- Consumer goods group UP Global Sourcing posted a 27% drop in annual profit and cut its dividend, as a tough UK retailing and environment and contract deferral from a big European customer crimped sales.

Pre-tax profit for the year through July fell to £5.4m, as revenue fell by a fifth to £87.6m.

The company declared a full-year dividend of 2.72p per share, down from 5.115p on-year.

The European customer, which the company did not identify, deferred revenue after it requested a change in supply arrangements from free-on-board to landed.

'The tougher trading environment for general merchandise in the UK was mainly caused by wage deflation, which in turn led to pressure on consumers' discretionary spend,' UP said.

'As a consequence, non-food sales have declined as consumers prioritised food purchases.'

'The decline in non-food has been particularly apparent in physical stores with the continued transition to online sales.'

Chief executive Simon Showman said current trading was in line with expectations, with the 2019 financial year order book ahead on-year.

'While the UK market looks set to remain challenging for the foreseeable future, we continue to look to the longer-term future with confidence given the viability of our strategy, our experience of managing difficult trading conditions, and our strong balance sheet,' Showman said.

At 9:41am: [LON:UPGS] UP Global Sourcing Holdings Plc share price was -1p at 37.5p

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