UP Global Sourcing – 59.4p

10 February 2020 – trading update

A trading update for the six months ended 31 January 2020 revealed that revenues increased by 2.8% to £67.7m (2019: £65.8m).  The company has renewed its exclusive trademark licence agreement for the “Russell Hobbs” trademark in the UK and EU until March 2023, covering a range of non-electrical kitchen and laundry products but not Russell Hobbs electrical appliances.  Banking facilities have been renewed to 2024, with funding headroom at 31 January 2020 of £13.2m.   Given that the majority of the manufacturing is based in China there could be some disruption but the company has extensive experience of managing supply chain disruptions in the country, including those caused by previous viral outbreaks.  This means that full year profitability is still set to be in line with market expectations.  Interim results are due out on 30 April but the shares look good value, meaning they are a SPECULATIVE BUY.

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