Ultimate Products has announced that it expects it financial year end net debt to be in the region of £15m, significantly ahead of current market expectations of around £21m.
Current trading remains in line with market expectations, which due to the improved net debt position, is expected to result in a substantially improved net bank debt/adjusted EBITDA ratio of 0.7x as at 31 July 2023.
The improved net debt performance is due to ongoing improvements in working capital management and the phasing of trading during the second half of the year.
The group is pleased that the lower net debt help to mitigate the current finance cost increases, caused by interest rates. The group also holds a suite of hedging instruments composed of a number of interest rate caps and swaps, greatly reducing the effect of rising interest rates on its income statement.
Lower net debt and hedged interest rates will continue to result in financing charges being in line with current market expectations of £1.2m for the current year, and £0.9m for 2024.
