UP Global Sourcing hit by retail slowdown
UP Global Sourcing (UPGS) 95p
Original entry price: Buy at 178p, 4 May 2017
Our faith that consumer products distributor UP Global Sourcing (UPGS) could buck a weak retail trend has proved misplaced.
A little more than six months after joining London’s Main Market the company has been forced to release a damaging profit warning.
Ultimate Products, as it is better known, has warned of no growth in its current financial year running to 31 July 2018.
The retailers which form its customer base are exercising caution on buying stock for the autumn and winter. ‘The fact that this retailer caution is occurring in the seasonally more important first half of the year (in FY17 61.9% of the group’s revenues were generated during this period) represents a significant short-term headwind,’ it comments.
We had hoped the company could compensate for a fall in retail demand by increasing market share. Despite pointing to its experience in managing these dynamics and of delivering growth ‘in the longer term’ this has not proven to be the case in the short-term.
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