REG - Portmeirion Group - Trading Update

PortmeirionAnnouncement

20/07/2023 07:00

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RNS Number : 5779G  Portmeirion Group PLC  20 July 2023

20 July 2023

 

Portmeirion Group PLC

(the "Company" or the "Group")

 

Half-Year Trading Update

 

North American retailer destocking despite robust end consumer demand

 

Portmeirion Group PLC, the owner, designer, manufacturer and omni-channel
retailer of leading homeware brands in global markets, updates on trading for
the six months to 30 June 2023.

 

Sales for our first, traditionally quieter half, are expected to be £44
million, down 3% on the same period last year.

 

In our AGM statement in May, we highlighted that we have seen some increased
caution from US customers.  This caution on ordering from North America (US
and Canada) customers has continued and is particularly noticeable amongst the
national department stores as they react to the weaker economic climate and
take a more conservative approach to stock levels. Accordingly, sales in the
US and Canada are down 14% on a year-on-year basis. Despite this and
encouragingly our customer demand in North America remains robust for the
Company's products supported by the sales out data we have (which covers c.60%
of market sales) and the strong forward order book for Christmas which is
ahead of last year. Consequently this underlying end-consumer demand should
support restocking by our retail customers in due course.

 

Across our other markets, we have made pleasing progress and are ahead of last
year, in line with our expectations. Encouragingly, ceramic sales in rest of
world markets, a core element of our growth strategy, are up by 10% and sales
in our home fragrance business, Wax Lyrical, are up 15%. In both of these
areas we expect continued further growth through the second half.

 

There has been a good reaction to new product launches in the first six months
of 2023, despite the tough consumer climate and we are encouraged by strong
order books for our US market with the highly popular Spode Christmas ranges
that are up double digit on last year. Designing and launching new products
remains a key part of our growth strategy.

 

In terms of the full year outlook, it is challenging to assess how long the
North America caution amongst our retailer customers will endure and whilst we
note the encouraging end customer sell through data and our strong Christmas
order book, the Board believes that it is prudent to assume that this caution
will continue through the second half resulting in the Group's sales being
below and profits for FY23 being significantly below current market
consensus.

 

The Group's balance sheet remains strong and we have successfully reduced
inventory levels since the end of FY22 and are expected to reduce further by
the end of FY23.

 

Despite the current short-term uncertainty in North America amongst our retail
customers, we continue to be confident in the Group's prospects more generally
and remain focused on our long-term growth and margin improvement opportunity
and making continued progress against our strategy.

 

 

 Mike Raybould, Chief Executive, comment:

 

"Although consumer markets are clearly tougher than 12 months ago, we continue
to invest in our long-term strategy for sales and operating margin growth.

 

Whilst retailer order flow in North America is currently challenging, our data
clearly indicates that end customer demand remains robust, indeed is up on
last year. Accordingly, it is important that we ensure that we maintain the
investment in our capabilities in North America for when the short-term
uncertainty subsides.

 

Other key markets have performed in line with our expectations, and we remain
confident that we are retaining market share gains made in recent years. We
are pleased with our new product launches and the work we have done to grow
operating margins which will benefit the Company in the medium and longer
term."

 

Interim results for the six months ended 30 June 2023 will be reported in the
second half of September 2023.

 

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 743 443   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
 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 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

 

 

 

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