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Homeware and household brands owner Ultimate Products has posted double-digit first half growth and pointed to improvements with global supply chain issues.
The owner of homeware brands Salter, Beldray and cleaning and laundry brand Kleeneze said sales had jumped 13.9% in the six months to 31 January to £85.7m.
It said supermarkets will potentially surpass discounters as the group’s largest channel in 2022, driven by strong organic growth and the Salter acquisition
Salter is “performing well and in line with plan” following its acquisition in July, and is expected to be significantly earnings enhancing in the current financial year.
A recently opened new distribution centre capacity in the Netherlands will assist the European roll out of the group’s online business, in line with its previously stated objective of growing revenues via this channel to 30% of total revenues over the medium to long-term.
It said the well-documented global supply chain challenges continue to represent a headwind for the business.
However, while the situation remains uncertain and subject to change, conditions have recently “shown early signs of improvement” and the board is “cautiously optimistic that the worst is behind the group”.
The board anticipates a full year performance in line with current market expectations.
It will release its interim financial results on 29 April.
House broker Shore Capital commenting on its supply chain issues said: “Ultimate Products has had to face into very high freight costs in particular. If the company is seeing the movement of goods ease, then this could be an announcement that will resonate well with the whole wider goods trading market.
“The said, we feel it is a little early to be declaring victory and the cost of freight, for example, remains notably elevated compared to pre-pandemic levels.”
Stock research group Equity Development said the group’s outlook implied close to a 20% advance in sales revenue this financial year.
“The company should also be credited with its ability to record steady revenue growth despite supply chain headwinds,” it said. “There is now cautious optimism that the worst is behind the group.”
Morning update
Supermarket property investor Supermarket Income REIT has announced that Fitch Ratings has assigned an investment grade credit rating of BBB+ to the company.
Nick Hewson, chairman of supermarket Income REIT plc, said: “Securing an investment grade credit rating from Fitch is a significant milestone for Supermarket Income REIT.
“It is a testament to the company’s strategy and demonstrates both the credit strength of our tenants and the quality of our property portfolio. Looking ahead, this rating will provide the company with flexibility to pursue a wider range of debt funding strategies.”
On the markets this morning, the FTSE 100 has sunk 1.9% back to 7,512.8pts on worries over the Russia/Ukraine political situation.
Fallers include THG, down 4.5% to 124.5p, C&C Group, down 4.4% to 217p and Coca-Cola HBC, down 4.1% to 2,399p.
Risers so far include Glanbia, up 4% to €12.87, Hotel Chocolat, up 3.7% to 454.1p and Bakkavor, up 1.9% to 126.3p.
This week in the City
It’s a quieter week domestically, but global full year earnings releases keep coming later in the week.
In the UK the major updates will be annual results from Reckitt Benckiser and Deliveroo on Thursday.
Globally Kraft Heinz and Heineken have annual results on Wednesday, along with retailers Ahold Delhaize and Carrefour.
Thursday sees full year results from Nestlé and Walmart.
Back in the UK, the official ONS retail sales figures for January are released on Friday.
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