REG - Portmeirion Group - H1 2024 Trading update

PortmeirionAnnouncement

18/07/2024 07:00

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RNS Number : 8395W  Portmeirion Group PLC  18 July 2024

18 July 2024

 

PORTMEIRION GROUP PLC

('the Group')

 

H1 2024 Trading update

 

Improved demand across US/UK, tough macroeconomic backdrop remains in South
Korea

Remain on track to meet Full Year market expectations

 

Portmeirion Group PLC, the owner, designer, manufacturer and omni-channel
retailer of leading homeware brands in global markets, provides an update on
its trading for the six months to 30 June 2024.

 

Sales for our first, traditionally quieter half, are expected to be c.£36.5m,
down 17% on the same period last year (and down 16% at constant currency).
This is in line with what was anticipated in the Group's full year results in
March, which stated that H1 sales would be down due to lower order levels in
South Korea. Group sales, excluding the South Korean market, were up 5% in
constant currency.

 

Encouragingly, sales during the period in the US, our largest market, were up
4% in constant currency combined with an improvement in gross margins however
there continues to be a difficult market backdrop. In the UK, sales were
significantly ahead of the prior year aided by further growth of over 25% in
Wax Lyrical, our home fragrance division, which benefitted from the impact of
recent new listing wins in the grocery channel. In South Korea, sales were
down 60% against a comparison of an abnormally high first half in 2023. Softer
consumer spending in South Korea was compounded by significant de-stocking by
distributors and retailers.

 

Outlook

 

We expect FY24 profit to be up on the prior year with improved operating
margins and we remain on track to meet FY market expectations. We expect sales
in the second half in our South Korean market to be back to broadly in line
with the prior year and we have healthy order books for Christmas across the
US and UK.

 

The actions we have taken to reduce our overhead cost base by 10% leaves us
better placed to navigate any continuing macro pressures as trading conditions
around our key markets across the world continue to be unpredictable. We also
continue to manage the increasing disruption to global container freight
shipping together with rising rates.

 

Mike Raybould, Chief Executive, commented:

 

"We are pleased with the progress we are making in the US, our largest sales
market, with improving sales and higher gross margins and also the continued
strong growth recovery in Wax Lyrical, although consumer markets remain
uncertain around the world. We are also encouraged by our advance US orders
for Christmas which remain significantly ahead of last year.

 

In South Korea, following a significant stock refill in 2022 and first half
2023, the more recent consumer slowdown has resulted in distributors and
retailers needing to reduce high stock levels. This has impacted short term
orders for this market however we are confident that our Portmeirion brand
remains ever popular with the end consumer as evidenced by healthy, growing
online channel sales in the market.

 

The benefits of our cost restructuring are on track, and this supports our
commitment to growing our operating margins in the short and long term and we
believe that our increasingly distributed brands are well placed to grow in
the medium and long term."

 

The Group expects to report its Interim results for the six months ended 30
June 2024 in the second half of September 2024.

 

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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