The Ultimate Products (LSE: ULTP) share price is down 48% so far in 2025, to 62p at the time of writing (7 November) — putting the £52m market cap firmly in penny share territory.
The shares had a poor start to the year even before a profit warning on 25 June. “This remains a hugely challenging trading environment given the wider macroeconomic uncertainty and weak consumer sentiment, and unfortunately our current performance reflects that“, said CEO Andrew Gossage.
The price crashed 30% on the day. Still, since then it’s back up 20%. And that’s even after the company slashed its dividend in half to 3.7p per share.
Full-year results
Reported on 28 October, the year saw revenue fall 3%, adjusted EBITDA drop 31%, and adjusted earnings per share (EPS) slide 40%. And the company was talking of a consensus for further falls in 2026 — revenue -8%, EBITDA -20%, EPS -30%.
The CEO described it as “a challenging year for consumer-facing businesses, with ongoing macroeconomic pressures, elevated shipping costs and weak consumer demand weighing on performance“. I think we’d worked that out.
Oh, and the board confirmed plans to move from the London main market to AIM. A lot of penny stocks do that to help with costs and flexibility at their low market cap. Shareholders will vote at December’s AGM.
Not that bad?
These results look awful. But the share price remained steady on the day. There might be more to this company than is immediately apparent. First, what does it actually do?
Ultimate Products owns a number of popular brands — including Beldray, Salter, Russel Hobbs, and Dreamtime.
One product-related thing struck me in those FY results. As well as a 60% drop in third-party close-out sales, the company suffered a 32% fall in air-fryer sales. Air-fryers — those are fad things that everyone craved after for a while, right? Fads pass, and sales fall to sustainable long-term rates. But it does looks like those two items caused the most damage.
The products the company sells are exactly the kinds I’d expect to lose some attraction when people’s pockets are squeezed. But at the same time, they’re ones that could enjoy firm long-term demand.
What next?
As well as that EPS fall expected in 2026, analysts also forecast a further dip in the dividend to 2.7p. But that would still mean a 4.3% yield on the current share price. And a return to earnings growth in 2027 could help it back up to 5.6%.
What about price-to-earnings (P/E) valuation? The 2026 consensus would mean a multiple of 12. If that’s the worst point in the earnings downturn, it might make for a decent long-term buy now.
Much will depend on cash flow and the dividend over the next 12 months, I expect. And I think investors who see the consumer-product sales outlook as solid over the next decade could do well to consider Ultimate Products.
But I’m wary of assuming too much from a penny share recovery too soon. I’ll wait and see.
