We up­date our views on UP Global Sourc­ing and Alumasc

Shares - - DISCLAIMER -

Orig­i­nal en­try point: 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.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.