LONDON (ShareCast) - (ShareCast News) - British consumer products business Ultimate Products Group (UP Group) said in a trading update on Monday that while both group revenue and EBITDA were forecast to come in above market expectations it was "unlikely" to report any revenue growth for its coming fiscal year.
Group revenue increased 39.1% to £110m due to growth in sales to UK and EU discounters, a 95% increase in sales from UK supermarkets and a solid performance from its online presence that generated new revenue for the firm.

UP said it anticipated net debt to be lower than its previous guidance thanks to a £2.1m tax credit it received after its initial public offering in March.

However, UP said the general merchandise trading environment had become much more difficult due to the rate of general inflation moving past that of wage inflation, hurting spending habits and leaving UP Group to say that any form of revenue growth for the firm in 2018 was "unlikely."

"The overall trading environment for general merchandise has become tougher, with wage inflation running behind general inflation. Consumers' discretionary spend is under pressure and confidence is, therefore, lower than it has been for some time, which is inevitably being reflected in purchasing behaviour," the company said in an update for its full-year ended 31 July.

"For retailers, this has also coincided with cost price increases in the wake of last year's sterling devaluation. As a result, retailers are generally exercising caution with regard to their non-food buying for Autumn/Winter 2017. This is manifesting itself in a reluctance to commit to purchasing too far forward, with retailers instead placing orders later or buying from stock," UP added.

UP also warned that between £4m and £5m of 2018's revenue would now be recognised in 2019 after moving from free-on-board to landed arrangements with one of its primary European customers.

The group said it was confident it would be able to deliver growth in the long-term and would release its fully audited financials on 7 November.

As of 1430 BST, shares had plummeted 45.82% to 110.16p.

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