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Ultimate Products' interim results strongly suggest that the company is well placed for sales growth acceleration in H2 and to meet current market expectations. Online sales in H1 increased by 78% to represent 26% of group total, which is positive as this distribution channel has a smaller skew to H1 than others. Moreover, UPGS’s brands continue to demonstrate an ability to gain market share and grow through volume rather than pricing.
We maintain our view that the company’s current valuation does not fairly reflect UPGS’s three key growth drivers - brands, online & supermarkets distribution, and international. With external headwinds easing, an H2 acceleration is in prospect. In addition, growth is volume driven off a strong financial base. We base our 250p fair value / share assumption on an FY2023 EV/sales ratio of 1.5x, 12x EV/EBITDA and 16.6x P/E.
https://www.equitydevelopment.co.uk/research/well-placed-for-sales-growth-acceleration-in-h2
and now they are buying ahead of the results - same pattern everytime......likely to be a sell off after results, even if they are decent based on previous buying / selling patterns!! I will be here rain or shine for the long term.
Hi Sage,
Thank you for taking the time to write back, most kind. Fingers crossed that it does get the recognition it deserves. Just seems odd that people are selling off prior to the results.
Thank you again and have a nice weekend.
Gratefully,
Robert
Personally - I think this is a very well run company. Most companies don't have ever increasing earnings without any blips - this looks to be about as close as you can get. At present this company isn't valued as a brand owner in my opinion - it now owns Salter and Beldray etc. Salter isn't going to set the world alight growth wise but it should add stability to UPGS earnings - a great buy at a decent price. Unless there is something I am missing I think this is an excellent long term investment. When the market doesn't like it we are provided with an opportunity to top up at a discount - make the most of it as appropriate. Collect the dividends as you wait for the market to re-evaluate the valuation.
Can someone please explain the selling off of shares as we approach the trading update? It makes no sense at all. This companies position for last year final results where nothing shore of amazing:
Financial highlights
· Total revenue up 13% to a record £154.2m (FY21: £136.4m)
o International revenue up 22% to £53.1m (FY21: £43.5m)
o Supermarket revenue up 32% to £51.5m (FY21: £38.9m)
o Online revenue up 23% to £25.3m (FY21: £20.6m)
· Adjusted EBITDA* up 41% to £18.8m (FY21: £13.3m)
· Statutory profit before tax up 62% to £15.4m (FY21: £9.5m)
· Adjusted profit before tax* up 42% to £15.8m (FY21: £11.2m)
· Statutory EPS up 54% to 14.3p (FY21: 9.3p)
· Adjusted EPS* up 32% to 14.7p (FY21: 11.1p)
· Full year dividend per share up 42% to 7.12p (FY21: 5.02p)
· Net bank debt/adjusted EBITDA* ratio of 1.3x (FY21: 1.4x)
· Facilities headroom at 31 July 2022 of £17.8m (31 July 2021: £16.2m)
What more can people and from them to think it is a good company?
Any thoughts much appreciated.
Robert
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 11.30am on Thursday 30th March.
The online presentation will be hosting by Simon Showman (CEO), Andrew Gossage (Managing Director) and Chris Dent (CFO) and is open to all existing & potential shareholders. Questions can be submitted during the presentation and will be addressed at the end.
Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/upgs-investor-presentation-30march23
Profit taking - possible buying in prior to results, betting on an outperform.....when it's in-line they sell. Me I'm continuing to hold. This has been a great investment last 5 years, especially with dividends on top. 5 year view - this will be at £2-£3 a share - just my opinion for what it's worth. Based on organic growth, Petra, online expansion etc. Well run, management very competent indeed based on what I have seen in the last few years. Lots of skin in the game for management as well.
I don't know why the share keeps fluctuating so much when all the company does is keep producing great results and growth despite every seeming adversity.
New research note and audio summary here:
https://www.equitydevelopment.co.uk/research/online-drives-first-half-growth
Online channels were the main driver of growth for UPGS in the first half of FY2023 with a 2% sales revenue gain - areas of product strength included energy efficient and money saving items, which were cited as being buoyant across all distribution channels. At the same time key indicators of financial strength also improved. The trading backdrop also showed signs of improvement in the first half. Commenting on outlook, the company anticipates that the market’s current expectations for FY2023 will be met. UPGS continues to highlight the positive impact that the company’s automation programme is having on the business.
Despite recent share price strength, we still believe that the current valuation fails to fairly reflect UPGS’s three salient growth drivers - brands, online & supermarkets distribution and international. With external headwinds easing, a second half acceleration is in prospect, plus a robust financial position, the near-term outlook appears positive. We reiterate our 250p fair value per share (based on an FY2023 EV/sales ratio of 1.5x and 12x EV/EBITDA).
Yes tomorrow could be very interesting.
apologies - I meant a trading update on Tuesday.....!!!
I believe we are due a trading update on Monday. Whilst I am not expecting this to be significantly ahead, I would expect something in line, with a slightly improved outlook as it relates to input cost inflation, particularly shipping. I am expecting some news on how things are going with some of the supply disruption that previously impacted online sales. It would also be good to get an update on Petra and how that has started to perform. Overall I think it will be a positive update. Fingers crossed.
There maybe some more seasoned share owners than myself here and I was just wondering, does it seem likely to retrace a bit after the ex-dividend date is passed tomorrow.
Thank you in advance.
Robert = )
Ultimate Products, the owner, manager, designer and developer of an extensive range of value-focused consumer gos brands, conducted an investor presentation following the release of their Full Year Results.
Simon Showman (CEO), Andrew Gossage (Managing Director) and Chris Dent (Finance Director) discussed operational highlights of the past few months, including their success in managing the numerous supply side challenges. As they face into the current demand side headwinds, they talked investors through their robust brand portfolio and the diversity of their distribution channels which leave them in a strong position to continue delivering on their objectives.
If you missed the live event yesterday, you can see the full video (approximate length 50 minutes), which is divided into chapters:
0:00:03 Introduction & Ultimate Products overview
0:04:47 Highlights (Financial & Operational)
0:12:00 Strategy
0:27:05 Financials
0:38:58 Summary & Outlook
0:42:08 Questions & Answers
Link to video presentation: https://www.equitydevelopment.co.uk/research/upgs-fyresults-investorpresentation-nov22
The presentation this morning was professional as usual.
They explained the reason for no growth in online was due to prioritising inventory going to key customers rather than their own stock, which seems pragmatic.
They said a couple of times that they are aiming to be a £500m business in due course and their investment in technology is paramount to achieve this scale.
They reconfirmed that they aim to continue to distribute 50% of profits as dividends.
A resilient performance in challenging times. Impressive. Important to recognise that a number of the directors cannot purchase more shares - they already own a significant stake in the business. Lots of skin in the game. As an investor it looks like UPGS look after their employees - retention is key at present, so this bodes well. Petra has made a promising start in the German market with fantastic potential. I continue to hold, having purchased a few more a couple of weeks back.
Great results guidence kept, been big director buying b4 hand too.
Strong progress for the key brands Beldray and Salter plus significant advances in supermarkets and online coincided with increased margins across-the-board and an improvement in UPGS’s net debt/EBITDA position in FY2022. Moreover, the company anticipates that the market’s profit expectations for FY2023 will be met.
Strong sales growth in supermarkets and international sales were confirmed by today’s data which reported increases of 38% (25% excluding Salter) and 22% respectively. Online sales were a significant beneficiary of the Salter acquisition and increased by 23%.
The current share price fails to capture three salient growth drivers (namely brands, distribution and international) of the business. We believe the company’s ability to cope with external headwinds has been proven repeatedly, alongside its well-executed financial resilience. Hence, we base our 250p fair value / share assumption on an FY2023 EV/sales ratio of 1.5x and 12x EV/EBITDA.
Link to full report: https://www.equitydevelopment.co.uk/research/brands-and-resilience-driving-growth-in-fy2023
Nice rise, wonder whats driving this...
Tipped by The Tipster.
Nd
Link to new note: https://www.equitydevelopment.co.uk/research/russell-hobbs-improved-brand-visibility-for-upgs
UPGS today announced an important step forward in its licensing agreement for the Russell Hobbs brand as it moved from its previous fixed term arrangement to a rolling four-year basis. The move stands to increase certainty around the brand and justify increased investment behind it. Since mid-2021 all other brands in the portfolio have been wholly owned, which augurs well for both predictability and valuation. We reiterate our 250p per share fair value.
The change from fixed term licence arrangements to a rolling four-year basis for Russell Hobbs stands to raise UPGS’s certainty around the brand. The licence with the ultimate brand owner, US listed company Spectrum Brands (NYSE: SPB), will always have a minimum of four years to run, enabling UPGS to invest with greater certainty. The new agreement refers to the UK, Europe, Australia and New Zealand for non-electrical kitchen and laundry products.
We base our 250p fair value assumption on what we feel are deserved ratings of an FY2023 EV/sales ratio of 1.5x and 12x EV/EBITDA, which implies considerable potential upside. Further reassurance comes from the shares being on a miserly PER whilst offering a prospective 7.4% yield.
Sign up here: https://www.equitydevelopment.co.uk/news-and-events/upgs-investor-presentation-9nov22
Ultimate Products, the owner, manager, designer and developer of an extensive range of value-focused consumer goods brands, will be conducting a live investor presentation following the release of their Full Year Results.
Simon Showman (CEO), Andrew Gossage (Managing Director) and Chris Dent (Finance Director) will be presenting from the company.
The online event will take place at 11.30am on Wednesday 9th November.
The webinar is open to all existing & potential shareholders. Questions can be submitted during the presentation and will be addressed at the end.
Just added first small tranche here at 91.8p.
Pretty much at the year low share price. (Year high 225p.)
Market cap 89.3m shares at 92p = £82.1m
Debt at around £21.4m. Profit for FY22 was £15.8m, so p/e by my rough calcs is around 6.5x.
FY results due 3/11/22. We already know what these are from the TU,
What we don't know is how they have performed for last couple of months as the cost of living crisis has deepened, and people have cut back on discretionary spending. However, they aren't selling big ticket items - if you need a kettle or iron, you'll buy regardless. Also, the Director buys at 120p gives me confidence.
@sastech. thank you kindly for taking the time to message and your thoughts on the matter. I think it to be a very sound business with good management at the helm looking for steady growth.
I think I will be averaging down currently or buying some more to go in my ISA.
Have a great week.
Rob
RNS ...
on 1st September 2022 that James McCarthy, Chairman, on 1st September 2022 bought 65,000 ordinary shares of 0.25p ("Ordinary Shares") at a price of 119.7p per Ordinary Share. Following this purchase, Mr McCarthy has a beneficial interest in 1,000,000 Ordinary Shares representing approximately 1.1% of the Company's issued share capital.
The Company was also informed on 1st September 2022 that Robbie Bell, Non-Executive Director, on 1st September 2022 bought 100,000 Ordinary Shares at a price of 119.7p per Ordinary Share.
From today's reaction you could be forgiven for thinking they had sold ....