shareholder-value-at-its-core
Ultimate Products, the owner, manager, designer and developer of an extensive range of value-focused consumer goods brands, will be conducting a live presentation following the release of their Interim Results.
The event will take place at 3.15pm on Thursday 5th May 2022.
The online presentation will be hosting by the management of UPGS and is open to all existing & potential shareholders. Questions can be submitted during the presentation and will be addressed at the end.
You can sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/upgs-investor-presentation-5may22
Financial and operational overview
· Unaudited Group revenues increased by 13.7% (£10.4m) to £85.7m (H1 FY21: £75.4m)
· Salter performing well and in line with plan following its acquisition in July, and is expected to be significantly earnings enhancing in FY22
· Supermarkets will potentially surpass discounters as the Group's largest channel in FY22, driven by strong organic growth and the Salter acquisition
· Recently opened new distribution centre capacity in the Netherlands in partnership with a longstanding third party provider; will assist the European roll out of the Group's online business, in line with its previously stated objective of growing revenues via this channel to 30% of total revenues over the medium to long-term
· Supply chain challenges remain heightened, but have recently shown signs of improvement
#UPGS’s achievement of 13.7% revenue growth in the first half of FY2022 and anticipation of full year growth in line with current expectations implies close to a 20% advance in sales revenue this financial year. Moreover, growth sustainability should be supported by a combination of effective brand management and enlarged distribution capacity. The company should also be credited with its ability to record steady revenue growth despite supply chain headwinds. There is now cautious optimism that the worst is behind the Group.
We retain our fair value of 275p per share for UPGS. Were the shares at this level, EV/sales would expand to 1.6x and EV/EBITDA to 14.0x - representing a premium to the company’s peer group. But such premiums are justified, in our view, by the demonstrable effectiveness of UPGS's leading brands, notably in the supermarket and online channels. Full note here: https://www.equitydevelopment.co.uk/research/upgs-on-track-to-scale-new-revenue-heights
General market conditions - this is a smaller company, heavy reliance on China for supply of goods to sell. Markets fell back and something like this (relatively small share turnover) will always suffer when the market is under pressure. Great business with an improving track record. I won't be selling anytime soon. Dunelm had a great set of results and B&M looking good, so there should be some good read through.
Can anyone tell me what’s happening here with this massive drop?
Hardly mentioned - well run, up with events. I'm LTH averaging 66p.
#UPGS discussed by Richard Leonard in latest PIWORLD interview:
37m22s
https://www.piworld.co.uk/education-videos/piworld-interview-with-richard-leonard-winners-and-losers-of-2021/
Quite volatile....yoyo share
In case you missed it, you can watch our webinar with Ultimate Products (UPGS) – 17 November 2021 here: https://www.sharesoc.org/seminar/sharesoc-webinar-with-ultimate-products-upgs-17-november-2021/
Full membership will be required to watch the recording. You can sign up for full ShareSoc membership here: https://www.sharesoc.org/membership/full-membership/
Just a quick reminder that Ultimate Products are presenting at our webinar on Wednesday. You can register here: https://www.sharesoc.org/events/sharesoc-webinar-with-ultimate-products-upgs17-november-2021/
Ultimate Products shareholders and potential investors may be interested in our webinar on the 17th Nov. Andrew Gossage (Managing Director) will be presenting: https://www.sharesoc.org/events/sharesoc-webinar-with-ultimate-products-upgs17-november-2021/
https://app.stockopedia.com/share-prices/up-global-sourcing-holdings-LON:UPGS
UPGS - we hosted the management of UPGS for a FY results investor webinar this week. Simon Showman (CEO), Andrew Gossage (Managing Director) and Graham Screawn (Finance Director) discussed the highlights from their results, covered the ongoing supply chain challenges which they are successfully mitigating with the help of their strong FOB business, the defence of their margins with innovation playing a crucial role, and updated investors on the integration of the Salter acquisition, as well as taking a closer look at their international business including the opportunities for Petra particularly in Germany.
Full presentation is available to watch here: https://www.equitydevelopment.co.uk/research/upgs-fyresults-investorwebinar
I must say I feel quite content with my purchase back in early Oct. Well done to UPGS and the BoD
208p BUY