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UP Global Sourcing is the energy behind many big names in the consumer goods industry

An expert in reviving distressed British heritage brands could be a nice little investment, in our opinion. UP Global Sourcing (UPGS) floated on 6 March on London’s Main Market and has already seen its share price rise 21% to 155.45p.

We think the share price rally still has much further to travel, particularly as the stock is not yet on the radar of most investors.

The £128m company buys well-known brands which it believes it can develop as mass-market, value-led propositions.

It helps to revitalise these brands and get their products stocked by leading retailers including Argos, B&M European Value Retail (BME), Tesco (TSCO), Amazon and Robert Dyas.

The company, better known as Ultimate Products, designs and distributes consumer goods for the home to more than 300 retailers spanning 38 countries. Product categories span blenders and juicers, an array of housewares, headphones, radiators and fans as well as luggage, sold under proprietary and licenced brands.

The business is chaired by former Poundland boss Jim McCarthy. Although it has a global reach, three quarters of revenue in the year to July 2016 came from the UK and most of the remainder came from mainland Europe.

Its brand portfolio includes ironing board specialist Beldray, audio equipment brand Intempo, as well as British heritage kitchenware brands Salter and Russell Hobbs, both sold under licence. Ultimate Products recently bought cookware and bakeware brand Progress.

‘We want every family to have beautiful things for their home,’ says managing director Andrew Gossage, explaining Ultimate Products offers branded products ‘priced at a notch above own label’, so ‘everything we do has to be low cost’.

Key strengths include its ability to spot consumer trends and get products to the mass market quickly, helped by an extensive, in-house product development team.

The company made a £6.2m pre-tax profit in the year to July 2016 on sales of £79m.

‘As we outsource all our manufacturing, we’re quite a capital light business,’ says Gossage. Most of its products are sourced from third party manufacturers based in China.

Its cash-generative business model means Ultimate plans to pay out half of its adjusted profit after tax in dividends.

We’re excited by the momentum, the growth potential and dividends on top.

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