We have some exciting news to share! The Motley Fool UK has now become The Twelfth Magpie -- an independent, UK-owned company, led by our long-serving UK management team — Mark Rogers, Chris Nials and Heather Adlington. In practical terms, it’s the same team you know, now fully focused on serving our UK readers and members.

Just as importantly, our approach remains unchanged: long-term, jargon-free, and on your side. This site is our new home, and there will be extra tweaks made across the coming few days as we settle in. So if anything looks a little off, please bear with us!

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

This UK penny share has fallen nearly 50% this year. Should we snap it up?

When a penny share falls hard, it can create a cheap buying opportunity for investors. Let’s dig into the reasons this one fell.

| More on:
Finger clicking a button marked 'Buy' on a keyboard

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Twelfth Magpie’s Premium Investing Services. Become a member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more, and get a free 'Best Buy Now' stock!.

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.

Should you buy Ultimate Products Plc shares today?

Before you decide, please take a moment to review this report first. Despite ongoing uncertainties from US tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.

That’s why this could be an ideal time to secure this valuable research – Mark’s analysts have scoured the markets to reveal 5 of his favourite long-term ‘Buys’. Please, don’t make any big decisions before seeing them.

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.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

House models and one with REIT - standing for real estate investment trust - written on it.
Investing Articles

How investing £4.50 a day could set you on the way to a £1,505 monthly second income

How can UK stocks with high dividend yields help investors earn a meaningful second income from the price of a…

Read more »

Investing Articles

Up 103% with a P/E of 261 — is this FTSE 100 stock still worth buying?

One FTSE 100 stock is quietly moving higher while most investors are still looking elsewhere — is the market missing…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

The smart money thinks AI stocks look risky — but is there still a chance to buy?

According to fund managers, the AI trade is getting crowded. But they still seem to think it’s the place to…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Barclays shares are 11% below their 52-week high. Could they be a bit of a bargain to consider?

Overpriced or one of the FTSE 100’s hidden gems? James Beard takes a closer look at how the market is…

Read more »

Stack of one pound coins falling over
Investing Articles

Down 65% but yielding 6.7% – is this beaten-down UK stock now a generational bargain?

Harvey Jones says this UK stock is one of the worst FTSE 100 performers but there are sound reasons to…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Is this FTSE stock really 46% undervalued?

Analysts reckon this FTSE stock should be worth nearly 50% more. James Beard considers why there’s so much positivity surrounding…

Read more »

Front view of a young couple walking down terraced Street in Whitley Bay in the north-east of England they are heading into the town centre and deciding which shops to go to they are also holding hands and carrying bags over their shoulders.
Investing Articles

How much is needed in an ISA for passive income that covers the UK’s monthly average rent of £1,381?

The UK’s monthly average rent for May 2026 is £1,381. Muhammad Cheema looks at how much is needed to aim…

Read more »

A rear view of a female in a bright yellow coat walking along the historic street known as The Shambles in York, UK which is a popular tourist destination in this Yorkshire city.
Investing Articles

How have BAE Systems shares become a dividend powerhouse? 5 reasons why!

Dividends on BAE Systems shares have risen every year without fail since the early 2000s. So what's the FTSE 100…

Read more »