12 November 2024
Ultimate Products
plc
("Ultimate Products", the
"Company" or the "Group")
Posting of Annual Report and
Accounts and Notice of Annual General Meeting
Ultimate Products, the owner of a
number of leading homeware brands including Salter
(the UK's oldest houseware brand, est.1760) and Beldray
(est.1872), announces that, following the
release of its final results statement on 29 October 2024, it
has today published its Annual Report and Accounts ("the Annual
Report") for the year ended 31 July 2024.
The Company also announces that it
will hold its Annual General Meeting at 1.00pm on
Friday 13 December 2024 at the Company's registered
office at Manor Mill, Victoria Street,
Chadderton, Oldham, OL9 0DD. As such, the Company has today
published and posted to shareholders its 2024 Notice of Annual
General Meeting, which incorporates a Rule
9 waiver circular in order to enable the Company to exercise its
buy back authority and implement its stated capital allocation
policy, and form of proxy.
Copies of the Annual Report and the
Notice of the 2024 Annual General Meeting are available to view on
the Company's website: www.upplc.com.
They have also been submitted to
the National Storage Mechanism and will shortly be available for
inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism in
compliance with paragraph 6.4.1 of the FCA Listing Rules. Copies of
these documents, together with a form of proxy for use in
connection with the 2024 Annual General Meeting, have been posted
or made available to the Company's shareholders.
The final results statement and
presentation of 29 October 2024 included a set of
condensed financial statements and a fair view of the development
and performance of the business and the position of the
Company. The information contained within
the final results statement, together with the information set out
below, all of which is extracted from the Annual Report for the
year ended 31 July 2024, constitute the requirements of the
Disclosure Guidance and Transparency Rule 6.3.5(3)(a).
This announcement is not a substitute for reading
the full Annual Report.
Directors' responsibility
statement
The following Directors'
responsibility statement is extracted from the Annual Report (page
81):
The Directors are responsible for
ensuring that the Annual Report, taken as a whole, are fair,
balanced and understandable, and provides the information necessary
for shareholders to assess the Group's performance, business model
and strategy.
Directors' responsibilities pursuant
to DTR4
The
Directors confirm to the best of their knowledge:
· The
financial statements have been prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit and loss
of the Group and Company.
· The
Annual Report includes a fair review of the development and
performance of the business and the financial position of the Group
and Company, together with a description of the principal risks and
uncertainties that they face.
Principal risks and
uncertainties
The
following description of the principal risks and uncertainties that
the Group faces is extracted from the Annual Report (pages 44 to
45):
The Board is responsible for the
Group's risk management and internal control systems and for
reviewing their effectiveness, supported by the Audit and Risk
Committee.
We review our business regularly to
identify and document key business risks. Once identified, risks
are assessed according to the likelihood and impact of the risk
occurring and an appropriate mitigating response is determined.
This risk mitigation plan is then regularly monitored by the Audit
and Risk Committee with periodic review and discussion by the Board
as a whole. The table below sets out the Group's principal risks as
determined by the Board, the gross risk movement from the prior
year and the corresponding mitigating actions. This represents the
Group's current risk profile and is not intended to be an
exhaustive list of all risks and uncertainties that may
arise.
|
Area
|
Risk
|
Mitigation
|
Movement
|
|
Macroeconomic
factors
|
Macroeconomic trends affecting consumer confidence and
reducing non-food spending such as reductions in GDP per capita,
unemployment, inflation, interest & tax rates could all affect
consumer demand. In addition, aggregate demand for our products can
be influenced by individual retail partner performance and
strategy. As well as affected demand for our goods, reduced retail
demand can also impact the credit worthiness of our customers.
During the year the UK economy experienced a mild recession, as
interest rate rises designed to reduce inflation have reduced
consumption.
|
The
Group's international business provides economic diversity and some
protection against a downturn in the UK economy. Despite the
challenging market conditions, the Group sees the opportunity to
increase its market share by developing new customer relationships,
particularly internationally and through online channels. The
Group's products, being mass-market and value-led, are well placed
in the event of an economic downturn. The business has well
established procedures for managing credit risk with its customers
including credit insurance. The Group has a well-diversified
customer base, and is not reliant on any one customer, and has a
20% limit for individual customers. This helps to reduce risk when
their demand changes due to their financial performance or
strategy. The Group also has a well-diversified product base,
selling over 3,000 SKUs each year, therefore it is not dependent on
any one given product.
|
LEVEL
|
|
Sourcing
|
A major
loss of continuity in the supply of goods for resale could
adversely affect the Group's revenues. In addition, we have heavy
reliance on China as a source of products. Any deterioration in, or
changes to political, economic or social conditions in China could
disrupt the supply of goods or result in higher product cost
prices.
In
addition, we have a QA/reputational risk from our factories. The
quality of our factories is of huge import to our ongoing
reputation with our consumers and retail partners.
|
The
Group uses over 300 suppliers, which reduces risk over any
individual supplier. The Group maintains close relationships with
its suppliers through regular factory visits and interaction with
its local teams. We have detailed processes in terms of taking on
new factories.
Wherever possible, multiple sources of supply are sourced for
major products. The Group closely monitors developments in China
and continues to consider and use alternative sources when
practicable and viable. In the current year, buying teams have
begun to have an element of variable remuneration linked to
decreasing geographical supply concentration.
|
UP
|
|
Supply chain
management
|
As a
wholesaler, the Group has a significant working capital
requirement. Inefficient stock management could result in
overstocking, which may adversely affect working capital.
Conversely, understocking could limit the Group's ability to
maximise revenue opportunities. In the current year we have seen a
reduction in the risks related to the shipping crisis which
affected global supply chains, particularly in relation to the
costs and availability of shipping capacity.
|
Stock
levels and purchasing are closely managed, with all purchase orders
being reviewed before being placed. The Group's systems facilitate
close management of the completion and timing of purchase orders
placed. Stock is categorised between 'free' and (pre) 'sold' to
ensure that management focus on higher risk items. 'Free' stock is
reviewed and prompt actions are taken where necessary.
|
DOWN
|
|
Margin
pressure
|
As a
wholesaler, the Group faces consistent price pressures from retail
customers, whilst facing changes to input costs such as freight
costs, exchange rate fluctuations, factory gate price and changes
in the costs of raw materials. In the current year, we have once
again seen shipping costs begin to rise due to the disruption in
the Red Sea. However, we have seen a more benign and stable
currency situation.
|
The
Group's strategy of international growth, expansion of online
channels and increased penetration of supermarkets continues to
provide greater diversity and a balanced-margin portfolio. The
Group also employs a combination of margin-enhancing initiatives
including monitoring profitability of individual product lines,
continued product innovation and refreshing product ranges,
balanced against the need to ensure that our products remain
competitive. Furthermore, the Group seeks to constantly develop and
implement productivity improvements. The Group actively manages
foreign exchange risk through use of forward contracts.
|
LEVEL
|
|
Protection
of brands
|
Failure
to develop and enhance the product range of our brands could result
in loss of our competitive advantage, which could impact on the
Group's turnover. Failure to properly develop and protect brands
could restrict growth, given the Group's brand-led strategy. There
is a balance to be struck in terms of the development of new
products under our key brands. Development of many different
products can produce poor quality new products, as product
development uses resource. Therefore, it is important that the
business focuses its development of products to bring a focused
range of products to market that enhance our brands.
|
A high
level of new product development focus is maintained and monitored
by the Board. Buying teams attend trade shows and carry out store
and factory visits to ensure that they are in touch with the latest
consumer demands and trends. We have reduced our aim in terms of
new products from 1,000 to 600 to ensure a focused approach to
bring high quality products to market. The Group continues to hold
a "second tier" of brands, as alternatives to use if inappropriate
to use our premium brands.
We have
professionalised the use of our brands through the hiring of a
brand director. The Group aims to standardise and focus how we use
our brands, to both protect and enhance their value to the
business. In the current year we have invested in the rebranding of
Salter and have begun with the rebrand of Beldray.
|
DOWN
|
|
Climate Change &
Environmental
|
Climate
change is a widely acknowledged global emergency, with the need to
act faster becoming evident. Managing the greenhouse gas emissions
associated with our supply chain is critical to reducing our impact
on climate change. The physical and financial impacts of climate
change are already being felt and are set to intensify. As it
becomes increasingly likely that targets set by intergovernmental
bodies will be missed, the long-term risk for our business
continues to increase despite the mitigating actions we are
taking.
|
We have
established a Group-wide ESG Committee to extend oversight and
governance for monitoring the delivery of the Group's climate
commitments. We have stated a strong commitment to be Net Zero by
2050. This pledge is in the process of being supported by road maps
and targeted decarbonisation plans. We are working internally and
with third-party organisations in developing this suite of metrics
to enable us to monitor progress. We also continue to report our
climate-related financial disclosures. To incentivise the buying
teams, ESG elements have been added to the bonus targets in the
current year.
|
UP
|
|
Legal and
regulatory
|
Failure
to comply with legal and regulatory requirements, including
environmental and climate change developments, both in the UK and
in other countries in which the Group operates, could result in
fines or an adverse impact on the Group's reputation.
|
The
Board monitors the changing landscape of laws and regulations. New
legal and regulatory requirements are discussed by the Audit and
Risk Committee whose members contribute insight and experience of
such matters. External technical and consulting expertise is sought
when required. The Group has procedures for ensuring ongoing
compliance with legal obligations, including external annual
audits, and runs a programme of new-starter/refresher annual
training.
|
LEVEL
|
|
Human
resources
|
Failure
to attract and retain high-quality individuals, both in the UK and
internationally, could impact on the delivery of the Group's
strategy.
|
The
Group's Graduate Development Scheme, along with links to local
universities, provides a steady inflow of high-quality staff to
support the future growth of the Group, whilst the Group's Senior
Management Development Programme and its 'Introduction to
Leadership' courses aim to create a succession of employees into
senior roles. Steps are taken to encourage the retention of the
employees, including the SAYE and PSP share ownership schemes to
incentivise its workforce and to further improve
retention.
|
LEVEL
|
|
Cyber
security
|
Risk of
cybercrime with the potential to cause operational disruption, loss
or theft of information, inability to operate effectively, loss of
online sales or reputational damage.
|
The
Group continues to review and invest, where appropriate, in the
development and maintenance of its IT infrastructure, systems and
security. An external IT security audit is carried out on an annual
basis to ensure that any weaknesses in our systems are identified
and can be rectified. New employees receive IT training to increase
awareness of cyber risk. Disaster recovery, business continuity and
crisis communication plans are maintained.
|
LEVEL
|
For more information, please
contact:
Ultimate Products +44 (0) 161 627
1400
Andrew Gossage, CEO
Chris Dent, CFO
Shore Capital +44 (0) 20 7408
4090
Malachy McEntyre (Corporate
Broking)
Isobel Jones (Corporate
Broking)
Mark Percy (Corporate
Advisory)
David Coaten (Corporate
Advisory)
Harry Davies-Ball (Corporate Advisory)
Cavendish Capital Markets Limited
+44 (0)20 7220 0500
Carl Holmes (Corporate
Finance)
Matt Goode (Corporate
Finance)
Abigail Kelly (Corporate
Finance)
Charlie Combe (ECM)
Sodali & Co +44 (0) 207 250
1446
Rob Greening
Sam Austrums
Oliver Banks
Notes to Editors
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 45 countries, and specialises in five product
categories: Small Domestic Appliances; Housewares; Laundry; Audio;
and Heating and Cooling. Other brands include Progress (cookware
and bakeware), Kleeneze (laundry and floorcare), Petra (small
domestic appliances) and Intempo (audio).
The Group's products are sold to a
broad cross-section of both large national and international
multi-channel retailers as well as smaller national retail chains,
incorporating discount retailers, supermarkets, general retailers
and online retailers.
Founded in 1997, Ultimate Products
employs over 370 staff, a significant number of whom have joined
via the Group's graduate development scheme, and is headquartered
in Oldham, Greater Manchester, where it has design, sales,
marketing, buying, quality assurance, support functions and
warehouse facilities across two sites. Manor Mill, the Group's head
office, includes a spectacular 20,000 sq ft showroom that showcases
each of its brands. In addition, the Group has an office and
showroom in Guangzhou, China and in Paris, France.
Please note that Ultimate Products
is not the owner of Russell Hobbs. The company currently has
licence agreements in place granting it an exclusive licence to use
the "Russell Hobbs" trademark for cookware and laundry (NB this
does not include Russell Hobbs electrical appliances).
For further information, please
visit www.upplc.com
.