Ultimate Products (LON:ULTP) executives told investors its latest half-year results were “disappointing” versus the prior year but broadly matched the revised guidance issued in June 2025, with revenue coming in slightly better than expected. Management used the call to highlight internal changes intended to drive “self-help” improvements in a challenging consumer backdrop, including a refreshed commercial leadership team, continued productivity programs, and a sharper focus on proprietary brands after closing its clearance division.
Results in line with revised guidance as clearance business exits
Finance chief Chris Dent said revenue declined 6% versus guidance for an 8% decline, calling the performance marginally ahead of expectations “especially in relation to the revenue line.” He attributed the year-on-year revenue pressure primarily to the closure of the company’s third-party clearance division, which removed £6.5 million from revenue.
On the cost side, Dent said administrative expenses rose by £500,000, including £400,000 related to the reorganization of the commercial function and sales teams during the period.
Branded sales up, but UK weakness offsets EU discounter gains
On revenue mix, Dent said third-party clearance fell 69% (the £6.5 million decline), while branded sales increased 2%. However, he emphasized that branded growth was concentrated in one area: the EU discount segment, where branded sales grew 91%.
Management contrasted that performance with weakness across the UK business. Dent said the UK was down 6% overall, including declines of 4% in supermarkets, 8% with discounters, and 7% online. He said the UK trends prompted a reassessment of the company’s go-to-market approach and led to changes in how commercial teams operate, including the appointment of Duncan Singleton as Chief Commercial Officer and a refresh of the sales team to better align with retail customers.
Dent summarized the period’s revenue bridge as:
- £6.5 million decline from clearance
- £4.4 million increase in international branded sales
- £2.9 million decline in the UK
Margins pressured by mix despite freight cost relief
Dent said he would have expected gross margin improvement given a £1.2 million benefit from lower freight costs, but that benefit was offset by an unfavorable change in sales mix. He noted that the clearance activity sat at the higher end of the company’s gross-margin range, while EU discounter sales are at the lower end. As a result, management said it wants EU discounter growth to be incremental rather than a substitute for the core business, reinforcing the push to restore growth in the UK.
While the company continues to face inflationary wage pressures, Dent said these have been offset by efficiencies from tools and systems including AI, the company’s product information management (PIM) platform, and robotic process automation (RPA).
Productivity programs keep OpEx flat; ERP project underway
CEO Andy noted a “tough environment” in which costs are escalating and revenue growth is harder to achieve, describing the situation as “the squeeze.” He said that in the current market “only self-help will do,” and he highlighted a longstanding continuous improvement process that has helped keep operating expenses level “for the fourth consecutive year.”
Andy said headcount has been reduced 20% since FY2023, equating to roughly £3.5 million per year in payroll cost. He pointed to a large RPA program—nearly 1,300 bots running daily—saving about 100,000 hours annually, which he equated to 50 heads. He added that AI is becoming an increasing focus, and said the company’s “bottom up” continuous-improvement approach provides a structure for deploying AI effectively.
Dent also discussed a new ERP initiative, describing the existing system as being “end of lifed.” He said the company has a £2 million project underway to introduce a new ERP system targeted to launch in spring 2027, with related exceptional costs expected to continue running through the income statement over the next 18 months. Executives indicated they expect benefits from the ERP system, though they said those benefits would not be classified as exceptional.
Dent additionally noted the company moved from the Main Market to AIM on January 12, saying AIM was viewed as a more suitable home for a company of Ultimate Products’ size.
Cash generation reduces debt; outlook includes macro watchpoints
On capital allocation, Dent reiterated the company targets net bank debt of around one times EBITDA, pays out 50% of profits as dividends, and uses share buybacks when net debt falls below that threshold. He said net debt declined from £17.7 million to £9.7 million, while working capital fell from £32.5 million to £24.9 million. Dent described the policy as “countercyclical,” noting the business can “throw off cash” when it shrinks—though he said he would prefer the business to be growing and consuming working capital over the longer term.
Looking ahead, Andy said trading was “in line” with guidance, with group sales expected to be marginally ahead of market expectations and profitability in line with consensus. He also addressed investor questions about geopolitical risks, focusing on the potential impact of conflict involving Iran. He said he was less concerned about shipping routes—given the company has been routing around Africa for some time—though oil-driven changes could influence shipping costs if capacity exits the market. His bigger concern was “factory gate” inflation, citing oil’s impact on plastics (a key input) and potential inflation in aluminum costs used in cookware.
Andy said his “greatest concern” was demand, warning consumers remain sensitive to inflation after the cost-of-living crisis and noting UK household savings rates have been above 10% for much of the last couple of years. Even so, he said the company remains profitable month-to-month, has a strong balance sheet, and could see opportunity if weaker competitors struggle further.
In Q&A, management also addressed online performance, attributing declines partly to an extended Amazon destocking cycle following elevated buying during the COVID and post-COVID period. Andy said recent months in calendar 2026 have performed better year-on-year than in calendar 2025 and suggested the destocking process may be nearing an end. He added the company was pleased with the performance of its own websites, salter.com and beldray.com, and plans to continue investing resources to grow owned online platforms.
Executives also said the company expects to clear roughly £0.5 million of remaining closeout stock largely by the end of the calendar year, and discussed evolving toward more “category management” capabilities—akin to FMCG—rather than selling general merchandise purely season-to-season. On customer concentration in EU discounters, Dent said the board manages risk with a limit that any single customer should not account for more than 20% of total gross margin.
About Ultimate Products (LON:ULTP)
Ultimate Products is the owner of a number of leading homeware brands including Salter (the UK’s oldest houseware brand, established in 1760) and Beldray (a laundry, floor care, heating and cooling brand that was established in 1872). According to its market research, nearly 80% of UK households own at least one of the Group’s products.
Ultimate Products sells to over 300 retailers across 38 countries, and specialises in five product categories: Small Domestic Appliances; Housewares; Laundry; Audio; and Heating and Cooling.
