Ultimate Products Share Discussion Threads

[aishah] 18/6/2025 11:40:22

Is Ultimate Products PLC (LON:ULTP) turning?

[pireric] 12/6/2025 13:19:49

It is worth being slightly cognisant over the direction of freight rates, remarkably even over the past week. There has been quite the spike, although off the lows, and I'd point out mostly on Asia-US routes around tariff events. Though I guess if we have a 'deal' now between the US and China, then the outbound shipments from China will continue to rise to the US.

There has been a spike in Asia-Europe rates, undoing the weakness from the start of the year. At least worth monitoring given the rates are quite volatile over the past week, and so who knows where they'll be in 1 month/3 months from now etc. But probably prudent to not extrapolate those lower rate levels.

Drewry will have their weekly container rates piece out later;

As a higher frequency source, if I look at Freightos, they're blended all routes market index was $3,779 as of yesterday vs. $3,650 on June 6th and vs. around $2,000 for April-mid May, but at the moment we're really just back to January 2025 levels when it was also in the high-3XXXs.

Eric

[trombone_89] 11/6/2025 14:39:25

Breakout. Target price £1?

[deanowls] 06/6/2025 11:50:26

Lots of posts on linked in of the start of homes exhibition in Paris. Simon Showman at the back being the Barman! Best place to close a sale.

[gdjs100] 06/6/2025 11:26:02

Good point, for some reason I read that as £500m not £300m

[pireric] 06/6/2025 10:44:30

Not quite that much but they should be at about £150m give or take of revenue in FY25. If the target is £300m by FY30, then it's a revenue CAGR of 15%. If that's anywhere near mainly organic (which I reckon a big part of it would be), then clearly it'd be a highly attractive equity story. Key words - if they execute successfully!

But it stems right back to the entrepreneurial, ambitious and aligned nature of the management team. And when they're talking about their significantly lower European market penetration, it all aligns together

Eric

[gdjs100] 05/6/2025 19:49:18

That's 3x revenues... if they can maintain or grow margin with increased scale, and doesn't include any equity issuance, that will be quite the kicker to EPS.

[pireric] 05/6/2025 19:29:26

As an aside, interesting snippet from a ULTP job posting today

"After one of our busiest years yet, we are looking to recruit more people as we continue to grow and develop into a £300 million turnover company in the next 5 years."

Eric

[pireric] 05/6/2025 19:27:59

I posted this elsewhere earlier, so copying out of courtesy re: Ultimate Products (ULTP)

What?
Founded in Manchester in 1997, ULTP specialises in designing and sourcing consumer products (mainly from China), which it brands and sells into the UK/Europe. It is focused around homeware goods, especially kitchen (e.g. scales, coffee grinders, air fryers) and bathroom/cleaning (e.g. irons, clothes racks, steam cleaners). It offers good quality products at ‘value prices with trusted brands, knocking out parts of the private-label product market and undercutting premium brands. Its brands have decades or centuries of heritage, and positive reviews (e.g. search Amazon for ‘Salter’). ULTP’s brand portfolio (mainly via acquisition) includes the likes of Beldray, Progress, Kleeneze and Salter. For FY25 (year ending July), ULTP should generate ~£154m of revenue (c. 63% UK, 37% Europe), ~£12m EBIT, 9.2p EPS.

Why now?
Moving out of an earnings decline cycle at a depressed valuation (ULTP down 34% YTD, down 51% over past 12m). A return to y/y growth in 2H25 results (period ends 31st July) should spur a recovery.

ULTP’s stock started to break down from November on three issues which impacted 1H25 results; 1) continued reductions of air-fryer revenue (which was at exceptional levels in FY23), 2) high freight rates which spiked in mid 2024 (£2m cost impact which they absorbed rather than pass on to customers), and 3) consumer spending softness post-October election. This prompted a profit warning in February 2025. Cavendish’s EPS cuts were sharp; FY25: -36, FY26: -25%. Given exposure to ordering patterns, it’s important to be on the right side of ULTP’s earnings trends.

From here, the expectation is a return to moderate growth from 2H25 (1H was -6%), which feels eminently achievable. Non-air fryer revenue was stable in 1H25. ‘Sold stock’ balances at 1H25 were +46% y/y, a clearly positive forward indicator into 2H25. Broker estimates are re-based (FY25 guidance is £14-16m of EBITDA and consensus is £14.3m). Mid-term, there remains a significant opportunity to scale ULTP’s international business, which grew 12% in 1H25. ULTP generate £1.46 in sales per person in the UK, versus Europe at £0.11.

I would make two analogies. First, some of the dynamics of this business are similar to Warpaint; success is linked to being fast on product trends and innovation, disrupting incumbents. And a big part of the ULTP story is a go-to-market and customer roll-out across Europe. Secondly, that similar to (e.g.) Supreme, it’s a business with entrepreneurial spirit and aligned management. Cofounder and CCO Showman owns 21% of the stock and CEO Gossage owns 9%.

The upside?
- ULTP is far from the highest quality stock (plenty of dynamics I can’t touch on in 700 words), and frankly the pathway for ULTP to trade at >12x P/E is likely long. But it’s on 6.2x FY26 P/E (FY26 commences August 2025). Rebased FY26 numbers are achievable, while ULTP traded on an average 9.0x P/E over the past 2 years (+45%) and 10.7x over the past 4 years (+73%). Consumer spending remains solid, while ULTPs European expansion continues strongly. While there maybe earnings upside in this scenario, let’s not factor that in. 12p of EPS is delivered in FY26 (as per consensus. Versus ~15p in FY22/23, ~12p in FY24) and the market builds confidence on 13.5p EPS forecast for FY27. ULTP re-rates to 9-10x this level, 121-135p with an 8% FY26 dividend = 61 – 80% total return.

The downside?
What feels like trough earnings in FY25 is actually not trough into FY26, with a macro downturn and consumer product competition from China further depressing earnings. Assume new 7.5p of trough EPS for FY26. What multiple to apply to the new trough EPS? Say 8x is reasonable (given that factors in another 18% EPS cut), which points to 60p, which with a reduced 5% dividend yield, gives 15% downside.

Next catalyst?
A 3Q25 trading update, but I’m not sure we get this, which actually reassures that FY25 trading is in-line with expectations (i.e. the end of the cutting cycle). Otherwise, an update on FY25 in August. ULTP has been buying back stock. Note that net bank debt at FY25 end is forecast (Cavendish) at £16.4m, ~1x forward EBIT of £15.8m.

Eric

[trombone_89] 02/6/2025 10:29:17

Still dirt cheap at these levels with a pathway up towards 120p over the next 12 months if they execute

[pireric] 17/5/2025 11:37:12

It's probably gone a bit under the radar that the Red Sea environment seems to be on a gradually improving trend as a result of Trump's comments around Iran and the prospects of an upcoming deal. Trump has been saying that he's thinking the shipping crisis is coming to an end

Now the Suez Canal is trying to build on the recent traffic growth off trough levels with discounts to encourage ships back in

See -> www.lloydslist.com/LL1153441/Suez-canal-touts-15-discounts-to-entice-shipping-back-to-the-Red-Sea

ULTP shareholders will remember that the company commented at the half year that "Goods in Transit is inventory on the sea between China and the UK. The closure of the Red Sea is adding around 15–20 days to the total shipping time. The balance will remain high until the red sea reopens."

If this does get resolved, which its increasingly looking like it may do, it should unlock about £5m in working capital that is currently tied up as excess goods in transit

As a reminder, the consensus expectation for the year ending in July is about 9.2p of EPS, with a recovery back to 12.0p for the year ending in July 2026. EPS was 12.3p in FY24 and 15.4p in FY23.

Once there is line on sight that this business is back to flat growth and moving back to actual growth (led by European expansion) then I think we'll see this move back towards 9-10x P/E again (given this is closer to trough than peak earnings power), which if off a 10.5-12p EPS level for FY26 would be 95 - 120p (35 - 70% upside). I definitely think we're past the worst sentiment point on this one, and so as the second derivative turns, these levels will be seen as some form of cycle low

Eric

[deanowls] 15/5/2025 19:28:08

If youre referring to Paul hill/scott why can’t you mention it?

[trombone_89] 15/5/2025 18:59:45

q3 trading update soon? anything confirming 8.5p of eps or above and 10p or above for next year and this will be on its way

some leeway on a downgrade given how bombed out it is

look at freight rates which should provide big savings

[socionomics] 15/5/2025 14:22:02

Yes, and it's been tipped too. Can't reveal source, but let's just say a few wise investors should be taking a look over the next few days.

Safe bet from these levels in my opinion.

[advfnagain] 15/5/2025 13:44:56

sounds like simply wall street

[socionomics] 15/5/2025 12:21:25

Trading at 60.1% below our estimate of its fair value

Earnings are forecast to grow 19.65% per year

Trading at good value compared to peers and industry

Analysts in good agreement that stock price will rise by 92.1%

[socionomics] 15/5/2025 12:06:00

Chart looks good for a move to 140p+

[aishah] 14/5/2025 09:15:13

Added here.
12 mth rolling fcst p/e 6.1, peg 0.4 and yield 8%

Mkt cap only £60m, psr 0.4

Buybacks continue

[trombone_89] 12/5/2025 11:51:39

Encouraging

[netcurtains] 20/4/2025 13:57:23

Post dividend is it possible this will fall right back to 30p?

It looks cheap but I have a history of buying cheap shares too early.
Is this too early to buy?

[netcurtains] 20/4/2025 07:33:57

Personally I like "umms and errs" I dont really like spiv or slick CEOs. I like a style where the CEO is not pushing something, he or she is relaxed and simply telling their story without any pushiness.

[netcurtains] 17/4/2025 11:33:03

Interesting... Thanks

[dr biotech] 02/4/2025 15:15:21

I thought what they said was OK but it has to be said their presentations skills aren't the best - lots of umms and errs. But credit to at least face up to the retail holders, something we don't see anywhere near enough of. Getting into the middle of lidls is a key thing, I've noticed more salter and a few beldray items in my local one recently. Along with a welding mask or whatever odd items they seem to have in there.