REG - Portmeirion Group - Interim Results
14/09/2023 07:15
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RNS Number : 3810M Portmeirion Group PLC 14 September 2023
14 September 2023
PORTMEIRION GROUP PLC
('the Group')
Interim results for the six months ended 30 June 2023
H1 results reflect previously stated US retailer destocking
H2 started in line with expectations with a strong Christmas order book
Portmeirion Group PLC, the owner, designer, manufacturer and omni-channel
retailer of leading homeware brands in global markets, is pleased to announce
its results for the six months ended 30 June 2023.
Financial summary
H1 2023 H1 2022 FY 2022
£m £m £m
Revenue 44.1 45.5 110.8
Headline profit before tax(1) 0.0 2.0 8.0
(Loss)/profit before tax (0.1) 1.0 7.0
Headline EBITDA(1) 2.8 4.3 13.2
EBITDA 2.7 3.3 12.1
Headline basic (loss) / earnings per share(1) (0.12p) 12.00p 46.59p
Basic (loss) / earnings per share (0.82p) 5.72p 40.39p
Dividends proposed and paid per share in respect of the period 3.50p 3.50p 15.50p
Financial
● H1 Group revenue of £44.1 million, a decrease of 3% compared to the record
prior year sales (H1 2022: £45.5 million); as previously stated this is
reflective of increased caution on ordering from US customers, in particular
the destocking by retailer customers.
● Headline profit before tax(1) was £0.0 million (H1 2022: £2.0 million).
● H1 headline operating profit margin(1) of 1.6% was impacted by the fall in
revenue (H1 2022: 4.3%) and gross margin reduction.
● H1 gross margin impacted by peak inflation in stock due to container freight
rates which are expected to subside through H2 2023 and 2024.
● Solid growth in the UK, South Korea and rest of world markets.
● Headline basic loss per share(1) of 0.12p (H1 2022: earnings per share of
12.00p).
● Interim dividend declared of 3.50p per share (H1 2022: 3.50p).
● Strong balance sheet maintained with like-for-like inventory reduction of 5%
since FY 2022 and further reduction expected in H2 2023.
● Net debt is £15.0 million but we expect this to reduce below FY 2022 levels
(FY 2022: £10.1 million) by year end as working capital unwinds and we
maintain significant headroom within current borrowing facilities.
(1)Headline profit before tax, headline EBITDA, headline operating margin and
headline basic earnings per share excludes exceptional items - see note 3.
Operational summary
● Improved productivity in Stoke-on-Trent ceramic factory maintained through
ongoing automation programme.
● Spode brand continues to grow, with further benefit expected in H2 from new
collaboration with Kit Kemp Design Studio and further new product development
in Spode Christmas Tree range.
● Rest of world ceramic sales continue to grow, diversification being a key part
of our long term growth strategy, with further growth expected in H2.
● Home fragrance division benefits from adding AromaWorks London brand with
sales growth and factory now operating at a more efficient level. We expect
growth and improved profitability in H2.
● Launch of new sustainability strategy 'Crafting a Better Future' demonstrates
the Group's commitment to becoming a more sustainable business. In H1 we were
pleased to reduce gas and electricity usage by 6% compared to the prior year.
Current Trading & Outlook
● H2 has started in line with our expectations and we have a strong Christmas
order book, which is ahead of the same period last year.
● We expect FY sales and profit to be in line with consensus market expectations
which were revised in July as a result of North American retailer destocking.
● We remain committed to our long term ambition of rebuilding operating margins.
Mike Raybould, Chief Executive, commented:
"As previously indicated, the Group has seen reduced order flow in H1 2023
across our North American market. This has been particularly noticeable
amongst retail customers reducing stock levels. However we are confident that
in the past few years we have made lasting market share gains in the US and
have further incremental product listings agreed across key US department
store chains for H2 2023. Together with new product launches we therefore
expect that sales in our US and Canadian markets will stabilise and return to
growth in due course.
We are successfully controlling overheads despite the significant inflationary
environment and will continue to target further global synergies in our cost
base over the next 12 months. Alongside ongoing improved factory productivity
in our Stoke site and as global container shipping rates return to historical
levels, we remain confident of delivering our medium and long term operating
margin growth targets.
We have made great strides on both operational and commercial fronts in the
last few years and our brands continue to resonate well with consumers around
the world."
Portmeirion Group PLC:
Mike Raybould, Chief Executive +44 (0) 1782 743 443 mraybould@portmeiriongroup.com
David Sproston, Group Finance Director +44 (0) 1782 743 443 dsproston@portmeiriongroup.com
Hudson Sandler:
Dan de Belder +44 (0) 207 796 4133 portmeirion@hudsonsandler.com
Nick Moore
Emily Brooker
Shore Capital: +44 (0) 207 408 4090
(Nominated Adviser and Joint Broker):
Patrick Castle Corporate Advisory
Lucy Bowden Corporate Broking
Malachy McEntyre
Singer Capital Markets
(Joint Broker): +44 (0) 207 496 3000
Peter Steel Investment Banking
Asha Chotai
NOTES TO EDITOR:
Portmeirion Group PLC is a leading, omni-channel British ceramics manufacturer
and retailer of leading homeware brands.
Based in Stoke-on-Trent, United Kingdom, the Group owns six unrivalled
heritage and contemporary brands, with 750+ years of collective heritage;
Portmeirion, Spode, Royal Worcester, Pimpernel, Wax Lyrical and Nambé.
The Group serves markets across the world, with global demand driven by
diversified international markets including the key geographies of the US, UK
and South Korea.
Portmeirion Group has a proven capital-light, well developed and self-funded
growth strategy focused on building a wider customer base and growing the
sales footprint of its brands, through:
· Building and growing international sales markets
· Developing online sales channels in core markets
· Designing and launching new product to widen appeal and take market
share
· Leveraging brands and extensive product ranges
Interim Review
Financial highlights
Revenue was £44.1 million for the first six months of the year, a decrease of
3% over the record prior year sales (H1 2022: £45.5 million).
Our operating performance was negatively impacted by the sales reduction;
headline operating profit(1) was £0.7 million (H1 2022: £2.0 million). This
left the Group's operating margin at 1.6% for the first half of the year (H1
2022: 4.3%).
Due to the reduced operating margin performance and increased interest costs,
headline profit before tax(1) was £nil (H1 2022: £2.0 million).
Headline basic loss per share(1) was 0.12p (H1 2022: earnings per share of
12.00p).
(1) Headline profit before tax, headline operating profit and headline
earnings per share excludes exceptional items (see note 3).
Operational overview
The Group's largest sales market, North America (the US and Canada), accounted
for 33% of total Group revenue. Sales were 13% behind the first half of 2022
at £14.4 million (H1 2022: £16.7 million) as major retailers undertook
aggressive destocking ahead of anticipated fears of a slowdown in consumer
spending. Where we have retailer sales out data to the end consumer, this
evidences that demand remains robust and we therefore believe our diversified
range of products and sizeable online penetration will result in an improved
trading performance once this destocking exercise is complete.
Our second largest market is the UK, which accounted for 27% of total Group
sales. Sales were slightly ahead of prior year at £11.7 million (H1 2022:
£11.5 million) as we benefitted from additional sales from the AromaWorks
London brand that the Group acquired in August 2022. We are closely monitoring
the impact of inflationary pressures on consumer spending but currently this
market is performing in line with our expectations.
In South Korea, our third largest market accounting for 32% of total Group
revenue, sales grew by 7% to £14.3 million (H1 2022: £13.4 million) as we
continued our strategy of increasing online exposure of our brands and
diversifying our ranges. We have introduced new ranges in this market but
expect both the increasing impact of inflation and currency movement to impact
consumer sentiment in the short term.
In our rest of world markets, sales were down 4% over the same period in 2022
at £3.7 million (H1 2022: £3.8 million). The prior year included some Q1
sales to Russia/Eastern Europe and some loss-making home fragrance contracts
which we have since discontinued; excluding these, underlying ceramic sales
were 10% ahead of the prior year as part of our long-term strategy.
We continue to invest in new products for our customers around the world, and
are pleased with the initial performance of a number of new ranges including
the new Spode collaboration with the Kit Kemp Design Studio.
Balance sheet
The Group ended the first half of 2023 with net debt of £15.0 million at 30
June 2023; this compares to net debt of £6.8 million at 30 June 2022 and net
debt of £10.1 million at 31 December 2022. In addition to the cash balance of
£1.5 million and bank borrowings of £16.4 million, the Group also has
unutilised bank facilities of £10.1 million. The increase in net debt since
30 June 2022 is largely driven by working capital movements, with higher
receivables due to customer mix and lower payables due to reduced inventory
purchasing. We expect both of these movements to unwind in H2.
Our stock balance at 30 June 2023 was £42.1 million compared to £42.6
million at 30 June 2022 and £41.1 million at 31 December 2022. Excluding the
impact of AromaWorks London inventory (brand acquired in August 2022) and
seasonal shipping timing, we have reduced inventory from both June 2022 and
December 2022 on a like-for-like basis by 5%. We have a number of initiatives
in the second half of 2023 which should see further reductions in inventory
and an improved net debt position by 31 December 2023 compared to the prior
year end.
Dividend
The Board is committed to a dividend policy which ensures we retain and invest
enough capital in our business to drive long-term growth in our brands and
maintain a prudent and sustainable level of dividend cover.
Despite the short term challenges in the Group's trading performance, we
expect to generate cash in the current financial year and with our medium term
expectations for profit and cash generation, the Board is declaring an interim
dividend of 3.50p per share (2022: 3.50p). The interim dividend will be paid
on 15 December 2023. The ex-dividend date will be 16 November 2023 with a
record date of 17 November 2023.
The cover for dividends paid and proposed for 2022 was 3.0 times. We remain of
a view that a dividend cover level of approximately 3.0 times is in the
long-term interest of the Group and shareholders.
Environmental, Social and Governance (ESG)
In May 2023, the Group launched a new sustainability strategy and roadmap
entitled 'Crafting a Better Future' which outlines the Group's commitment to
becoming a more sustainable business. The launch represents the next level of
ambition for the Group - to ensure that we continue to reduce our impact on
the environment and support our colleagues and communities.
We continue to drive our progress on reducing our energy consumption and in H1
reduced gas and electricity usage by 6% compared to the prior year.
Further details on our ESG commitments and integration within the Group can be
found on our website, www.portmeiriongroup.com, and in the Section 172(1)
statement - Engaging with key stakeholders, Our commitment to ESG and the
Corporate Governance Statements in our Annual Report and Accounts.
Corporate governance
The Group is a committed member of the Quoted Companies Alliance ("QCA") and
has chosen to apply the QCA Corporate Governance Code, complying with its
principles throughout the period. Further details can be found on our website
at www.portmeiriongroup.com/investors.
The Board keeps its composition and performance under review to ensure that we
have the appropriate skills and experience in place to deliver our strategy.
In June 2023, the Group announced that Jeremy Wilson had been appointed as a
Non-executive Director.
Group Strategy
Our homeware brands have a combined history of more than 750 years and are
much loved around the world.
We remain focused on our strategic goal of growing the sales footprint of the
business over the next 3-5 years. We plan to do that by continuing to develop
our key heritage ranges through product extensions and developing new sales
channels to reach new customers, whilst at the same time increasing our market
share in contemporary and giftware homewares through launching beautifully
designed new products and leveraging these new ranges across our existing
global sales infrastructure.
Our strategy remains to return operating margins back to historical levels
with a medium-term target of reaching 10%.
Further detail on executing our growth strategy
1. Geography - building and growing sales markets outside of our three
core markets of North America, UK and South Korea
Rest of World ceramic sales markets (excluding Russia/Eastern Europe) grew by
10% in H1 2023. Our products are sold in more than 80 countries around the
world. Our three core markets of North America, UK and South Korea accounted
for 92% of Group sales in H1 2023.
We continue to see a significant opportunity to grow the contribution from
sales outside of core markets over the next 3-5 years.
2. Online - further developing online sales channels in our core markets
reaching more potential customers on more occasions
In our core UK and US markets, sales through all online channels accounted for
48% of sales (H1 2022: 52%, FY 2022: 51%). In addition, we continued to build
our online presence in international markets including South Korea.
For our own websites, our customer lists continue to grow and are now 10%
larger than twelve months ago. This has allowed us to reduce investment in
traffic acquisition spend and drive an improved operating margin performance
for our online sales.
3. Designing and launching new products - widening the appeal with our
existing customer base and taking market share
Sales from new product launches in H1 2023 accounted for in excess of 10% of
the Group's total sales, with a strong roadmap of new launches for the next 18
months.
We expect to see further strengthening of this KPI due to our investment in
this area.
4. Leveraging our brands
We continue to invest in our six global brands and work on leveraging the
strength of our brands outside of their current core markets.
Our Spode brand has grown again in H1 2023 and we expect further benefits in
H2 2023 from the new collaboration with Kit Kemp Design Studio.
Returning our operating margin to 12.5% in the long term
1. Improving productivity in our UK factories through investment in
automation to reduce manual handling
We continue to invest in our UK factories and have a number of new automation
investments being installed over the remainder of 2023 which will reduce
manual handling and increase our pieces output per labour hour.
Productivity in our UK ceramic factory was maintained in H1 2023 despite a
small reduction in output as we balance inventory levels.
2. Leveraging our fixed cost base as we grow top line sales
We still see a significant opportunity to grow our sales footprint over the
next 3-5 years which will enable us to leverage our spare factory capacity and
improve capabilities in our UK factories and our existing sales and
distribution infrastructure around the world.
3. Improving the profitability of our home fragrance division back to
pre-Covid levels
Wax Lyrical, our home fragrance division, had a positive H1 2023 with both an
improved sales and profit performance.
In 2022 we purchased the AromaWorks London brand and have now absorbed the
manufacturing of all of its product ranges within the existing capacity at our
Wax Lyrical factory in Cumbria, UK. This has driven better recovery of fixed
overheads and we expect the home fragrance division to return to profitability
for the full year.
Outlook
We are cognisant of the ongoing challenges facing consumers around the world
with significant inflationary cost pressures and rising interest rates. Whilst
in the short term this will continue to impact consumer spending decisions, we
expect demand for our brands to remain robust. We expect retailer customer
stock levels to stabilise after a period of destocking during the first half.
The second half of the year has started in line with our expectations and we
have strong advance order books for our key Christmas ranges which are ahead
of last year and provide us with good visibility of H2 sales. We will also
continue to mitigate economic pressures by bringing new products to the
market. We expect FY sales and profit to be in line with consensus market
expectations which were revised in July as a result of North American retailer
destocking.
Despite short term pressures, we remain confident in our medium and long term
ambitions to grow our sales and operating margins. We have taken market share
in key markets in recent years, particularly in the US - and together, with
the ongoing work to increase productivity through investments in our
factories, will drive much improved levels of profitability in the medium
term.
Dick Steele Mike Raybould
Non-executive Chairman Chief Executive
Consolidated Income Statement
Unaudited
Notes Six months to 30 June Six months to 30 June 2022 Year to
2023 £'000 31 December 2022
£'000 £'000
Revenue 2 44,122 45,467 110,820
Operating costs (43,408) (43,510) (102,154)
Headline operating profit(1) 714 1,957 8,666
Exceptional items 3
- restructuring costs (124) (1,006) (958)
- acquisition costs - - (76)
Operating profit 590 951 7,632
Interest income - - 29
Finance costs 4 (703) (212) (956)
Other income - 265 265
Headline profit before tax(1) 11 2,010 8,004
Exceptional items 3
- restructuring costs (124) (1,006) (958)
- acquisition costs - - (76)
(Loss)/profit before tax (113) 1,004 6,970
Tax 5 - (218) (1,415)
(Loss)/profit for the period attributable to equity holders
(113) 786 5,555
Earnings per share 7
Basic (0.82p) 5.72p 40.39p
Diluted (0.82p) 5.70p 40.35p
Headline earnings per share(1) 7
Basic (0.12p) 12.00p 46.59p
Diluted (0.12p) 11.97p 46.54p
Dividends proposed and paid per share 6 3.50p 3.50p 15.50p
All the above figures relate to continuing operations.
(1)Headline operating profit is statutory operating profit of £590,000 (H1
2022: £951,000) add exceptional items of £124,000 (H1 2022: £1,006,000).
Headline profit before tax is statutory loss before tax of £113,000 (H1 2022:
profit before tax of £1,004,000), add exceptional items of £124,000 (H1
2022: £1,006,000).
Consolidated Statement of Comprehensive Income
Unaudited
Six months
to 30 June Six months Year to
2023 to 30 June 31 December
£'000 2022 2022
£'000 £'000
(Loss)/profit for the period (113) 786 5,555
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of net defined benefit pension scheme asset - - (1,517)
Deferred tax relating to items that will not be reclassified subsequently to
profit or loss
- - 380
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (1,050) 2,082 2,466
Other comprehensive income for the period (1,050) 2,082 1,329
Total comprehensive income for the period attributable to equity holders
(1,163) 2,868 6,884
Consolidated Balance Sheet
Unaudited
30 June
2023 30 June
£'000 2022 31 December
£'000 2022
£'000
Non-current assets
Goodwill 9,467 8,978 9,416
Intangible assets 9,119 7,176 8,581
Property, plant and equipment 16,640 16,326 16,842
Right-of-use assets 5,820 6,366 5,869
Pension scheme surplus 617 1,360 317
Total non-current assets 41,663 40,206 41,025
Current assets
Inventories 42,100 42,597 41,117
Trade and other receivables 17,319 13,998 19,887
Current income tax asset 121 649 792
Cash and cash equivalents 1,460 3,189 1,681
Total current assets 61,000 60,433 63,477
Total assets 102,663 100,639 104,502
Current liabilities
Trade and other payables (12,938) (18,188) (16,469)
Borrowings (14,436) (6,044) (8,789)
Lease liabilities (1,239) (1,842) (1,696)
Total current liabilities (28,613) (26,074) (26,954)
Non-current liabilities
Deferred tax liability (3,213) (2,562) (3,230)
Borrowings (2,000) (3,977) (2,981)
Lease liabilities (5,058) (4,967) (4,654)
Total non-current liabilities (10,271) (11,506) (10,865)
Total liabilities (38,884) (37,580) (37,819)
Net assets 63,779 63,059 66,683
Equity
Called up share capital 710 710 710
Share premium account 18,344 18,344 18,344
Investment in own shares (3,108) (3,124) (3,108)
Share-based payment reserve 58 160 148
Translation reserve 2,602 3,268 3,652
Retained earnings 45,173 43,701 46,937
Total equity 63,779 63,059 66,683
Consolidated Statement of Changes in Equity
Unaudited
Share-based payment
Share Investment reserve
Share premium in own £'000 Translation Retained
capital account shares reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 710 18,344 (3,124) 128 1,186 44,703 61,947
Profit for the period - - - - - 786 786
Other comprehensive income for the period
- - - - 2,082 - 2,082
Total comprehensive income for the period
- - - - 2,082 786 2,868
Increase in share-based payment reserve
- - - 32 - - 32
Dividends paid - - - - - (1,788) (1,788)
At 30 June 2022 710 18,344 (3,124) 160 3,268 43,701 63,059
Profit for the period - - - - - 4,769 4,769
Other comprehensive income for the period
- - - - 384 (1,137) (753)
Total comprehensive income for the period
- - - - 384 3,632 4,016
Dividends paid - - - - - (481) (481)
Increase in share-based payment reserve
- - - 59 - - 59
Transfer on exercise or lapse of options
- - - (71) - 71 -
Shares issued under employee share schemes
- - 16 - - (16) -
Deferred tax on share-based payment
- - - - - 30 30
At 31 December 2022 710 18,344 (3,108) 148 3,652 46,937 66,683
Loss for the period - - - - - (113) (113)
Other comprehensive income for the period
- - - - (1,050) - (1,050)
Total comprehensive income for the period
- - - - (1,050) (113) (1,163)
Decrease in share-based payment reserve
- - - (90) - - (90)
Dividends paid - - - - - (1,651) (1,651)
At 30 June 2023 710 18,344 (3,108) 58 2,602 45,173 63,779
Consolidated Statement of Cash Flows
Unaudited
Six months Year to
to 30 June 2023 Six months 31 December
£'000 to 30 June 2022
2022 £'000
£'000
Operating profit 590 951 7,632
Adjustments for:
Depreciation of property, plant and equipment 686 895 1,810
Depreciation of right-of-use assets 988 1,008 1,881
Amortisation of intangible assets 434 408 813
Charge for share-based payments (90) 32 91
Exchange gain/(loss) 618 (193) (559)
Loss on disposal of tangible fixed assets - 269 251
Operating cash flows before movements in working capital 3,226 3,370 11,919
Increase in inventories (2,052) (11,388) (9,869)
Decrease in receivables 2,104 6,100 239
(Decrease)/increase in payables (3,275) 754 (643)
Cash generated from/(used by) operations 3 (1,164) 1,646
Contributions to defined benefit pension scheme (300) (450) (900)
Interest paid (596) (114) (686)
Income taxes paid 587 (179) (300)
Net cash outflow from operating activities (306) (1,907) (240)
Investing activities
Interest received - - 5
Purchase of property, plant and equipment (753) (2,663) (4,093)
Purchase of intangible assets (1,007) (491) (1,933)
Other income - 265 265
Acquisition of subsidiary - - (821)
Net cash outflow from investing activities (1,760) (2,889) (6,577)
Financing activities
Dividends paid (1,651) (1,788) (2,269)
Principal elements of lease payments (1,086) (1,057) (1,864)
Drawdown of short term borrowings 11,916 4,060 6,803
Repayments of borrowings (7,250) (1,000) (2,000)
Net cash inflow from financing activities 1,929 215 670
Net decrease in cash and cash equivalents (137) (4,581) (6,147)
Cash and cash equivalents at beginning of period 1,681 7,616 7,616
Effect of foreign exchange rate changes (84) 154 212
Cash and cash equivalents at end of period 1,460 3,189 1,681
Notes to the Interim Financial Information
1. Basis of preparation
The financial information included in the interim results announcement for the
six months to 30 June 2023 was approved by the Board on 13 September 2023.
The interim financial information for the six months to 30 June 2023 has not
been audited or reviewed and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The Company's statutory
accounts for the year ended 31 December 2022 were prepared in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006.
The interim financial information has been prepared in accordance with IFRS on
the historical cost basis, except that some derivative financial instruments
are stated at their fair value. The same accounting policies, presentation and
methods of computation are followed in the interim financial statements as
were applied in the Group's last audited financial statements for the year
ended 31 December 2022.
Statutory accounts for the year ended 31 December 2022 have been delivered to
the Registrar of Companies.
Going concern
The Directors, having made suitable enquiries and analysis of the accounts,
consider that the Group has adequate resources to continue in business for the
foreseeable future. In making this assessment, the Directors have considered
the Group's current trading performance and available banking facilities with
appropriate headroom in facilities and financial covenants.
There remains ongoing challenges in our sales markets around the world caused
by the negative impact of the cost of living crisis, but the Group remains
well-diversified with adequate funding headroom available.
The Group has also produced a sensitivity analysis to its cash flow forecast
based upon possible downside scenarios. We have modelled a 10% sales reduction
to assess the potential negative impact of a significant downturn in trading
performance. This demonstrated the Group still has sufficient headroom within
borrowing facilities and loan covenants.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of condensed consolidated interim financial statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those detailed on pages 80-81 of the Group's 2022 Financial
Statements.
Notes to the Interim Financial Information
Continued
2. Segmental analysis
The following tables provide an analysis of the Group's revenue by operating
segment and geographical market, irrespective of the origin of the products:
Six months Six months Year to
to 30 June to 30 June 31 December 2022
Operating segment 2023 2022 £'000
£'000 £'000
UK 29,547 27,567 59,753
North America 14,575 17,900 51,067
44,122 45,467 110,820
Six months Six months Year to
to 30 June to 30 June 31 December 2022
Geographical market 2023 2022 £'000
£'000 £'000
United Kingdom 11,703 11,531 28,255
North America 14,422 16,659 48,944
South Korea 14,333 13,443 26,656
Rest of the World 3,664 3,834 6,965
44,122 45,467 110,820
3. Exceptional items
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Restructuring costs 124 1,006 958
Acquisition costs - - 76
124 1,006 1,034
Exceptional costs relate to a restructuring exercise undertaken within the
Group. All of these costs are exceptional in nature and non-recurring.
4. Finance costs
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Interest paid 596 121 686
Interest on lease liabilities 107 91 270
703 212 956
Notes to the Interim Financial Information
Continued
5. Taxation
Tax for the interim period is charged at 0% (year to 31 December 2022: 20%)
due to a loss being incurred during the period. The expected weighted average
annual corporation tax rate for the year is 23%.
6. Dividend
An interim dividend of 3.50p (2022: 3.50p) per ordinary share will be paid on
15 December 2023 to shareholders on the register on 17 November 2023. During
the period a final dividend of 12.00p (2022: 13.00p) per ordinary share was
paid in respect of the previous financial year.
7. Earnings per share
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Earnings
Earnings for the purpose of basic and diluted earnings per share, being profit (113) 786 5,555
for the period attributable to equity holders
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Number of shares
Weighted average number of shares for the purpose of basic earnings per share
13,759,282 13,750,919 13,753,233
Weighted average dilutive effect of conditional share awards
13,658 33,507 14,773
Weighted average number of shares for the purpose of diluted earnings per 13,772,940 13,784,426 13,768,006
share
The calculation of basic and diluted headline earnings per share is based on
the following data:
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Profit for the period attributable to equity holders (113) 786 5,555
Add back/(deduct):
Exceptional items 124 1,006 1,034
Tax effect of exceptional items (28) (142) (182)
Headline earnings (17) 1,650 6,407
Notes to the Interim Financial Information
Continued
8. Reconciliation of earnings before interest, tax, depreciation and
amortisation (EBITDA)
Headline EBITDA
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Headline operating profit 714 1,957 8,666
Add back:
Depreciation 1,674 1,903 3,691
Amortisation 434 408 813
Headline earnings before interest, tax, depreciation and amortisation 2,822 4,268 13,170
Statutory EBITDA
Six months Six months Year to
to 30 June to 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Operating profit 590 951 7,632
Add back:
Depreciation 1,674 1,903 3,691
Amortisation 434 408 813
Earnings before interest, tax, depreciation and amortisation 2,698 3,262 12,136
9. Retirement benefit schemes
Defined benefit scheme
The defined benefit obligation as at 30 June 2023 is calculated on a
year-to-date basis, using the latest actuarial valuation as at 31 December
2022 adjusted for payments to the scheme in line with the Schedule of
Contributions.
There have been no significant market fluctuations and significant one-off
events, such as plan amendments, curtailments and settlements that have
resulted in an adjustment to the actuarially determined pension cost since the
end of the prior financial year.
The Group has made contributions of £300,000 to the scheme during the period.
10. Related party transactions
The Group's related parties are as disclosed in the Report and Accounts for
the year ended 31 December 2022. There were no material differences in related
parties or related party transactions in the six months ended 30 June 2023
except for transactions with key management personnel.
The most significant of these was on 2 May 2023, under The Portmeirion Group
2022 Approved and Unapproved Share Option Plans, when 50,000, 35,000, 35,000,
35,000 and 15,000 share options awards were granted to M Raybould, M Knapper,
W Robedee, D Sproston and M MacDonald respectively at an option price of
£4.69 per share when the market price was £4.69 per share.
In addition, on 2 May 2023, under The Portmeirion Group 2018 Deferred
Incentive Share Option Plan, 5,275, 2,686, 3,864 and 2,087 share option awards
were granted to M Raybould, M Knapper, W Robedee and D Sproston respectively
at a total exercise price of £1 per individual when the market price was
£4.69 per share.
11. Post balance sheet events
There were no post balance sheet events.
12. Availability of document
A copy of the interim results will shortly be available on the Company website
at www.portmeiriongroup.com.
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