3 November 2022
UP Global Sourcing Holdings plc
"Ultimate Products" or "the Group"
FULL YEAR RESULTS FOR THE YEAR ENDED 31 JULY 2022
A record financial performance
Ultimate Products, the owner of a number of leading homeware brands including Salter (the
Financial highlights
· Total revenue up 13% to a record
o International revenue up 22% to
o Supermarket revenue up 32% to
o Online revenue up 23% to
· Adjusted EBITDA* up 41% to
· Statutory profit before tax up 62% to
· Adjusted profit before tax* up 42% to
· Statutory EPS up 54% to 14.3p (FY21: 9.3p)
· Adjusted EPS* up 32% to 14.7p (FY21: 11.1p)
· Full year dividend per share up 42% to 7.12p (FY21: 5.02p)
· Net bank debt/adjusted EBITDA* ratio of 1.3x (FY21: 1.4x)
· Facilities headroom at 31 July 2022 of
Operational highlights
· Salter acquisition fully integrated, and significantly earnings enhancing
· German kitchen electrical brand Petra relaunched and first retailer orders for FY23 received
· Successful management of the impact of the global shipping crisis and associated supply chain challenges
· Major robotics process automation programme launched in Q4
· Refurbishment of the office and showroom at Manor Mill, the Group's headquarters in
· Installation of 1,150 solar panels on the roof of Manor Mill, expected to produce 40% of the building's energy requirements
· Consumers increasingly investing in energy saving products, such as air fryers, with FY23 sales and order book already up 66% on total air fryers sales in FY22
· Post period end:
o Renewed the Group's Russell Hobbs licencing agreement (for non-electrical kitchen and laundry products) on a rolling four-year basis, rather than the previous fixed-term arrangement
o Planted one millionth tree in partnership with Ecologi
o The Group's inaugural ESG strategy to be published shortly
*Adjusted measures are before share-based payment expense and non-recurring items.
Current trading and outlook
The Board anticipates profit performance for FY23 will be in line with current market expectations. Whilst the current cost of living crisis represents a substantial challenge to all consumer-facing businesses, the Group is well placed to respond to this given its relentless focus on delivering value and growth.
Commenting on the performance, Simon Showman, Chief Executive of Ultimate Products, said:
"In FY22 Ultimate Products has delivered record financial results, seamlessly integrated the Salter brand, and maintained the incredibly high levels of service that our customers have come to expect from us. It has been a year of exceptional financial and operational progress, all of which was achieved against the backdrop of global supply chain disruption and a deteriorating macroeconomic environment.
It is pleasing to see that our energy efficient products, such as air fryers, are performing well and helping consumers save on energy costs. This aligns with our wider purpose of providing beautiful and more sustainable products for every home.
Whilst the current cost of living crisis represents a substantial challenge to all consumer- facing businesses our proven resilience and adaptability, as well as the quality and value of our products, mean that we are well placed to continue delivering future growth."
For more information, please contact:
Ultimate Products +44 (0) 161 627 1400
Simon Showman, CEO
Andrew Gossage, Managing Director
Chris Dent, Finance Director
Shore Capital +44 (0) 20 7408 4090
Mark Percy
Malachy McEntyre
Powerscourt +44 (0) 207 250 1446
Rob Greening
Sam Austrums
Notes to Editors
Ultimate Products is the owner of a number of leading homeware brands including Salter (the
Ultimate Products sells to over 300 retailers across 38 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
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.upgs.com
BUSINESS REVIEW
Strategy
Our purpose is to provide beautiful and more sustainable products for every home. We do this by designing, sourcing and supplying quality homecare products through our innovative, sustainable and customer-oriented capabilities. The Group's strategy is to develop its portfolio of brands for mass-market, value-led, consumer goods for the home focused on the following revenue channels:
· International retailers;
· Supermarkets;
· Online platforms; and
· Discounters.
This year has seen the Group make excellent progress towards its environmental and social sustainability agenda by ensuring ESG principles are embedded into the foundations of the business through a comprehensive strategy being implemented across the Group, full details of which will be published shortly. This has helped redefine our purpose and enhanced our core values, which will help us tackle the environmental impact that our business makes. Our ambitions include clear targets, the achievement of which will make a distinct difference to our business. These goals are also aligned to our customers' needs, ensuring we can provide them with an even greater service.
We are confident that we are now on our journey to become a more sustainable business, with an improved governance structure and commitment to the Task Force on Climate-Related Financial Disclosures ("TCFD"). It has been a pleasure to see the engagement and passion from our colleagues in this area of the business, where new ideas are continually being presented to the Board for consideration.
Performance
International
International revenue was ahead of last year by 22% (
Supermarkets
Our brands continue to resonate with supermarket customers in both the
Online Platforms
Online grew by 23% (
We expect this strong online momentum to continue into FY23 and are targeting 30% of overall revenue to come from online over the medium term.
While the majority of our online revenues will always come from sales made through platforms, our recently relaunched Salter and Beldray websites provide an additional avenue for growth, which will also facilitate a more direct relationship between our brands and their consumers.
Discounters
Sales to discounters fell by 7% (
Operating Margins
Gross margin increased to 24.9% (FY21: 22.2%) driven by the benefits of the Salter acquisition with the Salter licence royalty now no longer payable and the addition of the higher margin scales business. Core gross margins remained stable compared to last year which was a significant achievement given substantially increased shipping costs.
The combination of higher revenues, a higher gross margin, and overheads broadly stable relative to revenue led to a 41% (
OPERATIONAL REVIEW
Integration of the Salter Acquisition
The acquisition of Salter at the end of FY21 was an exciting moment in the history of Ultimate Products. Salter is the
Supply Chain
During 2021, global shipping capacity was severely constrained because of worldwide port congestion. The drop in capacity caused a substantial increase in the cost of shipping leading to downward pressure on gross margins, albeit we were able to offset this by actions elsewhere. During 2022, there has been an improvement in availability and reliability, which has led to a softening of rates, although these remain substantially higher than historic norms.
The Group has successfully navigated the worst of the shipping and wider supply chain crisis, and, as the situation continues to normalise, we see this providing significant upside to the business in the medium term through the reversing of the downward pressure on margins that it represented and the additional revenue opportunities that have arisen from improved stock availability.
Head Office Investment
In September 2022, we welcomed colleagues back to our head office, Manor Mill, having completed our
Board Changes
Chris Dent joined the Board on 4 April 2022 as CFO-designate, before taking over as CFO from Graham Screawn when Graham retired from the Board on 1 August 2022. Chris joined the Group from Franchise Brands plc and has extensive public markets experience. We look forward to him playing a key role in Ultimate Products' ambitious plans for the future.
Over the past 12 years, Graham has played an instrumental role in the Group's journey from a privately owned business to a well-established quoted company. We wish him all the very best for his retirement and thank him for the enormous contribution that he has made to the Group's success.
Employee Share Participation
The Group has a history of extending equity participation to the wider colleague base with the objective of increased incentivisation and retention of talent. During the year, share option awards were granted under the PSP Scheme to key managers and under the SAYE Scheme to all qualifying colleagues in the
It is intended that the exercise of options will be fully satisfied through ordinary shares held in trust by the EBT. To this end we commenced an EBT share purchase programme with the objective of mitigating the dilutive impact of share option awards and through this improving overall shareholder returns.
Robotics Process Automation
As both a B2C and B2B supplier, our position in the supply chain brings complexity that must be carefully managed to continue to provide the best service to our customers. We see this complexity as an opportunity that represents a significant barrier to entry. We therefore continue to concentrate on developing our systems with a relentless focus on driving productivity through the use of automation. The next step in this journey is the investment in robotics across the entire business to automate hundreds of tasks. Rather than significant extra capital expenditure, the initial investment has taken the form of modest additional headcount increases within our process team. Through this, we expect to see increased productivity and improved accuracy resulting in enhanced operating margins and an even better customer experience.
Petra Brand Update
During 2021, the Group purchased Petra, the German kitchen electrical brand. Founded in
Russell Hobbs Licence
Post year end the Group renewed its trademark licence agreement with Spectrum Brands, which grants the Group an exclusive licence to use the "Russell Hobbs" trademark in the
FINANCIAL REVIEW
|
2022 |
2021 |
Change |
Change |
||
|
£'000 |
£'000 |
£'000 |
% |
||
Revenue |
154,191 |
136,367 |
17,824 |
13% |
||
Cost of sales |
(115,837) |
(106,136) |
(9,701) |
9% |
||
Gross profit |
38,354 |
30,231 |
8,123 |
27% |
||
Administrative expenses |
(19,604) |
(16,940) |
(2,664) |
16% |
||
Adjusted EBITDA |
18,750 |
13,291 |
5,459 |
41% |
||
Depreciation & amortisation |
(2,066) |
(1,623) |
(443) |
27% |
||
Finance expense |
(842) |
(518) |
(323) |
62% |
||
Adjusted profit before tax |
15,842 |
11,150 |
4,693 |
42% |
||
Tax expense |
(3,120) |
(2,423) |
(697) |
29% |
||
Adjusted profit after tax |
12,722 |
8,727 |
3,995 |
46% |
||
Share-based payment expense |
(403) |
(228) |
(175) |
77% |
||
Non-recurring costs |
- |
(1,414) |
1,414 |
-100% |
||
Tax on adjusting items |
51 |
228 |
(177) |
-78% |
||
Statutory profit after tax |
12,370 |
7,313 |
5,057 |
69% |
||
*Adjusted measures are before share-based payment expense and non-recurring items.
Revenue
Overall, Group revenue has increased by 13% to
|
Acquisition |
Core |
2022 |
2021 |
Core change |
Total change |
|
£'000 |
£'000 |
£'000 |
£'000 |
% |
% |
Supermarkets |
4,871 |
46,652 |
51,523 |
38,914 |
20% |
32% |
Discount retailers |
715 |
47,411 |
48,126 |
51,526 |
-8% |
-7% |
Online |
5,004 |
20,317 |
25,321 |
20,590 |
-1% |
23% |
Other |
5,757 |
23,463 |
29,221 |
25,336 |
-7% |
15% |
Total Revenue |
16,348 |
137,843 |
154,191 |
136,366 |
1% |
13% |
Overall, the business has seen strong progress with supermarkets, which have now become our largest revenue channel with sales of
|
2022 £'000 |
2021 £'000 |
Change £'000 |
Change % |
|
101,050 |
92,915 |
8,134 |
9% |
International |
53,141 |
43,451 |
9,690 |
22% |
Total Revenue |
154,191 |
136,367 |
17,824 |
13% |
In line with our international growth strategy, we have continued to see sales to international customers outpace the growth we have seen domestically within the
Gross Profit
Gross profit has increased by 27% to
Adjusted EBITDA
Gross profit increased 27%, whereas overheads only increased by 16% to
The increase in overheads reflects our investment in building up our teams, with salary costs increasing 9% to
Adjusted & statutory profit
|
2022 |
2021 |
Change |
Change |
|
£'000 |
£'000 |
£'000 |
% |
Adjusted EBITDA |
18,750 |
13,291 |
5,459 |
41% |
Depreciation & amortisation |
(2,066) |
(1,623) |
(443) |
27% |
Finance expense |
(842) |
(518) |
(323) |
62% |
Adjusted profit before tax |
15,843 |
11,150 |
4,693 |
42% |
Tax expense |
(3,120) |
(2,423) |
(697) |
29% |
Adjusted profit after tax |
12,722 |
8,727 |
3,995 |
46% |
Share-based payment expense |
(403) |
(228) |
(175) |
77% |
Non-recurring costs |
- |
(1,414) |
1,414 |
-100% |
Tax on adjusting items |
51 |
228 |
(177) |
-78% |
Statutory profit after tax |
12,370 |
7,313 |
5,057 |
69% |
Depreciation and amortisation increased 27% to
The finance charge has increased 62% to
During 2021 the Group took non-recurring charges of
The tax charge for the period at 21% (2021: 23%) was higher than the statutory rate of 19% due to the higher statutory rate of tax paid on our European foreign branches in
As a result, the statutory profit after tax increased by 69% to
Earnings per share
Although the Group has not issued any new shares within the year, in July 2021 the Group issued 7,142,857 shares at
|
FY22 |
EPS |
FY21 |
EPS |
|
£'000 |
p |
£'000 |
p |
Adjusted profit after tax / Adjusted EPS |
12,722 |
14.73 |
8,727 |
11.12 |
Share-based payment expense |
(403) |
(0.47) |
(228) |
(0.29) |
Non-recurring costs |
- |
- |
(1,414) |
(1.80) |
Tax on adjusting items |
51 |
0.06 |
228 |
0.29 |
Statutory profit after tax / Basic EPS |
12,370 |
14.32 |
7,313 |
9.32 |
As a result, whilst adjusted profit after tax grew by 46% to
Financing and cash flow
At the year end the Group had a net bank debt/adjusted EBITDA ratio of 1.3x (31 July 2021: 1.4x), which represents net bank debt of
|
31 July 2022 |
31 July 2021 |
Change |
Change |
|
£'000 |
£'000 |
£'000 |
% |
Cash |
6,202 |
133 |
6,069 |
4563% |
Overdraft |
(6,020) |
- |
(6,020) |
- |
Term loan |
(8,000) |
(10,000) |
2,000 |
-20% |
RCF |
(2,217) |
(2,983) |
766 |
-26% |
Invoicing discounting |
(6,197) |
(3,290) |
(2,907) |
88% |
Import loans |
(8,179) |
(2,759) |
(5,420) |
196% |
Loan fee |
155 |
234 |
(79) |
-34% |
Cash |
6,202 |
133 |
6,069 |
4563% |
The Group generated cash from operating activities of
|
31 July 2022 |
31 July 2021 |
Change |
|
2022 |
2021 |
|
£'000 |
£'000 |
£'000 |
|
WCD |
WCD |
Inventory |
29,162 |
21,674 |
7,488 |
|
74 |
59 |
Debtors |
32,194 |
26,544 |
5,650 |
|
60 |
57 |
Creditors |
(29,644) |
(29,451) |
(193) |
|
65 |
70 |
Total working capital |
31,712 |
18,767 |
12,945 |
|
|
|
Dividend
In line with our established dividend policy of distributing 50% of the Group's adjusted profit after tax, the Board is pleased to propose a final dividend of
Subject to shareholder approval at the AGM on 16 December 2022, the final dividend will be paid on 27 January 2023 to shareholders on the register at the close of business on 6 January 2023 (ex dividend date 5 January 2023).
James McCarthy |
Simon Showman |
Chairman |
Chief Executive Officer |
Consolidated Income Statement
For the year ended 31 July 2022
|
2022 |
2021 |
|
£'000 |
£'000 |
Revenue |
154,191 |
136,367 |
Cost of sales |
(115,837) |
(106,136) |
Gross profit |
38,354 |
30,231 |
Adjusted earnings before interest, tax, depreciation, amortisation, share-based payments & non‑recurring items ("Underlying EBITDA") |
18,750
|
13,291 |
Depreciation |
(2,044) |
(1,607) |
Amortisation of intangibles |
(22) |
(16) |
Share-based payment expense |
(403) |
(228) |
Non-recurring items |
- |
(1,414) |
Total administrative expenses |
(22,073) |
(20,205) |
Operating profit |
16,281 |
10,026 |
Finance expense |
(842) |
(518) |
Profit before tax |
15,439 |
9,508 |
Tax expense |
(3,069) |
(2,195) |
Profit for the year attributable to equity holders of the Company |
12,370 |
7,313 |
All amounts relate to continuing operations |
|
|
Earnings per share |
|
|
Basic |
14.3 |
9.3 |
Diluted |
13.9 |
9.1 |
Consolidated Statement of Comprehensive Income
For the year ended 31 July 2022
|
2022 £'000s |
2021 £'000s |
Profit for the year |
12,700 |
7,313 |
|
|
|
Items that may subsequently be reclassified to the income statement |
|
|
Fair value movements on cash flow hedging instruments |
3,329 |
(162) |
Hedging instruments recycled through the income statement at the end of hedging relationships |
162 |
961 |
Items that will not subsequently be reclassified to the income statement |
|
|
Foreign current translation |
11 |
(13) |
Other comprehensive income |
3,412 |
786 |
Total comprehensive income for the year attributable to the equity holders of the Company |
15,782 |
8,099 |
Consolidated Statement of Financial Position
At 31 July
|
2022 £'000 |
2021 £'000 |
||
Assets |
|
|
|
|
Intangible assets |
37,025 |
36,929 |
|
|
Property, plant and equipment |
6,369 |
5,719 |
|
|
Total non-current assets |
43,394 |
42,648 |
|
|
|
|
|
|
|
Inventories |
29,162 |
21,674 |
|
|
Trade and other receivables |
32,194 |
26,544 |
|
|
Derivative financial instruments |
4,142 |
384 |
|
|
Current tax asset |
- |
62 |
|
|
Cash and cash equivalents |
6,202 |
133 |
|
|
Total current assets |
71,700 |
48,797 |
|
|
Total assets |
115,094 |
91,445 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
Trade and other payables |
(29,644) |
(29,451) |
|
|
Derivative financial instruments |
- |
(220) |
|
|
Current tax |
(170) |
- |
|
|
Borrowings |
(22,314) |
(7,951) |
|
|
Lease liabilities |
(817) |
(771) |
|
|
Deferred consideration |
(987) |
(990) |
|
|
Total current liabilities |
(53,932) |
(39,383) |
|
|
Net current assets |
17,768 |
9,414 |
|
|
|
|
|
|
|
Borrowings |
(8,144) |
(10,847) |
|
|
Deferred tax |
(7,585) |
(6,147) |
|
|
Deferred consideration |
- |
(983) |
|
|
Lease liabilities |
(1,940) |
(2,030) |
|
|
Total non-current liabilities |
(17,669) |
(20,007) |
|
|
Total liabilities |
(71,601) |
(59,390) |
|
|
Net assets |
43,493 |
32,055 |
|
|
|
|
|
||
Equity |
|
|
|
|
Share capital |
223 |
223 |
|
|
Share premium |
14,334 |
14,334 |
|
|
Employee Benefit Trust reserve |
(1,571) |
(2,152) |
|
|
Share-based payment reserve |
1,166 |
1,024 |
|
|
Hedging reserve |
3,239 |
(162) |
|
|
Retained earnings |
26,102 |
18,788 |
|
|
Equity attributable to owners of the Group |
43,493 |
32,055 |
|
|
Consolidated Statement of Changes in Equity
For the year ended 31 July
|
Share capital |
Share premium |
EBT |
Share- based payment reserve £'000 |
Hedging reserve |
Retained earnings |
Total Equity |
As at 1 August 2020
|
205 |
2 |
(2,155) |
796 |
(961) |
15,527 |
13,414 |
Profit for the year |
- |
- |
- |
- |
- |
7,313 |
7,313 |
Foreign currency retranslation |
- |
- |
- |
- |
- |
(13) |
(13) |
Cash flow hedging movement |
- |
- |
- |
- |
799 |
- |
799 |
Total comprehensive income for the year |
- |
- |
- |
- |
799 |
7,300 |
8,099 |
Transactions with shareholders: |
|
|
|
|
|
|
|
Ordinary shares issued |
18 |
14,332 |
- |
- |
- |
- |
14,350 |
Dividends paid |
- |
- |
- |
- |
- |
(4,409) |
(4,409) |
Share-based payments |
- |
- |
- |
228 |
- |
370 |
598 |
Purchase/Sale of shares by the EBT |
- |
- |
3 |
- |
- |
- |
3 |
As at 31 July 2021 |
223 |
14,334 |
(2,152) |
1,024 |
(162) |
18,788 |
32,055 |
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
- |
- |
12,370 |
12,370 |
Foreign currency retranslation |
- |
- |
- |
- |
- |
11 |
11 |
Cash flow hedging movement |
- |
- |
- |
- |
3,401 |
- |
3,401 |
Total comprehensive income for the year |
- |
- |
- |
- |
3,401 |
12,381 |
15,782 |
Transactions with shareholders: |
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
(4,830) |
(4,830) |
Share-based payments |
- |
- |
- |
142 |
- |
(29) |
113 |
Purchase/Sale of shares by the EBT |
- |
- |
581 |
- |
- |
(208) |
373 |
As at 31 July 2022 |
223 |
14,334 |
(1,571) |
1,166 |
3,239 |
26,102 |
43,493 |
Consolidated Statement of Cash Flows
For the year ended 31 July
|
|
|
2022 £'000 |
2021 £'000 |
|
Net cash flow from operating activities |
|
|
|
|
|
Profit for the year |
|
|
12,370 |
7,313 |
|
Adjustments for: |
|
|
|
|
|
Finance costs |
|
|
842 |
518 |
|
Income tax expense |
|
|
3,069 |
2,195 |
|
Depreciation |
|
|
2,044 |
1,607 |
|
Amortisation |
|
|
22 |
16 |
|
Derivative financial instruments |
|
|
274 |
(678) |
|
Share-based payments |
|
|
403 |
228 |
|
Income taxes paid |
|
|
(2,345) |
(2,566) |
|
Working capital adjustments |
|
|
|
|
|
(Increase) in inventories |
|
|
(7,721) |
(368) |
|
(Increase) in trade and other receivables |
|
|
(5,649) |
(8,091) |
|
Increase in trade and other payables |
|
|
1,221 |
9,031 |
|
Net cash from operations |
|
|
4,530 |
9,205 |
|
Cash flows used in investing activities |
|
|
|
|
|
Acquisition of subsidiary |
|
|
(1,960) |
(30,578) |
|
Purchase of intangible assets |
|
|
- |
(111) |
|
Purchase of property, plant and equipment |
|
|
(1,843) |
(2,260) |
|
Net cash used in investing activities |
|
|
(3,803) |
(32,949) |
|
Cash flows used in financing activities |
|
|
|
|
|
Sale of own shares |
|
|
373 |
2 |
|
Proceeds from borrowings |
|
|
14,347 |
16,048 |
|
Repayment of borrowings |
|
|
(2,766) |
(1,144) |
|
Principal paid on lease obligations |
|
|
(936) |
(713) |
|
Proceeds from issue of new shares (net of costs) |
|
|
- |
14,350 |
|
Debt issue costs paid |
|
|
- |
(245) |
|
Dividends paid |
|
|
(4,830) |
(4,409) |
|
Interest paid |
|
|
(850) |
(335) |
|
Net cash generated by finance activities |
|
|
5,338 |
23,554 |
|
Net increase in cash and cash equivalents |
|
|
6,065 |
(190) |
|
Exchange gains on cash and cash equivalents |
|
4 |
(5) |
||
Cash and cash equivalents brought forward |
|
133 |
329 |
||
Cash and cash equivalents carried forward |
|
6,202 |
133 |
||
|
|
|
|||
Reconciliation of cash flow to the Group net debt position
|
Overdraft £'000 |
Term Loan £'000 |
RCF £'000 |
Invoice discounting £'000s |
Import loans £'000s |
Loan Fees £'000 |
Total liabilities from financing activities £'000 |
Cash £'000 |
Net bank debt £'000 |
|
At 1 August 2021 |
- |
- |
(225) |
- |
(3,903) |
136 |
(3,992) |
329 |
(3,663) |
|
Financing cash flows |
- |
(10,000) |
(2,758) |
(3,290) |
1,144 |
245 |
(14,659) |
- |
(14,659) |
|
Other cash flows |
- |
- |
- |
- |
- |
- |
- |
(196) |
(196) |
|
Other changes |
- |
- |
- |
- |
- |
(147) |
(147) |
- |
(147) |
|
At 31 July 2021 |
- |
(10,000) |
(2,983) |
(3,290) |
(2,759) |
234 |
(18,798) |
133 |
(18,665) |
|
Financing cash flows |
(6,020) |
2,000 |
766 |
(2,907) |
(5,420) |
- |
(11,581) |
6,020 |
(5,561) |
|
Other cash flows |
- |
- |
- |
- |
- |
- |
- |
49 |
49 |
|
Other changes |
- |
- |
- |
- |
- |
(79) |
(79) |
- |
(79) |
|
At 31 July 2022 |
(6,020) |
(8,000) |
(2,217) |
(6,197) |
(8,179) |
155 |
(30,458) |
6,202 |
(24,256) |
|
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
UP Global Sourcing Holdings plc ('the Company') and its subsidiaries (together 'the Group') is a supplier of branded, value for-money household products to global markets. The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 July 2022 or 2021 but is derived from those accounts. Statutory accounts for UP Global Sourcing Holdings plc for the year ended 31 July 2021 have been delivered to the Registrar of Companies and those for the year ended 31 July 2022 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports. Their reports for the year ended 31 July 2022 and 31 July 2021 did not contain statements under s498 (2) or (3) of the Companies Act 2006.
2. BASIS OF PREPARATION
The consolidated Group Financial Statements have been prepared in accordance with
Going Concern Basis
The Directors have adopted the going concern basis in preparing these accounts after assessing the principal risks and having considered the impact of a severe but plausible downside scenario, including a further Covid restrictions, supply chain issues and demand led falls in revenue due to the cost of living crisis. The Directors have considered a number of impacts on sales, profits and cash flows, taking into account experiences learnt from previous business interruptions. The Directors have considered the resilience of the Group in severe but plausible scenarios, taking account of its current position and prospects, the principal risks facing the business, how these are managed and the impact that they would have on the forecast financial position. In assessing whether the Group could withstand such negative impacts, the Board has considered cash flow, impact on debt covenants and headroom against its current borrowing facilities. At the year end the Group had a net bank debt/adjusted EBITDA ratio of 1.3x (31 July 2021: 1.4x), which represents net bank debt of
The Group's projections show that the Group will be able to operate within its existing banking facilities and covenants. Therefore, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the date of approval of these Financial Statements and, as a result, they have applied the going concern principle in preparing its consolidated and Company Financial Statements.
3. REVENUE
Geographical split by location: |
|
2022 £'000 |
2021 £'000 |
|
|
101,050 |
92,916 |
|
|
19,231 |
13,882 |
Rest of |
|
29,700 |
27,720 |
Rest of the World |
|
4,210 |
1,849 |
Total |
|
154,191 |
136,367 |
International sales |
|
53,141 |
43,451 |
Percentage of total revenue |
|
34.5% |
31.9% |
Analysis of revenue by brand: |
|
2022 £'000 |
2021 £'000 |
Salter |
|
48,080 |
28,379 |
Beldray |
|
39,950 |
42,374 |
Russell Hobbs (licensed) |
|
20,165 |
16,840 |
Progress |
|
8,287 |
6,683 |
Kleeneze |
|
2,835 |
2,136 |
Premier brands |
|
119,317 |
96,412 |
Other proprietorial brands |
|
17,032 |
24,357 |
Own label and other |
|
17,842 |
15,599 |
Total |
|
154,191 |
136,367 |
Analysis of revenue by product: |
|
2022 £'000 |
2021 £'000 |
Small domestic appliances |
|
57,032 |
48,715 |
Housewares |
|
54,539 |
35,898 |
Laundry |
|
14,799 |
17,216 |
Audio |
|
5,870 |
6,937 |
Heating and cooling |
|
12,907 |
15,457 |
Others |
|
9,044 |
12,144 |
Total |
|
154,191 |
136,367 |
Analysis of revenue by sales channel: |
|
2022 £'000 |
2021 £'000 |
Supermarkets |
|
51,523 |
38,914 |
Discount retailers |
|
48,126 |
51,526 |
Online channels |
|
25,321 |
20,590 |
Multiple-store retailers |
|
17,312 |
15,578 |
Other |
|
11,909 |
9,757 |
Total |
|
154,191 |
136,367 |
4. FINANCE COSTS
|
|
2022 £'000 |
2021 £'000 |
Interest on bank loans and overdrafts |
|
704 |
412 |
Interest on lease liabilities |
|
74 |
82 |
Foreign exchange in respect of lease liabilities (net of hedging actions) |
|
(11) |
(10) |
Other interest payable and similar charges |
|
75 |
34 |
Total finance cost |
|
842 |
518 |
5. TAXATION
|
|
2022 £'000 |
2021 £'000 |
Current period - |
|
2,390 |
1,591 |
Adjustments in respect of prior periods |
|
(281) |
(27) |
Foreign current tax expense |
|
467 |
641 |
Total current tax |
|
2,576 |
2,205 |
|
|
|
|
Origination and reversal of temporary differences |
|
351 |
43 |
Adjustments in respect of prior periods |
|
81 |
(37) |
Impact of change in tax rate |
|
61 |
(16) |
Total deferred tax |
|
493 |
(10) |
|
|
|
|
Total tax charge |
|
3,069 |
2,195 |
Factors effecting the tax charge
The tax assessed for the current and previous years period is higher than the standard rate of corporation tax in the
|
|
2022 £'000 |
2021 £'000 |
Profit before tax |
|
15,439 |
9,508 |
Tax charge at 19.0% (2021 - 19.0 %) |
|
2,933 |
1,807 |
Adjustments relating to underlying items: |
|
|
|
Adjustment to tax charge in respect of prior periods |
|
(200) |
(9) |
Effects of expenses not deductible for tax purposes |
|
(9) |
11 |
Impact of overseas tax rates |
|
231 |
299 |
Effect of difference in corporation tax and deferred tax rates |
|
88 |
2 |
Adjustments relating to non-underlying items: |
|
|
|
Adjustment to tax charge in respect of prior periods |
|
- |
(55) |
Effects of expenses not deductible for tax purposes |
|
77 |
224 |
Differences arising on tax treatment of shares |
|
(178) |
(33) |
Effect of difference in corporation tax and deferred tax rates |
|
127 |
(51) |
Total tax expense |
|
3,069 |
2,195 |
Corporation tax is calculated at 19% (2021: 19%) of the estimated assessable profit for the year. In the 3 March 2021 Budget it was announced that the
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net income for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share amounts are calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial year, adjusted for the effects of potentially dilutive options. The dilutive effect is calculated on the full exercise of all potentially dilutive ordinary share options granted by the Group, including performance-based options which the Group considers to have been earned. The calculations of earnings per share are based upon the following:
|
|
2022 £'000 |
2021 £'000 |
Profit for the year |
|
12,370 |
7,313 |
|
|
Number |
Number |
Weighted average number of shares in issue |
|
89,312,457 |
82,521,850 |
Less shares held by the UPGS EBT |
|
(2,958,630) |
(4,056,659) |
Weighted average number of shares - basic |
|
86,353,827 |
78,465,191 |
Share options |
|
2,580,825 |
2,039,490 |
Weighted average number of shares - diluted |
|
88,934,652 |
80,504,681 |
|
|
Pence |
Pence |
Earnings per share - basic |
|
14.3 |
9.3 |
Earnings per share - diluted |
|
13.9 |
9.1 |
7. DIVIDENDS
|
|
2022 £'000 |
2021 £'000 |
Interim dividend paid in respect of the previous year |
|
- |
906 |
Final dividend paid in respect of the previous year |
|
2,844 |
2,183 |
Interim declared and paid |
|
1,986 |
1,320 |
|
|
4,830 |
4,409 |
|
|
|
|
Per share |
|
Pence |
Pence |
Interim dividend paid in respect of the previous year |
|
- |
1.16 |
Final dividend paid in respect of the previous year |
|
3.33 |
2.795 |
Interim declared and paid |
|
2.30 |
1.69 |
|
|
5.63 |
5.645 |
The Directors propose a final dividend of 4.82p per share in respect of the year ended 31 July 2022.
8. BANK BORROWINGS
|
2022 £'000 |
2021 £'000 |
||||
Overdrafts |
6,020 |
- |
||||
Invoice discounting |
6,197 |
3,290 |
||||
Import loans |
8,179 |
2,759 |
||||
Term loan |
2,000 |
2,000 |
||||
Unamortised debt issue costs |
(82) |
(98) |
||||
Current |
22,314 |
7,951 |
||||
Revolving credit facility |
2,217 |
2,983 |
||||
Term loan |
6,000 |
8,000 |
||||
Unamortised debt issue costs |
(73) |
(136) |
||||
Non-current |
8,144 |
10,847 |
||||
|
|
|
||||
Total borrowings |
30,458 |
18,798 |
||||
|
|
|
|
|
||
Contractual maturities: |
|
|
|
|
||
In less than one year |
|
|
22,396 |
8,049 |
||
Between one and two years |
|
|
2,000 |
2,000 |
||
Between three and four years |
|
|
6,217 |
8,983 |
||
Less: Unamortised debt issue costs |
|
|
(155) |
(234) |
||
Total borrowings |
|
|
30,458 |
18,798 |
||
Current bank borrowings include a gross amount of
9. FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
|
2022 £'000 |
2021 £'000 |
Trade receivables- held at amortised cost |
30,643 |
25,372 |
Derivative financial instruments - assets subject to hedge accounting |
3,899 |
47 |
Derivative financial instruments - assets not subject to hedge accounting |
243 |
337 |
Trade and other payables |
(28,095) |
(27,921) |
Derivative financial instruments - liabilities subject to hedge accounting |
- |
(220) |
Derivative financial instruments - liabilities not subject to hedge accounting |
- |
- |
Borrowings |
(30,458) |
(18,798) |
Lease liabilities |
(2,757) |
(2,801) |
Deferred consideration |
(987) |
(1,973) |
Cash and cash equivalents- held at amortised cost |
6,202 |
133 |
Financial Liabilities
The Group held the following financial liabilities, classified as other financial liabilities at amortised cost:
|
2022 £'000 |
2021 £'000 |
Trade payables Borrowings Other payables |
20,662 30,458 7,433 |
19,293 18,798 8,628 |
Lease liabilities Deferred consideration |
2,757 987 |
2,801 1,973 |
|
62,297 |
51,493 |
Derivative Financial Instruments
The Group held the following derivative financial instruments as financial assets/(liabilities), classified as fair value through profit and loss on initial recognition:
|
2022 £'000 |
2021 £'000 |
Derivative financial instruments - assets Derivative financial instruments - liabilities |
4,142 - |
384 (220) |
|
4,142 |
164 |
The above items comprise the following under the Group's hedging arrangements:
|
|
|
2022 £'000 |
2021 £'000 |
Foreign currency contracts |
|
|
3,524 |
97 |
Interest rate swaps |
|
|
261 |
47 |
Interest rate caps |
|
|
357 |
20 |
|
|
|
4,142 |
164 |
Forward contracts
The Group mitigates the exchange rate risk for certain foreign currency trade debtors and creditors by entering into forward currency contracts. At 31 July 2022, the Group was committed to:
|
2022 |
2022 |
2021 |
2021 |
|
Buy |
Sell |
Buy |
Sell |
USD |