Ultimate Products profits slump amid 'much tougher' UK market

UPGS revenues decreased 28.9% to £48.4m, dragging underlying EBITDA back 19.5% to £4.5m for the six months ended 31 January.

Gross margins remained stable at 22.4%, mainly due to changes in its customer mix and a continuation of its attempts to adapt to weaker exchange rates after moving to its new distribution centre at Heron Mill in Oldham.

UPGS continued to make progress in Germany, opening a new showroom and inking a number of major retail accounts, with orders already coming in ahead of management's expectations, leading the firm to assert that despite the reduced numbers, current trading for the year remained in line with forecasts.

Net debt was slashed 34.9% to £6.7m.

Chief executive Simon Showman said: "This has been a tough six months for both Ultimate Products and the wider general merchandise sector in the UK, as discretionary spend has continued to come under pressure due to low consumer confidence. Our financial performance during the period reflects this market headwind."

"While the UK looks set to remain challenging, we are pleased with the early progress that is being made in Germany and are delighted to have opened our new 10,000 sq ft showroom there earlier this month, which will provide a great showcase for our products to our European customer base," he added.

Earnings per share were cut to 3.8p each from the 7.00p posted a year earlier.

As of 1130 BST, shares had moved ahead 5.50% to 38.19p.