Chef Heston Blumenthal with Salter product

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Homeware and household brands owner Ultimate Products has seen a fall in sales in its first half of its financial year as it laps “exceptionally strong demand” for air fryers last year.

The owner of the homeware brands Salter, Beldray and cleaning and laundry brand Kleeneze said sales in the six months to 31 January fell back 4% to £84m, with supermarket ordering held back by overstocking issues and strong comparatives given the boom in air fryer sales.

However, the group has continued to drive productivity through its focus on continuous improvement, including the automation of hundreds of tasks across the business. Combined with lower freight rates in the period, this increased productivity has led to the group achieving improved operating margins.

As the group moves into its second half, shipping schedules are expected to settle, and peak air fryer sales will move out of the prior year comparatives.

Supermarket overstocking issues are continuing to subside and following the peak Christmas trading period more retail customers are reporting normalised stock positions, allowing an improving order trend for 2024.

The board anticipates a full-year profit performance in line with current market expectations.

During the period net debt reached a seasonal peak of £17.1m (compared to £30.5m last year) in December.

During 2021, the group increased its level of borrowings to complete the transformational acquisition of Salter, which has largely been repaid.

The board has, therefore, approved a new capital allocation policy.

It aims to maintain the net bank debt/adjusted EBITDA ratio at around 1.0x, but will continue to invest in the business enabling it to grow, while returning around 50% of post-tax profits to shareholders through dividends and share buybacks.

CEO Andrew Gossage commented: “Amidst a tough but improving consumer backdrop, we are pleased to have delivered a resilient performance.

“The overstocking issues that have held back ordering at many of our retail partners, especially European supermarkets, continue to subside. As the underlying demand for our products and brands remains robust, customers who had paused their ordering are once more open to buy. As a result, we remain confident in our prospects, as demonstrated by our new capital allocation policy.”

Morning update

On a quiet morning for grocery market updates, the FTSE 100 is down 0.2% to 7,561.9pts.

Early risers include Glanbia, up 3.8% to €16.50, Virgin Wines, up 3.2% to 36.3p and Bakkavor, up 1.9% to 96.6p.

Fallers include Deliveroo, down 2.2% to 118.2p, Greencore, down 1.8% to 100.8p and PZ Cussons, down 1.3% to 100.5p.

Yesterday in the City

The FTSE 100 opened the week flat at 7,573.7pts.

Risers yesterday included Just Eat, up 7.7% to 1,340p, THG, up 5.6% to 66.6p, Ocado, up 4.6% to 536.8p, Greencore, up 2.9% to 102.7p, Domino’s Pizza group, up 2.6% to 355p, C&C Group, up 2.6% to 151.6p and PZ Cussons, up 2.1% to 101.8p.

The few fallers included Virgin Wines, down 6.1% to 35.2p, Hilton Food Group, down 1.6% to 791p, Compass Group, down 1.2% to 2,200p, Fever-Tree, down 0.8% to 1,012p and Tesco, down 0.3% to 279.6p.