Salter owner Ultimate Products forecasts lower earnings after ‘disappointing’ spring
Ultimate Products, the owner of the UK’s oldest houseware brand Salter, has revised down its full-year earnings forecast after a “disappointing” Spring hit sales in the third quarter.
The Greater Manchester-based firm expects full-year adjusted earnings before interest, taxation, depreciation and amortization to fall in the range of £17.5m to £18.5m against a prior market consensus of £21.5m.
Revenue will is also expected to be at least £156m, compared with £166.7m.
In February, former Mersey Television boss Andrew Gossage was appointed chief executive after Ultimate Products’ founder Simon Showman stepped down.
In a statement, Gossage said: “It is disappointing that spring has seen continued poor demand from consumers, which has adversely affected sales in the current quarter.
“Our assumption is that these challenging conditions will persist in the short-term and so impact our FY24 outcome. In contrast, the order book for FY25, at this early stage, is significantly ahead of FY24 as retailers continue to increase their forward orders as the overstocking issues brought about by the pandemic subside and consumer confidence builds as we see a return to real wage growth.
“As such, we remain confident in the Group’s medium-term prospects.”
The group, which reported a four per cent downturn in revenue in its interim results amid a slowdown in Brits purchasing airfryers, said trading had since been impacted by a “slowdown in near-term sales from landed stocks.”
“This has resulted in revenue being down 7 per cent year-on-year for the third quarter. The directors believe it is sensible to assume that these trading conditions will continue throughout the the fourth quarter.”
Trading has seen some signs of recovery in in the spring months, with a gradual resumption in ordering patterns from retail customers as pandemic-era overstocking issues subside.
“The increase in forward ordering by retailers has primarily been benefitting our forward order book for FY25, and as a result we are already seeing significant growth over the FY24 order book,” Ultimate Products said in a statement to markets.
Shares are up over 16 per cent in the year to date.