REG - Portmeirion Group - Preliminary Results
31/03/2025 07:15
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RNS Number : 7943C Portmeirion Group PLC 31 March 2025
31 March 2025
Portmeirion Group PLC
(the "Group")
Preliminary results for the year ended 31 December 2024
Sales performance reflects challenging global economic backdrop.
Cautious optimism for 2025 with strategic priorities to restore profitable
growth.
Portmeirion Group PLC, the global homewares brands group, announces its
preliminary results for the year ended 31 December 2024.
Commenting on the Group's performance Mike Raybould, Chief Executive said:
"2024 was a disappointing year and our financial performance overshadowed good
growth in our Spode brand and improved profitability in the US, our largest
sales market. Our customers reported strong sell through of our collections
during the key Christmas period and Wax Lyrical, our home fragrance business
also saw strong top and bottom line growth.
Action is being taken across our operations to position the business for
sustainable future growth and we are moving forward with clear priorities to
return our established markets to growth, strengthen our balance sheet, invest
in our premium brands and develop new international markets. Trading in 2025
has started positively and we are cautiously optimistic at this early point in
the year, mindful of the headwinds many businesses are facing in this
uncertain economic climate."
Financial overview
Key performance indicators ((1))
2024 2023 Change
£m £m %
Revenue 91.2 102.7 (11.2)
Headline profit before tax((2)) 1.1 3.0 (63.3)
Statutory profit/(loss) before tax 0.0 (8.5) 100.0
Headline basic earnings per share((2)) 8.04p 21.36p (62.4)
Statutory basic earnings/(loss) per share((5)) 2.50p (61.46)p 104.1
Dividends paid and proposed per share (total in respect of the year) 1.50p 5.50p (72.7)
Free cash flow((3)) (3.7) 4.4 (184.1)
Net debt((4)) (12.1) (7.9) (53.2)
Notes:
(1) The key performance indicators (KPIs) have been reviewed and changed
to those KPIs shown above which ensure focus on growing the business and
profit and strengthening our balance sheet.
(2) Headline measures exclude exceptional costs.
(3) Free cash flow is a measure of a company's financial health
representing cash that remains available to reinvest in the operations or
distribute to shareholders after the cost of supporting its operations. This
is calculated as net cash inflow from operating activities plus net cash
outflow from investing activities plus capital elements. All of which is
available on the Consolidated Statement of Cash flows.
(4) Net debt is a financial liquidity measure that nets the company's cash
and cash equivalents against its interest bearing debt.
(5) See EPS note 2
Summary
· Revenue down 11% to £91.2m (2023: £102.7m) against the backdrop of
a much tougher consumer market and reflecting the significant downturn in the
Group's South Korean market. Revenue excluding the South Korean market and at
constant currency was broadly flat on the prior year, down 1%.
· Headline profit before Tax down 63% to £1.1m (2023: £3.0m) due to
the decline in sales in our South Korean market and its consequential impact
on factory utilisation. Profit in line with December's trading update and
forecast.
· Net profitability up 18% to £4.2m (2023: £3.6m) in the US, our
largest sales market, despite supply chain delays limiting Q4 sales.
· Free cash outflow of £3.7m (2023: £4.4m inflow). Cash flow
generated from operations +£2.1m (2023: +£10.8m).
· Net debt up £4.2m, due to higher stock levels, largely due to South
Korea, and later invoicing of Christmas collections in the US.
· Interim dividend paid of 1.5 pence per ordinary share at the half
year with no dividend recommended for the full year as priority focus is to
reduce net debt.
· Spode sales up 5% at constant currency 1 (#_ftn1) , fourth
consecutive year of growth, now up c.45% since 2019.
· Wax Lyrical sales up 25% to £16.1m; due to gaining further new
listings in national retailers.
· Overhead costs down 13% (£5.3m), to provide a leaner base for future
operating margin improvement.
· Ongoing automation investments in our factories continue to drive
further operational improvements and efficiencies.
· Energy usage down 9% vs 2023 and 17% lower than 2022.
Current trading & outlook
· 2025 has started positively with actions currently underway on our
strategic priorities to strengthen operations and position the business for
sustainable future growth.
· The Board remains mindful of the challenges ahead in what continues
to be an uncertain economic environment and with a significant Q4 weighting
for the business.
· Transforming our business: announcing a number of near term
priorities for the business to drive transformation and improvements in
operational and financial performance.
Notes: This announcement contains inside information for the purposes of
the retained UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK
MAR").
ENQUIRIES:
Portmeirion Group PLC:
Mike Raybould, Chief Executive +44 (0) 1782 743 444
Jonathan Hill, Group Finance Director +44 (0) 1782 743 444
Houston:
Kate Hoare +44 (0)204 529 0549 portmeiriongroup@houston.co.uk (mailto:portmeiriongroup@houston.co.uk)
India Spencer
Shore Capital: +44 (0) 207 408 4090
(Nominated Adviser and Joint Broker):
Patrick Castle Corporate Advisory
Lucy Bowden
Malachy McEntyre Corporate Broking
Isobel Jones
Singer Capital Markets
(Joint Broker): +44 (0) 207 496 3000
Peter Steel Investment Banking
Asha Chotai
NOTES TO EDITOR:
Portmeirion Group PLC is a global homewares brand group based in
Stoke-on-Trent, England. The Group owns six unrivalled heritage and
contemporary brands; Spode, Portmeirion, 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 North America, the UK and South Korea.
Portmeirion Group PLC
Chairman's Statement
I present my first report as your Non-Executive Chairman having been appointed
to the Board of Portmeirion Group PLC on 1 February 2025. In our 36 years
history as a listed company I am your 4(th) Chairman and although I join the
Board after a period of disappointing performance and in a challenging global
economy, I am excited for the Group's future, by the craftsmanship, skill and
creativity I see across our operations, by the colleagues I have met and by
the customers I have spoken with.
Our company owns an exceptional portfolio of premium homeware brands, all with
rich and authentic origin stories renowned around the world for bold and
enduring creative designs and products which are made to the highest standards
of manufacture, for a loyal and growing customer base. The people in our
Group are experienced, skilled and passionate for our brands, and determined
to succeed. I look forward to working closely with my colleagues to improve
performance, return to growth and achieve our full potential over the long
term.
Our results in 2024 are disappointing. After three years of sales over
£100m and headline profits in 2022 peaking at £8.0m, Group sales fell by 11%
to £91.2m (2023: £102.7m) in 2024, 10% on a constant currency basis.
Headline profit before tax fell by 63% to £1.1m (2023: £3.0m) as a result of
a mix of global inflation, international supply chains disruption and
overstocking in one key market. The Group ended the year with net debt up by
53% at £12.1m (2023: £7.9m). We monitor our performance against key
performance measures, which are set out in the financial overview table above.
Nearly all our sales shortfall stemmed from one market - South Korea - which
experienced an unprecedented 45% fall in sales due to a significant stock
overhang at our key customers, just as the economic backdrop across Asia
tightened on our core customer. Substantial progress has been made to reduce
the stock overhang but it will take until 2027 to completely sell through and
return to our historic levels of sales in this market. Our brands and
products remain hugely popular in South Korea, and we have had success
introducing new brands and collections, but once again it is Portmeirion's
Botanic Garden collection which is our leading collection in the market.
Profits in our largest market, the US, improved vs 2023. US market performance
was adversely impacted by supply chain disruption resulting in many of our
Christmas ranges arriving late to customers, however the feedback on ultimate
seasonal sell through was very positive.
Our Spode brand has grown each of the last four years and is now up 45% on
pre-Covid levels. We see substantial opportunity to grow Spode brand sales
in established and new markets over the next 5 years.
Wax Lyrical, our home fragrance business also has good momentum. The brand
reported year-on-year sales growth of 25% and has returned to profitability.
Wax Lyrical continues to win listings in national retailers and we expect
further growth over the next few years driven by increased domestic and
international listings.
We continue to grow penetration in online channels around the world, including
our own US and UK websites which, in 2024, accounted for 9% of our sales.
Our inventory increased in the year by £2.3m to £38.2m driven by the
significant reduction in South Korea orders together with cancelled US
Christmas orders following late stock arrival after supply chain disruption.
An appropriate level of stock for the Group would be c£32.0m and our
ambition over the next 12-24 months is to turn the £6.0m surplus into cash,
hence reducing our debt, mindful to protect our brand and margins in all
markets.
We ended the year with net debt of £12.1m (2023 £7.9m); the increase driven
by the later invoicing of Christmas ranges in the US and higher inventory in
our Stoke-on-Trent factory due to the reduced order flow from our South Korean
market.
We reduced total overhead costs during the year by £5.3m, a reduction of
13%. A lean cost base will help mitigate unforeseen cost inflation, most
notably the impact of the Autumn Budget which increased our costs by £0.8m
(annualised) due to the rise in National Insurance Contributions and the
National Minimum Wage, with additional inflation expected in utilities.
Our objective is to develop our premium brands responsibly and to realise
their full growth potential over the long term, across different products,
channels and markets. This will maintain our reputation, as an owner of great
homeware brands, drive profitability and shareholder returns. More on our
Objectives and Strategy is set out below.
Dividend
The Board does not recommend payment of a final dividend and has prioritised
growth. To fund this growth we must invest, which requires us to first
strengthen our balance sheet. As a consequence this will reduce the
associated interest costs on our Profit & Loss account - which in 2024 was
a £1.6m cost to the business. Savings in interest costs, efficiencies and
growth will over time organically provide funds to enable us to make judicious
investments for growth, particularly in sales & marketing, to support our
premium brands in our established and international markets.
We are cognisant that a significant percentage of our shares are held by
individuals and we recognise that dividends can be a contributor to an
individual shareholders annual income and our overall total shareholder
return. Since floatation in November 1988, this enterprise has paid £57.8m
in ordinary dividends to its shareholders (not adjusted for inflation). My
priority is to put the Group in a strong position to compete globally and to
do this we must eradicate our debt, and maintain a 'Fortress Balance Sheet',
which I define as a growing net cash position, returning capital to our
shareholders from a position of strength and comfortably funded from the
earnings of an appropriately well invested business. I know we are far
from that position today, but we are on that path now.
Made In Stoke-on-Trent
Approximately 26% of our branded tableware products are made in our
Stoke-on-Trent factory and we intend to increase this over the next 24
months. This may have an initial impact on our gross margins due to the
cost of manufacturing in the United Kingdom, but it is a necessary margin
investment in our brands. I am confident that we will recover the margin
investment and reap substantial benefits over the medium term.
We will continue to work closely with our worldwide factory partners on
certain products lines and collections as they have a specific expertise and
consistently deliver high quality products.
TRANSFORMING OUR BUSINESS: OUR 2025-2026 PRIORITIES
As we begin the journey of transforming your business, I have reflected on the
challenges of 2024 and am pleased to announce a series of immediate
priorities, which the Board believes will position the Group to accelerate our
strategy and objectives below, and support a recovery of long-term, profitable
growth.
1. RETURN TO GROWTH IN OUR ESTABLISHED MARKETS
We are focused on returning our three established markets - US, South Korea
and UK - to stability and onto growth after a year of disruption. In the US,
we will accelerate in-stock dates for key Christmas collections and in South
Korea, we will continue to support our distributors and retail partners to
reduce stock levels. Across all markets we will develop our customer base,
introduce new collections and expand existing collections, develop our online
and eCommerce offer and exercise better control and oversight.
2. FORTRESS BALANCE SHEET
We are focused on generating cash and our intent is to repay our debt in full
over the next 2 to 3 years to maintain a net cash position. As we repay debt
we benefit from lower associated interest costs, which together with
efficiencies and growth, releases capital for investment in marketing our
premium brands in established and international markets.
3. INVEST IN OUR PREMIUM BRANDS
Our future success and prosperity depends on how we execute and develop our
premium brands globally over the next few years. We will spend more on brand
marketing in the years ahead, with certain brands seeing an anticipated c.5-8x
increase in spend from current levels as funds become available. Success
will not be instant. It requires commitment, consistency and patience, and as
we spend we will evaluate effectiveness. In all markets we will engage
direct with the end customer to introduce our brands, earn their trust and
loyalty, and in parallel support our retail partners and brand ambassadors to
drive sales for them and our own eCommerce.
We intend to completely overhaul and re-energise our own retail store
portfolio in the UK and our global eCommerce over the next 12 months to
improve our customers brand experience very markedly. Increasing the
proportion of branded product 'Made in Stoke-on-Trent' is an important
commitment to our customer and our brands.
4. EXPLORE & DEVELOP
International markets' are defined by 57 individual markets and account for 8%
of Group sales, and only three contribute more than £0.5m sales each. We
have the premium brands and collections to be successful in these markets, but
until we build a consistent brand presence and connect with our end customer,
growth will be hard fought. Our international sales team has been tasked to
explore these markets and will be focusing on developing a handful
initially. I am confident that we have the leadership and infrastructure in
place to be successful; we certainly have the determination and integrity.
Explore & Develop is not just about geography and markets, it applies
throughout the business. We have a history of innovation across the business
and at every level. We will explore the value and potential of our
extensive design archives whether that be for ceramic tableware, giftware, or
indeed licensing opportunities for other categories. We will continue to
develop new, beautiful product; to innovate and support not only existing
customers, but develop new customer demographics.
5. EXCELLENCE EVERYWHERE
There is real opportunity for improvement across the Group and every
colleague, at every level, across every department and geography can
contribute to our performance improvement and transform our business. We
will ingrain Excellence Everywhere in our everyday behaviours and actions and
at every level, our mindset will be one of brand first, attention to detail,
and continuous improvement everywhere. We have an open and entrepreneurial
culture and a determination to succeed. Our colleagues are encouraged to take
risks and learn from their mistakes to produce better results and generate a
positive impact.
Board
Clare Askem, Mick Knapper and Bill Robedee will not seek re-election
at the forthcoming AGM. I am delighted that both Mick and Bill will
continue in their present roles as Group Operations Director and President of
North America respectively. Clare has been a Non-executive Director
since August 2020 and Chair of the Remuneration Committee since April 2021
and I would like to record our collective thanks for the valuable
contributions Clare has made, particularly in retail and digital
transformation. Angela Luger, our Senior Non-Executive Director, will take
over as chair of the Remuneration Committee from the conclusion
of the AGM.
Our Group Board is suitably structured for the business we are today, with
appropriate skills and experience to contribute towards the transformation now
underway. I am confident that the Board will provide both challenge and
support to the Executive and Senior Leadership Team as they work towards
delivering our 2025-2026 Transformation Priorities and execute our long-term
strategy.
Outlook
2024 was undoubtedly a disappointing year. We have started 2025 positively
and are taking a number of actions across our operations to position the
business for sustainable future growth through our transformation plans.
We are mindful of the challenges we need to overcome in an uncertain economic
environment. From a global perspective we will continue to closely follow the
evolving situation with regards to new or increased import tariffs between the
US market and other parts of the world. From a UK perspective, it remains
disappointing that UK energy costs continue to be significantly higher than
the rest of the world, impacting the general competitiveness of UK
manufacturing on the world stage. Both these challenges are outside of our
control, but we continue to monitor them closely and take mitigating action in
response where appropriate.
Despite these uncertainties we have plenty of reasons to be cautiously
optimistic. We own great premium brands which provide us with significant
global potential and have clear plans in place to help us reclaim lost ground,
return to growth and deliver performance. I look forward to updating
shareholders on our progress in due course.
On behalf of the Board, I would like to thank our people around the world who
work tirelessly every day for our brands, our customers who delight in owning
our branded product and finally, our shareholders for their ongoing support.
Peter
Tracey
Non-Executive
Chairman
STRATEGIC REPORT
Strategy & Objectives
Our Strategy: to establish the highest standards of manufacturing and
creative design, to maintain our reputation as makers of high quality
products, and to develop our premium brands responsibly, so we continue to
delight our customers around the world.
Our Objective: to think and act as responsible brand owners at all times,
nurturing our premium brands for long term growth, constantly striving to
realise their full potential across different products, channels and
markets.
If we are successful in our endeavours, we will enhance our reputation as a
great owner of homeware brands, and retain committed and caring people who are
motivated to build a global business capable of sustainable growth, with
increasing profitability, lower risk, and higher returns to our
shareholders.
Brands
We have success when our customers connect with one of our premium brands,
when they have a great experience with our branded products, and when they
share their positive experience with family and friends.
As we continue our customer journey, we are fortunate to own several
incredible premium homeware brands which are known globally for their quality,
that excite with their creative designs and which have authentic rich origin
stories and histories.
Our Spode brand was founded in Stoke-on-Trent, Staffordshire, England by
Josiah Spode I in 1770, Portmeirion was founded in 1965 by Susan
Williams-Ellis, daughter of Sir Clough Williams-Ellis who created the Italian
style Portmeirion Village in North Wales, and Royal Worcester was founded in
1751. Our Pimpernel tablemat brand was founded in 1933, Nambé, our premium
design US homewares business was founded in Sante Fe, New Mexico, USA in 1951
and our home fragrance brand, Wax Lyrical, in Cumbria, UK was founded in
1980.
Tableware is a functional product. Our products are certainly functional,
manufactured to the highest standards to be strong, resilient and durable.
But they are also designed to be tactile, beautiful, bold and loved. Our
customers delight in using our products every day, or to mark a special
occasion, season or celebrations with them, or love adding to a cherished
collection that they intend to pass down through the generations.
We are thankful that over 250 years ago Josiah Spode I had the integrity of
character and business nous to design 'planned permanence' into the
beautiful blue & white tableware he made in Stoke-on-Trent and sold to his
customers in London and around the world. We keep with Josiah's approach,
and it continues to serve us and our customers extremely well.
We are proactively working to centre production in Stoke-on-Trent, England
where possible, over the next 12-24 months, which will increase the proportion
of products we manufacture in the city. This will have an impact on our
gross margins initially, but it is a necessary investment of margin in our
brands. 'Made in Stoke-on-Trent' is the foundation of our brand DNA and it is
what our customers expect from our brand. This margin investment will take
time to repay, but over the medium term, as volume increases, the factory
economics improve materially, and we are confident that we will recover that
margin investment and reap multiple benefits.
Strategy
We see a significant opportunity to grow top line sales around the world,
thereby increasing the utilisation and efficiency of our factories and
warehouses, leading to improved operating margins, profitability and cash
generation.
We will capture our portfolios of premium brands full potential by:
(1) Brand mindset
The way we think and act across all areas of our business must be in the long
term best interests of our brands, and supporting their growth. This brand
mindset should inform every decision and action, keep us striving for
excellence and focused on delighting our customers. It should influence
how we work, who we partner with, when we do something and what we explore
next.
(2) International sales growth
We sell to over 60 markets, but our 3 'established markets' of North America,
UK and South Korea dominate, accounting for 92% of our sales. The 8% balance
is derived from 57 remaining 'international markets', of which only 3 generate
more than £0.5m of sales each.
These international markets offer a clear opportunity to introduce our premium
brand presence for the first time and build new relationships with end
customers and appropriate retail partners in those markets. It is
frustrating that over the many decades we have failed to grow more than a
handful of these markets to any level of significance. However, with
consistent investment in sales and marketing in future years, we are confident
that we can establish our brands in these markets and develop them.
(3) Increase online channel penetration and own eCommerce
We have successfully grown our online direct-to-consumer sales over the last 4
years and our own websites account for c. 9% of the Group's sales. We will
continue to invest in customer acquisition, conversion and improving digital
assets for all online platforms where our products are featured.
We have identified areas where we can improve and that requires investment to
better align with our premium brands, to deliver a much enhanced customer
experience and financial contribution.
(4) Our design archive
We have an extensive designs archive which we are not actively
commercialising. We are exploring how to grow this area of our business in a
responsible way, particularly in licensing and through exclusive products and
working with appropriate partners in every category.
(5) Seasonal products
Seasonal products enable our brands to build enduring relationships with our
customers at times of the year that matter to them. Our Christmas tableware
collection Spode Christmas Tree was first produced in 1938 for the American
market, and 87 years later it is still growing its sales footprint, with
growth still to come from existing and new customers in our established and
international markets.
We have expertise in the seasonal product category, and while we have achieved
a great deal in recent years, we will do more to develop product for other
seasonal occasions.
(6) Return to sustainable levels of trade in South Korea
South Korea has been an important market for us over the last 15 years and the
Portmeirion Botanic Garden collection is one of the best known in that
market. We are confident that sales will recover over time through
elimination of overstocks (meaning customers will order more, so increasing
our revenue); recovery of Asian consumer economies; and selling our wider
collections from our existing portfolio and new products.
We are taking a disciplined approach with controls to improve order flow and
channel oversight.
(7) Engage and grow our brand fans, creating tomorrow's customer!
We work to delight our customers. When we achieve that, they share their
experience with family and friends and we expand our customer base. We will
continue to develop deeper brand engagement through our social channels and
online / offline advertising.
(8) Reduce net debt and invest savings in our marketing key brands
The long term success of our business will be determined by how we nurture and
grow our premium brands over time. Growth requires investment, specifically
in sales and marketing, and a long term commitment to consistently support our
premium brands with marketing spend in established and international
markets. Over the next 2-3 years, as our net debt reduces, the associated
interest cost savings at a minimum will be judiciously allocated to support
international brand marketing.
Business Model
Creative design
Any of our products will fulfil their raw purpose and function brilliantly
well, because they have been manufactured to the highest standards, to be
strong, resilient and durable. But it is our creative design team which
makes the difference, they elevate functional to fabulous, and that's what
delights our customers and keeps our product on the table or on display for
decades. A design, a theme or a style can often be instantly recognised or
connected to one of our brands. Spode is designed to be beautifully bold and
Portmeirion is designed simply to be loved.
Because design is central to our brand proposition, we never out-sourced the
creative design process, choosing to keep it in-house, with a team based in
the UK and US. They take inspiration from our own archive and are informed
by fashion and consumer trends, working to an 18-24 month forward product
roadmap. At the time this report is published in Q1 2025, our team are
finalising new designs to be in-store for Christmas 2026 and excited for what
2027 might hold.
Our heritage collections are extended every year and this keeps them front of
mind with customers and collectors. Examples in 2024 include our annual
Spode Christmas Tree plate, new decorations and Spode Staccato - which can be
mixed and matched with our classic Spode Blue Italian collection which was
first introduced over 200 years ago.
New products are designed and introduced to a collection every year, often
targeting new and different demographics in the market. In 2024, we
launched our beautiful Portmeirion Minerals tableware collection - a reactive
stoneware collection presented in recyclable packing that appeals to a younger
and sustainability conscious customer. New shapes are developed each year to
extend successful collections. Often this will enable access to new markets
which may require different dining experience or cultural need. Similarly, our
new Wax Lyrical England home fragrance collection, which launched in 2023,
gained wider distribution in 2024. It offers an incredible quality, UK made
product, for exceptional value and is gaining very good traction in the
grocery channel.
Operations: administration, manufacture, supply and logistics
Our business was founded over 65 years ago in Stoke-on-Trent, Staffordshire,
England, and the city has remained the location of our headquarters, our
tableware factory and warehouse ever since. Stoke-on-Trent has been the
global centre of ceramic design and manufacture since the 1700s, it is our
home and was the birth place of our Spode and Portmeirion brands. We benefit
from the wonderful skills and talent that have been passed down from
generation to generation. Our US offices are located in New Jersey,
Connecticut and New Mexico, and we have further offices in China, Canada and
Germany.
Our Wax Lyrical home fragrance business is based 120 miles north of
Stoke-on-Trent in the Lake District National Park at Ulverston, Cumbria, which
is the location of both its office and factory.
We manufacture c40% of all the product we sell globally at our two factories
in England and what we do not manufacture ourselves we outsource to long
standing partner factories that we have worked with for many years, all to our
same exacting quality standards and in compliance with our ethical codes of
conduct. Our ambition is to increase the percentage of product we make in our
Stoke-on-Trent factory over the next 12-24 months.
Our UK warehouses service the UK and international customers and our US
warehouses in Connecticut and New Mexico service the US, Canada and Latin
America.
Routes to market
Our revenue is generated from three routes to market:
Wholesale (national and independent retailers):
Our wholesale channel accounts for 83% of total sales and our customers are
national and independent retailers, or distributors in some markets, who in
turn sell to national and independent retailers.
We support our wholesale customers through the use of wholesale marketing,
online marketing and digital assets to promote the sale of our premium branded
products. Many of our wholesale customers are omni-channel retailers with both
physical stores and online sites.
Own eCommerce:
We operate our own eCommerce websites in the US and UK which accounts for 9%
of total sales, offers a higher margin and the opportunity to build closer
relationships with customers and engender long term brand loyalty.
Own Retail:
We have 5 factory outlet stores which trade as Portmeirion Home in the UK and
7 Nambé stores in New Mexico, USA which accounts for c8% of total sales.
In international markets, outside of North America and the UK we have used
distributors which allows access to markets but permits us to limit our stock
holding locations around the world.
Marketing
Over the next 3 years we will increase capital allocated to brand marketing,
so that we can get behind our premium brands and support their growth in our 3
existing established markets (UK, North America & South Korea) and most
critically, to explore and develop new international markets where our premium
brands have no presence and the medium-long term opportunity is most abundant.
Certain of our brands will see c.5-8x increase in spend from current
levels as funds are available.
In 2024, we increased social media engagement across our tableware brands with
in-house and influencer videos reaching more eyes than ever before. Online
engagement with fans of our brands and potential new customers represents a
great opportunity for us to further leverage our design portfolio and
collections.
Our investment in marketing covers a wide range of assets, including the
production of digital assets (images and video content) for online platforms;
communicating to our consumer base across social media channels, exhibiting
our products at trade shows and in our showrooms around the world. Our 2024
investment in a larger showroom in Atlanta, Georgia for the US market, has
allowed us to present more of our products and has been well received by our
customers.
Structure
Our business is controlled centrally from our headquarters in Stoke-on-Trent,
UK, with divisional responsibility in the US and in our home fragrance
operation in Cumbria, UK.
Our Board of Directors and their responsibilities are set out on our website
at www.portmeiriongroup.com. In addition, we have a senior leadership team
comprising leaders of all key functions. This structure of the Board and
senior leadership provides the governance framework for the Group in the
implementation of our strategy and delivery of our business model.
Our Group functions are US and UK based and globally focused. We have senior
leaders in our key regions to ensure we are connected to our customers and can
act quickly. We feel this approach allows a balance of efficiency but
remains responsive to our customer needs and allows us to maximise
opportunities at a market level.
Stakeholders
Our business model aims to address the needs of our stakeholders:
For shareholders - to treat every shareholder as an owner, to provide them
with insights which enable them to understand our long term business model and
appreciate the brands we own, to determine what is important to our future
success and prosperity, and to enable them to make informed investment
decisions. With owners who are aligned to our Brand Mindset and support our
endeavours we can create long term value, build a sustainable profitable and
growing business, with lower risk and increasing capacity for shareholder
returns;
For customers - we strive to produce products which delight our customers and
they can enjoy, that can be used every day or for occasions, a product which
lasts many lifetimes;
For our people and local communities - our focus on social impact and a clear
governance structure are at the heart of our business and core to our brand
DNA. More information is available at
https://www.portmeiriongroup.com/sustainability;
For suppliers - having a positive interaction with suppliers allows us to
deliver higher standards and reduce risk in our supply chain whilst seeking
cost efficiencies and positive environmental outcomes.
For the environment - we strive for operational excellence whilst reducing
environmental impact. More information is available in "Our commitment to
ESG" and The Companies (Strategic Report) (Climate-related Financial
Disclosure) Regulations 2022 Report on pages 24 to 28 in our Annual Report for
2024 soon to be published.
Our People
The beating heart of our Company is our talented people, and our 659
colleagues embody our creativity, professionalism, ambition, focus, passion,
resilience, and determination. Working together they design, develop,
manufacture, sell and work with our customers and suppliers every day. They
have a huge combined level of experience and skill; they have a passion for
our brands and the products they produce. Such commitment and passion is
hard to replicate.
As a result of the challenges that the business has faced over the last two
years and their subsequent and significant impact on factory volumes, we have
had to take the very difficult decision to reduce our colleague numbers over
the last two years from 868 to 659. We fully recognise the impact that these
decisions will have had on all those affected and I would like to sincerely
thank our teams for their commitment and understanding during this very
difficult time.
Culture
Despite the challenges of recent years, we consider ourselves fortunate to
have such committed and loyal people across the world and we thank them for
their continued commitment and hard work.
We value our people and want to make our Company as good a place to work as we
can, a place which is able to attract and retain apprentices every year and
where careers can be built. It is important we keep skills and knowledge
within our business to be passed on.
People are a foundation element of our brand DNA. Our people, not
consultants, defined our values, culture and purpose "inspired by our heritage
to craft a better future" which provides a framework for our decision-making,
our day-to-day behaviours and actions and our guiding principles and our moral
compass.
We promote an open culture through engagement, development and resource
management and we consider ourselves a caring employer with an excellent
health and safety record, fair and balanced equality policies, diversity in
our workforce and management structures and a consultative approach with our
people.
Environmental, Social and Governance
We report on greenhouse gases, social, community, human rights and gender
diversity in the "Our Commitment to ESG" section on page 19 to 23 of the
Annual Report 2024 soon to be published.
Mike Raybould
Chief Executive
Financial & Operational Review of the period
Summary
· Revenue down 11% to £91.2m (2023: £102.7m) against the backdrop of
a much tougher consumer market and reflecting the significant downturn in the
Group's South Korea market. Sales (excluding our South Korean market) and at
constant currency were down 1%.
· Headline profit before tax down 63% to £1.1m (2023: £3.0m) chiefly
due to the decline in sales in our South Korean market and the ensuing impact
on our factory utilisation. Profit in line with December's trading update and
forecast.
· Net profitability up 18% to £4.2m (2023: £3.6m) in the US, our
largest sales market despite supply chain delays limiting Q4 sales.
· Spode delivered its fourth consecutive year of growth with sales up
5% at constant currency, now up c.45% since 2019.
· Wax Lyrical our home fragrance business saw a return to profitability
with sales up 25%.
· Close management of costs with a reduction in overhead costs by 13%
(£5.3m) to provide a leaner base for future operating margin improvement.
· Ongoing automation investments in our factories continue to drive
further operational improvements and efficiencies.
· Cash flow generated from operations +£2.1m (2023: +£10.8m).
· Net debt increased £4.2m due to higher stock levels and later
invoicing of Christmas collections in the US.
· Energy usage down 9% on 2023 and 17% lower than 2022.
Revenue
After three years of sales in excess of £100.0m, 2024 saw a disappointing
year-on-year fall of 11%, against a tougher consumer market backdrop,
particularly in the Group's South Korean market and aggressive de-stocking by
our customers.
Sales of our Spode brand increased 5% at constant currency despite tougher
consumer markets and lost US Christmas orders due to supply chain disruption.
Spode sales are up 45% vs pre-Covid levels in 2019.
North America (US & Canada) (43% of sales)
North American sales down 7% to £39.7m in constant currency (2023:
£42.4m), partly driven by weaker consumer spending levels and retailers'
policy to reduce stock levels across the board in response to higher interest
rates. In addition, supply chain disruption, including East Coast port strikes
in the run up to the election, delayed arrival of key Christmas stock
resulting in cancelled and lost replenishment orders. However, despite
supply chain costs, the gross margins in the US remained flat and overall net
profitability increased 18%.
We are already advanced in bringing forward production of our key Christmas
lines for 2025, creating additional contingency for unforeseen supply chain
disruption.
Our retail customers have reported strong sell through of our Christmas
product in Q4 2024, particularly online, and in many cases up on the prior
year. This highlights that end demand for our well-known brands and products
remains strong.
South Korea (13% of sales)
South Korea sales down 45% to £11.7m in constant currency (2023: £21.5m).
2024 was a regrettable 'perfect storm' for the Group in South Korea which cost
us dearly and we intend never to repeat. Following the lifting of Covid
restrictions in 2021 in South Korea our customers delivered high order flow
which we fulfilled and reported on in 2021/22. This created a level of
overstocking in the market which was in the process of being sold through,
just as new stock was arriving. At the same time our end customers were being
hit by high inflation and weaker currency, driving much higher living costs
and lower discretionary incomes.
The level of overstock reduced in 2024, and whilst there is more to do in
2025, actions have been taken so this does not repeat. We have introduced
stricter oversight and controls and will take a disciplined approach to
stocking this market. We have also taken action to simplify our routes to
market that will lead to improved margins. We have accelerated new product
launches which have been well received and are engaging our end brand fans and
retail partners.
Sales continued to grow strongly with our online platform partner and our lead
brand, Portmeirion, continues to rank in the top two in the category for
online search. In 2024, we introduced a limited amount of our Spode
Christmas Tree collection into South Korea which was positively received by
customers and sold through very well. We expect this to lead to repeat
orders at larger values.
UK (36% of sales)
UK sales were up 5% to £32.4m, (2023: £30.8m). This was driven by the strong
performance of our home fragrance division, Wax Lyrical, with Ceramic sales in
the UK down 9% due to a much tougher consumer spending backdrop. Sell
through in our key Q4 and Christmas trading period was strong and up on last
year for most major accounts.
Our Wax Lyrical business, where sales were up 25%, continued to benefit from
winning new listings across national retailer chains and is now back to profit
and we foresee further strong top and bottom line progress in 2025 with our UK
made products continuing to perform well.
International (8% of sales)
Ceramic sales in our international markets fell 6% to £7.3m. In particular,
we were more cautious in managing receivables, particularly for Asian
distributors. International market sales remain up 40% vs pre-Covid levels in
2019 and we see significant upside opportunity over the next 5 years to grow
in these markets. Our Spode brand and Portmeirion Botanic Garden collection
will lead the way forward.
Profit
Headline profit before Tax 2 (#_ftn2) down 63% to £1.1m (2023: £3.0m).
Profit in the year was impacted by the 45% reduction in sales from our South
Korean market, which severely affected factory utilisation, and loss of US
Christmas orders due to supply chain disruption.
During 2024, we proactively reduced operating costs by £5.3m, c13% of our
overheads, through headcount reductions and efficiency savings. This
followed a restructuring exercise earlier in the year.
Headline EBITDA 3 (#_ftn3) of £7.3m (2023: £9.2m).
Cost inflation
Our cost base will rise by £0.8m (annualised) as a direct result of the
Autumn Budget, most notably from rises in National Insurance Contributions and
the National Minimum Wage. Utility costs will also increase and remain
volatile.
Interest and financing costs
Finance costs for the Group increased £0.2m to £2.0m (2023: £1.8m) as
higher interest rates have impacted discount factors on lease liabilities.
Interest paid on borrowings has remained broadly consistent with last year at
£1.6m.
Taxation
There was a tax credit for the year of £0.3m (2023: tax credit of £0.1m).
This was mainly due to a deferred taxation credit of £0.6m. The current
corporation tax charge was £0.3m.
Dividends
At the half year, an interim dividend of 1.50 pence per ordinary share was
paid to shareholders at a total cost of £207,000. The Board does not
recommend payment of a final dividend.
The Board has prioritised growth which requires investment in the business,
and to enable this we must strengthen our balance sheet. The resultant
reduction in net debt will reduce the associated interest costs on our Profit
& Loss account, which in 2024 was £1.6m. Savings and growth will
provide the funds that enables us to make judicious investments in the
business and support our premium brands, which is in the long-term best
interests of our shareholders.
The Board is cognisant of the significant percentage of our shares held by
individuals, and recognises that dividends are an important contributor to
total shareholder return and shareholder income. We own several incredible
brands which provide us with a significant opportunity to grow sales, profits
and margins over time. But to achieve this requires investment, commitment,
consistency, excellent execution and time. Our objective is to drive towards
a 'Fortress Balance Sheet' with a net cash position and pay dividends from a
position of strength and from the earnings of a well invested business.
Cash generation and net debt
At 31 December 2024, the Group had net debt of £12.1m (comprising cash and
cash equivalents of £10.9m less borrowings of £23.0m). This compares to net
debt of £7.9m at the prior year end. This increase is due to the reduced
profitability and the later timing of Christmas invoicing leading to receipts
delayed to January.
Operating cash flow reduced to £2.1m (2023: £10.8m), due to the significant
reduction in South Korean sales impacting receipts and manufacturing costs.
This was partially offset by the significant reduction in overhead costs but
could not be fully mitigated.
Mindful of the impact of the South Korean sale reduction, capital expenditure
was contained to critical activities and totalled £1.6m (2023: £2.9m). This
included investment in plant and IT.
Bank facilities
In August 2024, the Group signed a new 4+1 year term £30m revolving credit
facility with Barclays, which replaced the existing facilities with Lloyds.
This new facility allowed the Group to consolidate and simplify our borrowing
structure, whilst providing a secure structure and sufficient working capital
headroom for the future and an 80bps improvement in the interest rate charged.
Our business is seasonal due to the second half weighting of our sales.
Consistent with previous years, we experienced a working capital swing of
around £10.0m during the year as we built inventory to match our sales
demand. At the year-end we had available cash and borrowing headroom of
£9.8m.
We believe our committed funding lines adequately address this seasonal
dynamic and are prudent. Our new facility requires delivery against leverage
and interest cover covenants, which passed the benchmark requirements with
headroom throughout the year.
Assets and liabilities
We had a net working capital outflow of £4.2m driven by increased inventory
and receivables over the prior year.
After the success of our inventory reduction activity in 2023, 2024 saw an
increase of £2.3m to £38.2m. This was due to the combination of the
significant drop in South Korea sales, cancelled US orders ahead of the busy
Christmas period resulting from late supply into the market due to floods at
one of our outsourced factories followed by the port strikes along the East
Coast of the US in October 2024, and the inflationary impact on production
costs.
At 31 December 2024, we held 210,282 treasury shares with a book value of
£0.4m (average price 187 pence) in order to satisfy employee share option
schemes and 234,523 shares with a book value of £2.7m (average price 1158
pence) are held in The Portmeirion Employees' Share Trust. The balance of
these shares did not move during the year.
The balance of other intangible assets increased during the year as we
continue to develop our global website capabilities and completed a second
phase of investment in our new US ERP system.
Pension scheme
We made no further contributions to our closed defined benefit pension scheme
in the year due to the accounting surplus which was £1.9m at year-end, an
increase from the £1.1m of surplus reported in 2023. The main reason for the
improved position is an increase in the discount rate assumption (based on
corporate bond yields) resulting in a decrease in the liability value. This
has been partially offset by a lower than expected return on assets over the
year and an increase in the inflation rate assumption.
Treasury and risk management
The impact of transactional currency flows on the Group's profit is not
material due to the natural matching of revenue and costs across our global
businesses.
When any anticipated exposure arises, our policy is to use appropriate hedging
instruments to mitigate that risk. We have a robust approach to managing risk
to deliver our strategy.
Changes to Key Performance Indicators (KPIs)
We have undertaken a comprehensive review of our Key Performance Indicators
(KPIs) to ensure they accurately reflect our strategic priorities, which as
described in our Strategic Review encompass our "Return to growth" most
appropriately measured by the KPI's of Revenue, Headline profit before tax and
statutory profit before tax. These measures track directly to our financial
reporting and provide a greater transparency of our performance metrics, also
aligning with our internal reporting and targets.
Our strategic focus on our "Fortress Balance Sheet" is targeted on cash
generation and debt reduction and is represented by the KPI's of Free Cash
Flow, Net Debt Reduction. We believe these metrics provide enhanced visibility
over our strategic goals and replace Operating Cash Generation as a KPI. We
continue to focus on shareholder return and a return to growth coupled with
our strong balance sheet will ensure we meet this objective. Whilst Dividend
Cover remains important we have replaced it as a KPI in favour of reporting
and measuring our performance against Dividends paid and proposed, we will
continue to report on Earnings per Share.
We will no longer report the KPI's of Headline Operating Margin or Own
Ecommerce Sales, these performance indicators remain important to the Group
but are not considered to be Key Performance Indicators that drive our actions
and underpin our new strategy to refocus on our core brand strengths.
Note that our sustainability KPI's remain the same as in prior year.
Principal Risks & Uncertainties
The Group is exposed to a number of risks in the markets it operates across.
The Board considers the risks to the business and the adequacy of internal
controls with regard to the risks identified at every Board meeting. It
formally reviews and documents the principle risks to the business at least
annually.
Risk Mitigation Outlook
Economic environment
Our sales markets around the world have been impacted by inflationary The Group sells into more than 60 countries around the world, although the The Group will continue to monitor sales trends in our major markets around
pressures and tariffs, with rising energy costs and interest rates reducing majority of sales are concentrated into three key markets. We continue to the world and ensure we respond accordingly to any threats or opportunities.
discretionary consumer spending. monitor the impact of global events in these markets and any material impact
on our business. Our international sales team has been tasked with exploring
further progress beyond the three key markets as set out in the "Explore and
Develop" section of the 2025-2026 Priorities section.
This has created a difficult trading environment in our major sales markets.
The Group maintains close relationships with our key customers and suppliers
to identify any signs of financial difficulties in order to prevent or limit
any potential losses. Customer orders and sales trends in major markets are
constantly reviewed to enable early action to be taken in the event of
declining sales.
The Group continues to invest in our online and digital capabilities and
capacity in order to provide an increasingly direct to consumer element for
product fulfilment.
Competitors
The Group faces strong competition in most of the major markets in which we The risk is managed by ensuring that high quality and innovative products are The Group continues to invest in both its strong brands and new product
operate. This presents a risk of losing market share, revenue and profit. brought to market, maintaining strong relationships with key customers and development to provide a point of difference, whilst working closely with key
ensuring the Group is aware of local market conditions, trends and customers to provide a reliable and timely service.
industry-specific issues and initiatives. This enables the Group to identify
and address any specific matters within the overall business strategy.
We are increasingly working with partners in our key UK and US markets on
direct to consumer fulfilment, and ensuring we have the capabilities to meet
required service levels.
People
Skilled senior managers and personnel are essential in order to achieve the Management seeks to ensure that colleagues are appropriately remunerated and The Group remains committed to hiring and retaining key personnel in order for
strategic objectives of the Group. Failure to recruit and retain key staff good performance is recognised and rewarded. Staff are also provided with the business to achieve our strategic objectives.
would present significant operational difficulties for the Group. relevant training for their roles and career progression to improve
motivation.
The Group has a clearly defined recruitment policy which ensures that new
colleagues meet the required standard and experience for each position.
Suppliers
The Group's purchasing activities could expose it to over-reliance in certain The Group both manufactures and sources product from a range of suppliers The Group continues to closely monitor global supply chains to ensure our flow
key suppliers or markets. which reduces the impact of inflation or disruption in one market or supplier. of products around the world is not disrupted.
The lingering impact of Covid-19 to supply chains has created significant For the manufacturing processes in the UK, the Group ensures that key raw
inflationary cost increases and disruption through additional lead times. materials are available from more than one source to ensure continuity and
competitive pricing.
Suppliers may not reflect the Group's high ethical standards.
For the sourcing process, suppliers are carefully selected to ensure a
sufficient breadth in supply base.
The Group also ensures that all intellectual property rights are retained and
easily transferable should an alternative supplier be required.
All major suppliers are subject to ethics due diligence.
Financial risk
Financial risk is wide-ranging and covers capital management, credit risk, The Group's approach to risk management and mitigating systems are covered in The Group has sufficient headroom within ongoing borrowing facilities. The
currency risk and liquidity risk. the financial risk management objectives in note 32 of the Report and Accounts Group also has a strong natural currency hedge and continues to monitor
for the year ended 31 December 2024 on pages 95 to 98 in the Annual Report, currency fluctuations.
soon to be published.
The risks presented in these areas include the failure to achieve business
goals, potential financial loss caused by default, reduction in profit due to
currency fluctuations, insufficient funds to continue trading and going The Group remains profitable and has sufficient headroom within current
concern threat. borrowings facilities.
Cyber threats are a key financial risk the Group faces across our global The Board has a detailed and robust budget review process and assesses
business. performance, including cash flow and liquidity, as part of regular management
information reviews.
Regular currency forecasts are reviewed in order to ensure the Group is not
detrimentally impacted by any major exchange rate fluctuations.
We remain vigilant to cyber risks and have a robust framework in place,
including external audit, to ensure our systems are well protected.
Jonathan Hill
Group Finance Director
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2024
Notes 2024 2023
£'000 £'000
91,212 102,743
Revenue 3
Operating costs before exceptionals (88,167) (97,920)
3,045 4,823
Headline operating profit(1)
Exceptional items 4
- restructuring costs (1,021) (694)
- impairment charge - (10,867)
- acquisition costs - -
2,024 (6,738)
Operating profit/(loss)
51 23
Interest income
Finance costs 5 (2,030) (1,813)
Other income - -
Headline profit before tax(1) 1,066 3,033
Exceptional items 4
- restructuring costs (1,021) (694)
- impairment charge - (10,867)
- acquisition costs - -
Profit/(loss) before tax 45 (8,528)
Tax 299 72
Profit/(loss) for the year attributable to equity holders 344 (8,456)
Earnings per share 2
Basic 2.50p (61.46)p
Diluted 2.49p (61.41)p
Headline earnings per share 2
Basic 8.04p 21.36p
Diluted 8.03p 21.34p
Dividends proposed and paid per share 6 1.50p 5.50p
All the above figures relate to continuing operations.
(1) Headline operating profit is statutory operating profit of £2,024,000
(2023: £6,738,000 loss) add exceptional items of £1,021,000 (2023:
£11,561,000). Headline profit before tax is statutory profit before tax of
£45,000 (2023: £8,528,000 loss) add exceptional items of £1,021,000 (2023:
£11,561,000).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
2024 2023
£'000 £'000
Profit/(loss) for the year 344 (8,456)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of net defined benefit pension scheme liability 701 504
Deferred tax relating to items that will not be reclassified subsequently to (175) (126)
profit or loss
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 136 (1,400)
Other comprehensive income/(loss) for the year 662 (1,022)
Total comprehensive income/(loss) for the year attributable to equity holders 1,006 (9,478)
CONSOLIDATED BALANCE SHEET
31 December 2024
2024 2023
£'000 £'000
Non-current assets
Goodwill 1,749 1,749
Intangible assets 7,916 7,511
Property, plant and equipment 14,311 15,020
Right-of-use assets 6,336 7,325
Pension scheme surplus 1,896 1,144
Total non-current assets 32,208 32,749
Current assets
Inventories 38,234 35,956
Trade and other receivables 21,048 19,053
Cash and cash equivalents 10,897 888
Total current assets 70,179 55,897
102,387 88,646
Total assets
Current liabilities
Trade and other payables (13,909) (13,860)
Current income tax liability (402) (161)
Lease liabilities (2,085) (1,972)
Borrowings (23,000) (7,825)
Total current liabilities (39,396) (23,818)
Non-current liabilities
Deferred tax liability (2,591) (3,015)
Lease liabilities (4,838) (5,840)
Borrowings - (983)
Total non-current liabilities (7,429) (9,838)
(46,825) (33,656)
Total liabilities
Net assets 55,562 54,990
Equity
Called up share capital 710 710
Share premium account 18,344 18,344
Investment in own shares (3,108) (3,108)
Share-based payment reserve 114 66
Translation reserve 2,388 2,252
Retained earnings 37,114 36,726
Total equity 55,562 54,990
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Share-based payment
Share Investment in own shares reserve
Share premium £'000 £'000 Translation Retained
capital account reserve earnings Total
£'000 £'000 £'000 £'000 £'000
At 1 January 2023 710 18,344 (3,108) 148 3,652 46,937 66,683
Loss for the year - - - - - (8,456) (8,456)
Other comprehensive loss for the year (1,400) 378 (1,022)
- - - -
Total comprehensive loss for the year
- - - - (1,400) (8,078) (9,478)
Dividends paid - - - - - (2,133) (2,133)
Decrease in share-based payment reserve
- - - (82) - - (82)
At 1 January 2024 710 18,344 (3,108) 66 2,252 36,726 54,990
Profit for the year - - - - - 344 344
Other comprehensive income for the year 136 526 662
- - - -
Total comprehensive income for the year
- - - - 136 870 1,006
Dividends paid - - - - - (482) (482)
Increase in share-based payment reserve
- - - 48 - - 48
At 31 December 2024 710 18,344 (3,108) 114 2,388 37,114 55,562
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2024
2024 2023
£'000 £'000
Operating profit/(loss) 2,024 (6,738)
Adjustments for:
Depreciation of property, plant and equipment 1,288 1,459
Depreciation of right-of-use assets 2,225 2,058
Amortisation of intangible assets 730 884
Charge/(credit) for share-based payments 48 (82)
Exchange loss (1) (1,053)
Impairment charge - 10,867
Operating cash flows before movements in working capital 6,314 7,395
(Increase)/decrease in inventories (2,278) 5,161
(Increase)/decrease in receivables (1,993) 834
Increase/(decrease) in payables 48 (2,609)
Cash generated from operations 2,091 10,781
Contributions to defined benefit pension scheme - (300)
Interest paid on borrowings (1,618) (1,569)
Interest paid on lease liabilities (412) (215)
Income taxes (paid)/received (55) 684
Net cash inflow from operating activities 6 9,381
Investing activities
Purchase of property, plant and equipment (569) (1,340)
Purchase of intangible assets (1,070) (1,585)
Net cash outflow from investing activities (1,639) (2,925)
Financing activities
Equity dividends paid (482) (2,133)
Capital element of lease payments (2,058) (2,068)
Drawdown/(repayment) of short term borrowings 17,192 (964)
Repayments of borrowings (3,000) (2,000)
Net cash inflow/(outflow) from financing activities 11,652 (7,165)
Net decrease in cash and cash equivalents 10,019 (709)
Cash and cash equivalents at beginning of year 888 1,681
Effect of foreign exchange rate changes (10) (84)
Cash and cash equivalents at end of year 10,897 888
NOTES TO THE PRELIMINARY RESULTS
1. This announcement was approved by the Board of
Directors on 31 March 2025.
1.1 The financial information set out above does not
constitute the Company's statutory accounts for the years ended 31 December
2024 or 2023, but is derived from those accounts. Statutory accounts for
2023 have been delivered to the Registrar of Companies and those for 2024 will
be delivered following the Company's Annual General Meeting. The auditors
have reported on those accounts: their reports were (i) unqualified, (ii) did
not contain a statement under Sections 498(2) or (3) of the Companies Act
2006.
1.2 For the year ended 31 December 2024 the Group has
prepared its annual report and accounts in accordance with accounting
standards in conformity with the requirements of the Companies Act 2006
(International Financial Reporting Standards).
This financial information has been prepared in accordance with the accounting
policies stated in the Group's financial statements for the year ended 31
December 2024.
The financial statements have been prepared on the historical cost basis, with
the exception of derivative financial instruments which are stated at their
fair value.
1.3 After making enquiries and reviewing budgets and
forecasts for the Group, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the annual report and accounts. Further
information on going concern is set out in the Financial Review section above.
NOTES TO THE PRELIMINARY RESULTS
Continued
2. Earnings per share
The calculation of basic and diluted earnings per share is based on the
following data:
Earnings 2024 Earnings Earnings 2023 Earnings
£'000 Weighted per share £'000 Weighted per share
average (p) average (p)
number of number of
shares shares
Basic earnings/(loss) per share 344 13,759,282 2.50 (8,456) 13,759,282 (61.46)
Effect of dilutive securities:
employee share options - 28,681 - - 10,566 -
Diluted earnings/(loss) per share 344 13,787,963 2.49 (8,456) 13,769,848 (61.41)
Earnings 2024 Earnings Earnings 2023 Earnings
£'000 Weighted per share £'000 Weighted per share
average (p) average (p)
number of number of
shares shares
Headline basic earnings per share 1,106 13,759,282 8.04 2,939 13,759,282 21.36
Effect of dilutive securities:
employee share options - 28,681 - - 10,566 -
Headline diluted earnings per share 1,106 13,787,963 8.03 2,939 13,769,848 21.34
The calculation of basic and diluted headline earnings per share is based on
the following data:
2024 2023
£'000 £'000
Profit/(loss) for the year attributable to equity holders 344 (8,456)
Add back/(deduct):
Exceptional items 1,021 11,561
Tax effect of exceptional items (259) (166)
Headline earnings 1,106 2,939
NOTES TO THE PRELIMINARY RESULTS
Continued
3. 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:
Operating segment 2024 2023
£'000 £'000
51,487 60,076
UK
North America 39,725 42,667
91,212 102,743
Geographical market 2024 2023
£'000 £'000
32,394 30,782
United Kingdom
North America 39,532 42,407
South Korea 11,817 21,488
Rest of the World 7,469 8,066
91,212 102,743
4. Exceptional items
Exceptional items by type are as follows:
2024 2023
£'000 £'000
1,021 694
Restructuring costs
Impairment charge - 10,867
1,021 11,561
5. Finance costs
2024 2023
£'000 £'000
Interest paid 1,618 1,568
Interest on lease liabilities 412 245
2,030 1,813
NOTES TO THE PRELIMINARY RESULTS
Continued
6. Dividends
The Directors recommend that no final dividend per ordinary share be paid for
2024 (2023: 2.00p). The total dividend paid and proposed for the year is 1.50p
per share (2023: 5.50p).
7. Reconciliation of headline earnings before interest,
tax, depreciation and amortisation (Headline EBITDA)
2024 2023
£'000 £'000
Headline operating profit 3,045 4,823
Add back:
Depreciation 3,513 3,517
Amortisation 730 884
Headline earnings before interest, tax, depreciation and amortisation 7,288 9,224
Reconciliation of earnings before interest, tax, depreciation and amortisation
(EBITDA)
2024 2023
£'000 £'000
Statutory operating profit/(loss) 2,024 (6,738)
Add back:
Depreciation 3,513 3,517
Amortisation 730 884
Impairment charge - 10,867
Statutory earnings before interest, tax, depreciation and amortisation 6,267 8,530
8. Post balance sheet events
There are no post balance sheet events.
9. Availability of annual report and accounts
The accounts for the year ended 31 December 2024 will be posted to
shareholders on or before 17 April 2025 and laid before the Company at the
Annual General Meeting on 20 May 2025. Copies will be available from the
Company Secretary at Portmeirion Group PLC, London Road, Stoke-on-Trent,
Staffordshire, ST4 7QQ, or from the website www.portmeiriongroup.com.
1 (#_ftnref1) Constant currency reflects the like-for-like performance by
removing the impact of any changes in currency rates across the periods. It
is calculated by adjusting the current year value to reflect the average
currency rate used for the prior period thereby removing the impact of
currency in any comparative.
2 (#_ftnref2) Headline Profit before Tax excludes exceptional items - see
Consolidated Income Statement.
3 (#_ftnref3) Headline EBITDA excludes exceptional items - see note 7.
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