UP Global Sourcing (UPGS) 115p

Gain to date: 22.7%
Original entry point: Buy at 93.7p, 27 August 2020

Since publishing its full-year results in early November, UP Global Sourcing (UPGS), or Ultimate Products as it is better known, has seen continued strong demand for its homewares from online and supermarket channels, confirming the trend of recent years for these channels to form an increasing part of the group’s sales.

The firm’s Beldray range of laundry, floor care, heating and cooling products was once again the stand-out performer, seeing especially strong sales over Amazon Prime Day, Black Friday and Cyber Monday.

As a result, the firm sees underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the year to July 2021 ‘above the market’s current expectations’. According to Refinitiv, the consensus forecast is now £11.05 million.

Chief executive Simon Showman credited the firm’s increased operating profits and margins to ‘a relentless focus on productivity enhancements and increased operating efficiencies’ as well as the surge in sales.

The increase in guidance led to a scramble among analysts to upgrade their forecasts, yet the team at Equity Development took the view that the shares would have to reach 150p to hit ‘fair value’, which is encouraging.

SHARES SAYS: We continue to like this well-placed branded goods group.

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