Shares in Ultimate Products (LON:ULTP) shed 5% after the homeware brands owner reported ‘broadly flat’ sales for H2 of FY26. The Oldham-headquartered company pinned the blame on cautious ordering across the general merchandise market.
And with its end-markets expected to remain in the doldrums in the current financial year, Ultimate Products downgraded FY27 guidance.
Subdued consumer demand
Ultimate Products owns the UK’s oldest houseware brand Salter as well as the iconic Beldray, established back in 1872. The AIM-listed company sells its wares to over 300 retailers in over 30 countries. According to its market research, nearly 80% of UK households own at least one of the group’s products.
In a trading update for the year to July 2026, Ultimate Products reported a 3.5% drop in annual revenues to £144.9 million. This revenue reversal reflected subdued consumer demand for general merchandise and the planned reduction in non-core third-party clearance sales.
| FY26E | FY27E | |
| Revenue (£m) | 144.9 | 146.5 |
| Adjusted EBITDA (£m) | 9.9 | 10.2 |
| EPS (p) | 5.4 | 5.7 |
Source: Shore Capital estimates
Adjusted EBITDA reduced from £12.5 million to £10 million, slightly better than the £9.9 million consensus estimate, as a changing sales mix compressed gross margin from 23.2% to 22.6%.
H2 sales were broadly flat, with a 0.3% year-on-year decline marking an improvement on the 5.8% drop seen in H1. However, Ultimate Products bemoaned ‘cautious ordering across the wider general merchandise market’.
And the company expects ‘the current backdrop of subdued consumer demand and geopolitical uncertainty to persist’ in FY27. As a result, investors should brace themselves for flat sales relative to FY26.
Proprietary brands in growth
Chris Dent, CFO, said: ‘Our primary focus during the year has been the transformation of our commercial function to drive the growth of our proprietary brands.
‘Although the broader trading environment remains challenging, we believe the changes we are making will support our ambition to grow both market share and brand equity, allowing our key brands of Salter and Beldray to fulfil their potential.’
Ultimate Products sees a clear long-term runway for growth in the UK and overseas, with Europe the standout opportunity.
It is also encouraging that sales growth for owned brands accelerated in H2 and Ultimate Products’ balance sheet is improving. Year-end net debt was £8.6 million, a £5.5 million year-on-year decrease which provides flexibility for further share buybacks.
Equity Development commented: ‘Trading conditions for general merchandise providers remain tough. However, the company’s ongoing focus on brands should be seen as positive, in our view, for future growth and shareholder value creation. We maintain our 165p per share fair value estimate.’
Shore Capital nudged its FY27 sales estimate down from £148 million to £146.5 million and lowered its adjusted EBITDA forecast by 7% to £10.2 million. The broker said Ultimate Products is ‘as fit as a butcher’s dog, but like quite a few listed UK firms, it could do with help from its markets’.
There is much to admire about Ultimate Products. But with general merchandise markets in the UK and Europe remaining soft, the recovery could be a protracted one. We also think forecast risk is skewed to the downside. Avoid the shares for now.
