Shares round-up: dramatic day for Ultimate Products and THG

It’s a case of very different fortunes for these two small-cap shares. City writer Graeme Evans explains why they’ve just headed in opposite directions.

25th June 2025 13:34

Graeme Evans from interactive investor

Analysts predicted significant upside for shares of both THG Ordinary Share (LSE:THG) and Ultimate Products (LSE:ULTP) after the pair experienced contrasting fortunes in the FTSE All-Share.

THG rallied 4p to its highest level since April at 32.2p, having reported the Nutrition division’s fastest growth since early 2022 during a “much improved” second quarter.

Ultimate Products, which owns homeware brands including Salter and Beldray, received backing after its lower guidance due to weak consumer trends sent shares down 20.8p to 53.4p.

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Analysts at Jefferies and Peel Hunt reckon there’s further to go for the recovery of THG shares, which are still half the price of a year ago.

Jefferies has a target of 65p, backing THG to demonstrate its potential now that it has absorbed the effects of tariffs, elevated whey prices and last year’s Ingenuity e-commerce demerger.

The bank anticipates that 2026 will be a template for future years as robust growth in both the Beauty and Nutrition drops through into strong cash generation.

It added: “The shares have had a weak run, but with momentum building and forecasts stabilised, we see clear upside.”

THG returned to constant currency revenue growth in the second quarter, with the Myprotein-led Nutrition division set for an advance of between 5% and 7%.

From a largely standing start three years ago, THG said Nutrition's offline strategy had gained significant traction after products were made available within the UK, US and Japan.

Meanwhile, the Beauty division behind brands including Lookfantastic and Cult Beauty has made significant quarter-on-quarter progress based on expectations for a revenue decline of between 2% and 3%.

Peel Hunt reiterated its Buy recommendation and price target of 80p after the update, which included unchanged guidance for the full year. It said: “Improved trading momentum should lift confidence and benefit the share price.”

The shares of Ultimate Products are trading at their lowest level since the early days of the pandemic after it said that recent sales have been weighted towards lower-margin product categories and sales channels.

Alongside a 4% decline on last year’s full-year revenues of £155.5 million, it forecast adjusted earnings of £12.5 million compared with the City consensus of £14.3 million.

The group, which markets non-electrical Russell Hobbs products under licence, added that the caution of retail customers meant over £4 million of orders have been deferred to the first quarter of the next financial year.

The group’s best-selling product range is Salter, which was established in 1760 and is the UK’s oldest housewares brand. Its sales fell 15% to £56.3 million in the 2024 financial year, a decline driven by a reduction in demand for air fryers.

Over the past decade, group sales have increased by over £100 million at a compound annual growth rate of 12% after it concentrated on growing branded product sales across four strategic pillars of supermarkets, discounters, online and international.

It has also used robotic automation, AI and process change to deliver improvements to its branding and product development, a strategy it now intends to replicate within the sales function.

Chief executive Andrew Gossage said: “Ultimate Products has demonstrated time and time again its resilience in the toughest of circumstances, and despite the near-term uncertainty we remain as confident as ever in our long-term prospects.”

With shares down from 140p last summer, the company today received strong buying interest from interactive investor customers as one of the top 10 most-traded stocks on our platform.

In the City, Equity Development cut its price target from 165p to 135p but said the valuation failed to reflect the embedded value of owned brands such as Salter and the laundry and floorcare products business Beldray.

The investment research firm added that both brands were still in the relatively early stages of their post-rebrand trading phases and that Europe also continued to offer scope for like-for-like sales growth.

Counterparts at Cavendish lowered their price target from 120p to 85p as a result of today’s downgraded guidance.

They said: “Management is obviously disappointed with the performance amid the tougher environment but is taking positive action to improve the operational performance of the sales function, which should be a driver for improved top-line performance in the medium term.”

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