Ultimate Products (AIM:ULTP) has reported audited revenue of £144.9m for the year ended 31 July, down 3% from £150.1m the previous year, with the Oldham-based owner of homeware brands Salter and Beldray describing trading as in line with expectations.
Statutory profit before tax fell 37% to £5.1m from £8m, while adjusted profit before tax, which strips out share-based payments and non-recurring items, dropped 28% to £6.3m from £8.7m. Adjusted EBITDA declined 20% to £10m from £12.5m, a fall the company attributed to the revenue decline, a shift in sales mix that pressured gross margin, and higher overheads tied to a reorganisation of its commercial function.
The revenue decline masks a sharper divide beneath the surface: branded sales, the company's strategic priority, actually rose 2% to £139.4m, while third-party clearance and white-label sales collapsed 60% to £5.5m as Ultimate Products deliberately wound down that division.
International branded sales were the standout performer, up 20% to £56.5m, driven by a 64% jump in sales to European discounters to £38.9m. UK branded sales fell 7% to £82.9m, which the company linked to weak domestic consumer demand alongside shortcomings in commercial execution that prompted the restructuring.
Gross margin slipped to 22.6% from 23.2%, reflecting the shift away from higher-margin clearance sales and a £444,000 hit from the UK's Extended Producer Responsibility tax. Administrative expenses rose 2% to £22.8m from £22.3m, including £760,000 of reorganisation costs tied to the commercial function overhaul, even as average headcount fell 8% to 317 full-time equivalents.
Net bank debt fell to £8.6m from £14.1m, taking leverage to 0.9 times adjusted EBITDA, marginally below the group's 1.0 times target policy, with operating cash conversion of 130%.
"FY26 was a year of important strategic progress for Ultimate Products against a challenging consumer backdrop," said Chris Dent, chief financial officer, adding that the group took "the difficult but necessary decision to exit third-party clearance" to sharpen its focus on proprietary brands.
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Within the brand portfolio, Beldray sales grew 13% to £43.1m following its rebrand the prior year, while Salter, the group's largest brand, saw sales fall 3% to £50.4m.
The group's proprietary brands, which Ultimate Products has prioritised since closing its clearance division, now account for 88% of total sales.
The year also included the departure of Simon Showman and Andrew Gossage from executive roles to non-executive positions, part of a leadership transition that will see Simon Harrison join as chief executive, and the group's move from the London Stock Exchange's Main Market to AIM.
Looking ahead, the board said current trading remains in line with market expectations, with subdued consumer demand and geopolitical uncertainty expected to persist, though it said continued investment in operational capabilities and the commercial function would position the group to maximise future growth opportunities.