TIDMPMP
RNS Number : 5078T
Portmeirion Group PLC
21 March 2019
21 March 2019
Portmeirion Group PLC ('Portmeirion' or 'the Group')
Preliminary results for the year ended 31 December 2018
Financial summary
2018 2017 Increase
GBPm GBPm %
Revenue 89.6 84.8 5.7
Pre-tax profit 9.7 8.8 10.1
EBITDA 11.8 11.0 7.5
Basic earnings per share 72.12p 65.07p 10.8
Dividends paid and proposed per share
in respect of the year 37.50p 34.66p 8.2
Highlights:
Financial
-- Tenth consecutive year of record Group revenue which
increased by 5.7% to GBP89.6 million (2017: GBP84.8 million).
-- Profit before tax increased by 10.1% to GBP9.7 million (2017: GBP8.8 million).
-- EBITDA increased by 7.5% to GBP11.8 million (2017: GBP11.0 million).
-- Earnings per share increased by 10.8% to 72.12p (2017: 65.07p).
-- Total dividends paid and proposed for 2018 increased by 8.2%
to 37.50p per share (2017: 34.66p).
-- Net cash improved to GBP2.3 million (2017: GBP1.6 million).
-- Operating margin increased to 11.1% (2017: 10.7%).
Operational
-- Strong progress across key markets of UK, US and South Korea.
-- Home fragrance division (acquired in 2016) delivers sales growth of 11.1%.
-- Online sales growth of 24.4% over the prior year.
-- Successful new product launches including Sara Miller London
Portmeirion and line extensions in Portmeirion Botanic Garden and
Royal Worcester Wrendale Designs.
-- For 2019, three exciting new UK manufactured ranges launched
- Portmeirion Botanic Garden Harmony, Portmeirion Atrium and Spode
Kingsley.
-- Appointed Angela Luger as a Non-executive Director on 1 March 2019.
Dick Steele, Non-executive Chairman commented:
"We are delighted to be reporting a tenth consecutive year of
record revenue and another record profit before taxation. Our
strategy and core values remain unchanged. We are focused on
driving profitable sales growth through new product introduction,
developing our markets, investing behind our brands and enhancing
our operational capabilities and efficiency supported with
complementary strategic acquisitions.
We look forward into 2019 with confidence and at this very early
stage of the year expect trading to be in line with expectations
for the full year."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR).
ENQUIRIES:
Portmeirion Group PLC:
Dick Steele +44 (0) 1782 steele_clan@msn.com
744 721
Non-executive Chairman
Mike Raybould +44 (0) 1782 mraybould@portmeiriongroup.com
744 721
Group Finance Director
Hudson Sandler:
Dan de Belder +44 (0) 207 796 ddebelder@hudsonsandler.com
4133
Nick Moore nmoore@hudsonsandler.com
Oenone Potter opotter@hudsonsandler.com
Panmure Gordon
(Nominated Adviser and +44 (0) 207 886
Broker): 2500
Freddy Crossley / Joanna Corporate Finance
Langley
James Stearns Corporate Broking
Cantor Fitzgerald Europe +44 (0) 207 894
(Joint Broker): 7000
Phil Davies / Rick Thompson Corporate Finance
Caspar Shand Kydd Sales
Portmeirion Group PLC
Chairman and Chief Executive Statements
We are very pleased to be able to report another record breaking
year for the Group. Sales within our key markets of the UK, USA and
South Korea have all increased. We have made significant progress
towards our strategic targets, particularly in growing our
e-commerce and home fragrance sales. The Board is recommending an
increased dividend to shareholders.
The Group continues to invest in our major brands which are the
key drivers of value for the business.
Financial Highlights
Revenue was GBP89.6 million for the year, an increase of 5.7%
over the previous year (2017: GBP84.8 million). At a constant US
dollar exchange rate our revenue increased by 7.2%. At our home
fragrance division, acquired in 2016, sales increased by 11.1% to
GBP15.5 million (2017: GBP13.9 million). Sales from our e-commerce
sites increased by 24.4% to GBP4.3 million (2017: GBP3.4
million).
Since 2013, the Group has increased revenue by 54% from GBP58.3
million to GBP89.6 million.
Profit before taxation was GBP9.7 million, an increase of GBP0.9
million or 10.1% on the previous year. Earnings before interest,
taxation, depreciation and amortisation (EBITDA) increased by 7.5%
to GBP11.8 million in the year (2017: GBP11.0 million). Both of
these figures represent all-time records for Portmeirion.
Basic earnings per share increased by 10.8% to 72.12p per share
(2017: 65.07p), while dividends have increased by 8.2% to 37.50p
(2017: 34.66p), with dividend cover of 1.93 times (2017: 1.85
times) maintained in line with our long term target of
approximately two times.
Dividend
The Board is committed to a progressive dividend policy and aims
to maintain a sustainable and appropriate level of dividend cover.
We have increased our dividend for ten consecutive years. The Group
will look to increase our dividend whenever appropriate driven by
our results, cash balances, future prospects and other key
performance indicators.
The Board is recommending a final dividend of 29.50p (2017:
27.26p) per share bringing the total paid and proposed for the year
to 37.50p (2017: 34.66p) per share, an increase of 8.2% over the
total amounts paid in respect of 2017.
Governance
The Directors recognise and welcome the importance and benefits
of good corporate governance and have chosen to apply the Quoted
Companies Alliance Corporate Governance Code (the 'QCA Code').
Further details on how the Company complies with the principles
of the QCA Code can be found on our website and in our annual
report and accounts.
People and culture
We are committed to the continuing promotion of our established
and unique vision and values which support the Group's culture of
openness and integrity. We encourage attitudes and behaviours that
will positively impact on our long-term success and sustainability
through the achievement of our objectives and business
strategy.
The Group recruits people who share our values, and this
continues to be a key part of our recruitment strategy as it
enables new and existing employees to work seamlessly towards
realising our vision. Further details on our corporate culture and
its integration within the Group can be found in the Corporate
Responsibility section and the Corporate Governance Statement in
our annual report and accounts.
The Board keeps the composition and performance of the Directors
and most senior management of the Group under review to ensure we
have the appropriate skills and experience in place to deliver our
strategic aims.
At the beginning of March 2019, we were pleased to welcome
Angela Luger to the Board as a Non-executive Director. Angela's
background brings a mix of retail, digital and customer focused
experience to the Board.
Our performance during the year
Revenue for the Group increased by 5.7% to GBP89.6 million
(2017: GBP84.8 million). This represents strong progress across all
areas of the business, with improved performance within our core
markets of the UK, USA and South Korea, as well as market segment
growth in UK and USA ceramic and home fragrance divisions.
Geographical performance
The UK became our largest geographical market following the Wax
Lyrical acquisition in 2016 and now accounts, in total, for 35% of
Group sales at GBP31.5 million, an increase of 9.2% on the prior
year (2017: GBP28.8 million). This growth was driven by increased
online and home fragrance sales. The UK market continues to remain
robust despite the continuing uncertainty of the Brexit outcome. We
remain cautiously optimistic in the UK given our diversified
distribution routes in the marketplace via major retailers,
independent stores, our own retail shops and our growing e-commerce
sites.
The United States is our second largest market at 30% of Group
sales. In translated figures, sales in the USA grew by 6.0% to
GBP26.7 million (2017: GBP25.2 million), which was an increase of
9.9% in local currency due to the stronger pound in 2018 over the
prior year.
Sales into South Korea increased by 24.6% to GBP8.2 million in
the year (2017: GBP6.6 million) and accounted for 9% of Group
sales. As a result of ongoing new product development work we were
able to reverse the recent trend of declining sales. We monitor
this market closely and work with our distributor to diversify our
product portfolio and target new customers. We remain confident for
the future in this key market.
Sales to the rest of the world decreased by 4.0% to GBP23.2
million in the year (2017: GBP24.2 million), largely driven by a
planned reduction in sales to India. Performance in Europe and
Asian markets is still encouraging. The Group has continued with
its plan of reducing our reliance on sales in our three major
markets as we continue to diversify and sell into over 70 countries
around the world.
Our strategy of growing our own online sales continues to bear
fruit, with sales growth of 24.4% to GBP4.3 million (2017: GBP3.4
million). We continue to invest in our online fulfilment
capabilities so we are able to cope with the dramatic growth of our
own e-commerce sites and retailer demand.
Segmental performance
The Group continues to operate under our three key segments:
Portmeirion UK ceramic, Portmeirion USA ceramic and home
fragrance.
Portmeirion UK - ceramic
Portmeirion UK, the main trading entity of the Group, had a
strong performance during the year with external sales of GBP48.1
million, an increase of 4.3% over the prior year (2017: GBP46.1
million). This growth was driven by the success of new product
launches, aided by our increase in e-commerce sales, particularly
Sara Miller London Portmeirion and Royal Worcester Wrendale
Designs.
Our UK factory expanded production during 2018, and we are
capable of further growth in 2019 to support key product launches
being manufactured in Stoke-on-Trent. We continue to experience
inflationary production cost pressures in labour and energy, but
have been able to mitigate these with efficiency savings and
technological innovations.
Portmeirion USA - ceramic
The USA remains our largest export market and is serviced by our
trading subsidiary Portmeirion USA. The company has an office in
New Jersey, showrooms in New York and a national warehousing and
logistics centre in Connecticut.
Sales at Portmeirion USA have grown by 5.2% in the year to
GBP26.0 million (2017: GBP24.7 million). This growth has been
driven by both new product development and increased sales of
heritage patterns including Portmeirion Botanic Garden and Spode
Christmas Tree.
The growth in the USA is satisfying and we anticipate further
growth in 2019.
Home fragrance
The Group acquired the Wax Lyrical business in May 2016. This
business continues to make good progress with total home fragrance
sales increasing by 11.1% over prior year to GBP15.5 million (2017:
GBP13.9 million). Over GBP2 million of the 2018 sales were made via
Portmeirion UK and Portmeirion USA distribution channels, which is
encouraging.
We manufacture home fragrance products in our factory in the
Lake District. Our plan is to increase capacity and output in 2019
to grow the business in line with the Group's targets.
We continue to believe the home fragrance division has strong
potential for growth in the UK and export markets.
Products and brands
Our brands and products are the key wealth creators for the
Group. We have five major brands - Portmeirion, Spode, Wax Lyrical,
Royal Worcester and Pimpernel. Supporting our brands is central to
our business strategy and we continue to invest in both our
heritage patterns and new ranges.
Portmeirion Botanic Garden, first launched in 1972, continues to
be our largest selling pattern with ongoing sales of over GBP30
million annually. We estimate there are over 50 million pieces of
Botanic Garden in use worldwide today. We continue to be vigilant
of imitators to Botanic Garden and indeed our other patterns, and
we are diligent in our legal protection of them.
New product development is a vital component of our brand value
and includes both new ranges and line extensions within our
existing patterns. Each year we continue to develop, extend and
refine our product offering to retain and build customer appeal. In
2018, we continued to refresh our heritage patterns such as
Portmeirion Botanic Garden and Spode Christmas Tree in order to
expand their appeal, as well as launch exciting new collections
such as Sara Miller London Portmeirion.
A list of our current patterns can be found at
www.portmeirion.co.uk, www.spode.co.uk, www.wax-lyrical.com,
www.royalworcester.co.uk and www.pimpernelinternational.co.uk.
Customers in the United States should go to
www.portmeirion.com.
Strategic priorities
The Group continues with its strategy of diversifying products,
customers, geographical markets and routes to market within those
countries. This strategy has enabled us to realise opportunities as
they have arisen and reduce our reliance on any one market,
customer or distribution channel.
Our long term strategy is focused on five key areas: profitable
sales growth, new product introduction, developing our brands,
enhancing our operational efficiency and capability and supporting
this with complementary strategic acquisitions.
Profitable sales growth underpins all of the Group's strategic
objectives, and we aim to achieve this by diversifying our markets
and completing targeted product development within those markets.
In 2018, we achieved our tenth consecutive year of record sales
with 5.7% growth to GBP89.6 million (2017: GBP84.8 million). We
also improved our operating profit margin to 11.1% (2017: 10.7%).
Our focus going forward will be to expand our export market breadth
and penetration and to promote organic growth within our home
fragrance division.
We continue to invest and enhance our five global brands, which
collectively have been in existence for nearly seven hundred
years.
Our operational capabilities are constantly reviewed in order to
position the Group to meet the requirements of our customers. The
continued trend of retail moving to online and drop-ship fulfilment
has required operational investment and will continue to do so. We
continue to drive efficiencies through our manufacturing and
distribution sites to combat inflationary cost pressures and remain
competitive.
The Group remains committed to acquiring businesses where there
is a strategic fit and the combination would be earnings enhancing.
We have now successfully integrated the Wax Lyrical business and
continue to drive towards our goal of strong growth for this
segment of the Group's sales.
As referred to in our principal risks section of our annual
report and accounts, we are aware of the current uncertainties that
surround the Brexit date of 29 March. The Group relies on the
importation of some raw materials and finished product and exports
to over 70 countries. Significant disruption to the flow of goods
across the UK border and changes in tariff rates would impact our
business in the short term. Our contingency planning includes
increasing stock of critical raw materials and product lines and
currency hedging where necessary.
Outlook
Although we face political and economic uncertainties around the
world, including Brexit, we look forward into 2019 with confidence
and at this very early stage of the year expect trading to be in
line with expectations for the full year.
Our strategy and core values remain unchanged. We are focused on
driving profitable sales growth through new product introduction,
developing our markets, investing behind our brands and enhancing
our operational capabilities and efficiency supported with
complementary strategic acquisitions. In particular we will invest
behind further growth in our online sales and fulfilment
capabilities around the world. We will continue to leverage the
potential of our home fragrance business and develop sales markets
not only in the UK but also around the world. Our tableware brand,
Spode, will be 250 years old next year and we will be developing
marketing and product plans to celebrate the heritage and the
future of this iconic British brand.
As such, we remain confident in our ability to create
shareholder value in the short, medium and long term.
Dick Steele Lawrence Bryan
Non-executive Chairman Chief Executive
Financial Review
2018 was a strong year, demonstrating our robust growth and
profit generation. Overall business performance is shown in our key
performance indicators in our annual report and accounts.
Revenue
Revenue totalled GBP89.6 million for the year ended 31 December
2018. This represented an increase of 5.7% over the previous year
(2017: GBP84.8 million).
Sales in our US market were translated on consolidation at a
lower exchange rate than in 2017. At constant currency the Group's
sales were up 7.2% on the previous year.
Our revenue grew in all of our three biggest geographical
markets. The UK market benefited from growth in both our ceramic
business and also in Wax Lyrical, our home fragrance business. Our
US market continued to expand with an ongoing shift to online
business from traditional department stores. Sales in South Korea
improved, reversing the trend of the last few years, aided by new
product development. New product launches continued to be a key
driver of sales growth. This included product extensions to
licensed ranges, such as Royal Worcester Wrendale Designs and Sara
Miller London Portmeirion, delivering sales expansion on prior
year. Heritage ceramic patterns under the Spode brand performed
well - Spode Blue Italian was up 18% and Spode Christmas Tree was
up 5%. Portmeirion Botanic Garden continued to sell well around the
world.
Our home fragrance division was up 11.1% with sales growth from
Made in England and seasonal ranges.
Profit
Profit before taxation was GBP9.7 million, an increase of GBP0.9
million on 2017.
Operating profit margins improved for the second consecutive
year to 11.1% (2017: 10.7%). This was enabled by good control over
our cost base and improved customer and product mix.
Earnings per share increased from 65.07p to 72.12p per
share.
Interest and financing costs
Finance costs reduced by GBP0.2m over the prior year due to
lower interest expense on the defined benefit pension scheme
deficit and reduced borrowing costs.
Taxation
The charge for taxation was GBP2.0 million (2017: GBP1.9
million), an effective rate of taxation of 20.8% (2017: 22.0%). The
decrease in the effective tax rate relates to the one-time
adjustment in deferred tax on our US business in 2017 that does not
repeat in 2018.
Dividends
The Board proposes a final dividend of 29.50p per share (2017:
27.26p) giving a total dividend for the year of 37.50p, an increase
of 8.2% (2017: 34.66p). This final dividend is expected to be paid
on 30 May 2019 to shareholders on the register on 26 April 2019
with an ex-dividend date of 25 April 2019. Our dividend cover
increased from 1.85 to 1.93 times and the Board considers this to
be a prudent level of cover with a long term target of
approximately two times.
The Group remains committed to a progressive dividend
policy.
Cash generation and net debt
At 31 December 2018, net cash was GBP2.3 million representing a
GBP0.7 million improvement on December 2017 (net cash GBP1.6
million).
This was after new capital investment of GBP1.1 million, pension
deficit contributions of GBP1.2 million, dividend payments of
GBP3.8 million and tax of GBP1.6 million. We continue to expect
that Portmeirion Group will remain a business that is cash
generative.
Bank facilities
The Group has agreed debt facilities with Lloyds Bank, totalling
GBP17 million at the balance sheet date. This consists of a GBP10
million revolving credit facility repayable in full in May 2022, a
GBP2 million overdraft facility on an annual renewal cycle and a
GBP10 million loan repayable equally over 5 years from May 2016, of
which GBP5 million was outstanding at the year end.
Our business remains seasonal due to the timing of our sales. We
therefore experience a large working capital swing during the year.
Our committed funding addresses this and we believe is prudent.
Assets and liabilities
Controlling our working capital remains an area of focus for us.
Inventory increased in the year from GBP18.1 million to GBP19.2
million. This increase was due to the impact of exchange rates on
consolidation of our US business as well as increased stock build
of key UK manufactured lines in preparation for 2019 orders.
During 2018, we paid GBP1.2 million into our defined benefit
pension scheme, which was closed in 1999. Many companies carry
defined benefit pension scheme deficits and our deficit is
relatively modest. The accounting deficit reduced from GBP1.7
million at the end of 2017 to GBPnil in 2018. This improvement was
due to our ongoing cash injection and changes to market forward
assumptions. We continue to keep this under review.
At the end of the year, we held treasury shares with a book
value of GBP0.4 million, in order to satisfy employee share
schemes. These shares were originally bought at an average price of
GBP1.87 each equating to 234,607 shares, having used 3,136 during
the year. In addition, we also hold 245,523 shares in The
Portmeirion Employees' Share Trust ('ESOP shares') to satisfy
employees' share options. These ESOP shares have a book value of
GBP2.8 million, having been bought at an average cost of GBP11.48
each. We increased our ESOP shares by 92,606 during the year.
Goodwill and intangibles on our balance sheet represent the
value of acquired brands, including Spode, Royal Worcester and Wax
Lyrical. The net book value of intangibles reduced in the year by
GBP0.4 million, being the net of the GBP0.6 million amortisation in
the year reduced by GBP0.2 million of computer software
additions.
Treasury and risk management
The impact of transactional currency flows on the Group's profit
is limited due to natural matching across different regions. Where
there is an anticipated material exposure to the Group, then our
policy is to use appropriate hedging instruments to mitigate that
risk. We have a robust approach to managing risk to deliver our
strategy as is explained in our annual report and accounts.
Mike Raybould
Group Finance Director
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2018
2018 2017
Notes GBP'000 GBP'000
Revenue 3 89,594 84,769
Operating costs (79,688) (75,687)
---------------------------------------------- ------ ---------- ----------
Operating profit 9,906 9,082
Interest income 14 17
Finance costs 5 (301) (487)
Share of results of associated undertakings 95 210
Profit before tax 9,714 8,822
Tax (2,023) (1,944)
---------------------------------------------- ------ ---------- ----------
Profit for the year attributable to equity
holders 7,691 6,878
---------------------------------------------- ------ ---------- ----------
Earnings per share 2 72.12p 65.07p
---------------------------------------------- ------ ---------- ----------
Diluted earnings per share 2 71.90p 64.79p
---------------------------------------------- ------ ---------- ----------
Dividends paid and proposed per share 4 37.50p 34.66p
---------------------------------------------- ------ ---------- ----------
All the above figures relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
Profit for the year 7,691 6,878
--------------------------------------------------- --------- ---------
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of net defined benefit
pension scheme liability 495 4,428
Deferred tax relating to items that will
not be reclassified subsequently to profit
or loss (84) (753)
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations 680 (767)
Deferred tax relating to items that may
be reclassified subsequently to profit
or loss (33) (57)
--------------------------------------------------- --------- ---------
Other comprehensive income for the year 1,058 2,851
--------------------------------------------------- --------- ---------
Total comprehensive income for the year
attributable to equity holders 8,749 9,729
--------------------------------------------------- --------- ---------
CONSOLIDATED BALANCE SHEET
31 December 2018
2018 2017
GBP'000 GBP'000
Non-current assets
Goodwill 7,229 7,229
Intangible assets 5,680 6,058
Property, plant and equipment 9,666 10,149
Interests in associates 2,567 2,525
Deferred tax asset - 340
Total non-current assets 25,142 26,301
--------------------------------- ----------- -----------
Current assets
Inventories 19,179 18,074
Trade and other receivables 15,638 12,431
Cash and cash equivalents 7,214 8,487
Total current assets 42,031 38,992
--------------------------------- ----------- -----------
Total assets 67,173 65,293
--------------------------------- ----------- -----------
Current liabilities
Trade and other payables (12,025) (10,556)
Current income tax liabilities (546) (475)
Borrowings (1,981) (1,981)
Total current liabilities (14,552) (13,012)
--------------------------------- ----------- -----------
Non-current liabilities
Pension scheme deficit (6) (1,672)
Deferred tax liability (991) (882)
Borrowings (2,974) (4,955)
Total non-current liabilities (3,971) (7,509)
--------------------------------- ----------- -----------
Total liabilities (18,523) (20,521)
--------------------------------- ----------- -----------
Net assets 48,650 44,772
--------------------------------- ----------- -----------
Equity
Called up share capital 555 554
Share premium account 7,310 7,193
Investment in own shares (3,257) (1,876)
Share-based payment reserve 282 550
Translation reserve 2,723 2,076
Retained earnings 41,037 36,275
--------------------------------- ----------- -----------
Total equity 48,650 44,772
--------------------------------- ----------- -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
Share-based
Share Investment payment
Share premium in own reserve Translation Retained
capital account shares GBP'000 reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 550 6,624 (2,936) 496 2,900 29,154 36,788
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
Profit for the
year - - - - - 6,878 6,878
Other comprehensive
income for the
year - - - - (824) 3,675 2,851
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
year - - - - (824) 10,553 9,729
Dividends paid - - - - - (3,433) (3,433)
Increase in share-based
payment reserve - - - 66 - - 66
Transfer on exercise
or lapse of options - - - (12) - 12 -
Shares issued
under employee
share schemes 4 569 1,094 - - (7) 1,660
Purchase of own
shares - - (34) - - - (34)
Deferred tax on
share-based payment - - - - - (4) (4)
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
At 1 January 2018 554 7,193 (1,876) 550 2,076 36,275 44,772
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
Profit for the
year - - - - - 7,691 7,691
Other comprehensive
income for the
year - - - - 647 411 1,058
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
year - - - - 647 8,102 8,749
Dividends paid - - - - - (3,766) (3,766)
Increase in share-based
payment reserve - - - 143 - - 143
Transfer on exercise
or lapse of options - - - (411) - 411 -
Shares issued
under employee
share schemes 1 117 1,138 - - (6) 1,250
Purchase of own
shares - - (2,519) - - (2) (2,521)
Deferred tax on
share- based payment - - - - - 23 23
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
At 31 December
2018 555 7,310 (3,257) 282 2,723 41,037 48,650
------------------------ ---------- ---------- ------------- ------------ -------------- ----------- ----------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
Operating profit 9,906 9,082
Adjustments for:
Depreciation of property, plant and equipment 1,326 1,329
Amortisation of intangible assets 591 588
Charge for share-based payments 143 66
Exchange gain/(loss) 31 (168)
Profit on sale of tangible fixed assets (16) (17)
Operating cash flows before movements in working
capital 11,981 10,880
Increase in inventories (657) (2,243)
Increase in receivables (3,005) (193)
Increase in payables 1,355 1,992
Cash generated from operations 9,674 10,436
Contributions to defined benefit pension scheme (1,200) (1,200)
Interest paid (248) (247)
Income taxes paid (1,591) (2,246)
------------------------------------------------------ --------- ---------
Net cash from operating activities 6,635 6,743
------------------------------------------------------ --------- ---------
Investing activities
Interest received 14 17
Dividend received from associate 115 -
Proceeds on disposal of property, plant and
equipment 76 47
Purchase of property, plant and equipment (879) (938)
Purchase of intangible assets (213) (80)
Net cash outflow from investing activities (887) (954)
------------------------------------------------------ --------- ---------
Financing activities
Equity dividends paid (3,766) (3,433)
Shares issued under employee share schemes 1,250 1,660
Purchase of own shares (2,521) (34)
New bank loans raised 3,000 3,000
Repayments of borrowings (5,000) (5,000)
Net cash outflow from financing activities (7,037) (3,807)
------------------------------------------------------ --------- ---------
Net (decrease)/increase in cash and cash equivalents (1,289) 1,982
Cash and cash equivalents at beginning of year 8,487 6,540
Effect of foreign exchange rate changes 16 (35)
------------------------------------------------------ --------- ---------
Cash and cash equivalents at end of year 7,214 8,487
------------------------------------------------------ --------- ---------
NOTES TO THE PRELIMINARY RESULTS
1. This announcement was approved by the Board of Directors on 20 March 2019.
1.1 The financial information set out above does not constitute
the Company's statutory accounts for the years ended 31 December
2018 or 2017, but is derived from those accounts. Statutory
accounts for 2017 have been delivered to the Registrar of Companies
and those for 2018 will be delivered following the Company's Annual
General Meeting. The auditors have reported on those accounts:
their reports were unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under
Sections 498(2) or (3) of the Companies Act 2006.
1.2 For the year ended 31 December 2018 the Group has prepared
its annual report and accounts in accordance with accounting
standards adopted for use in the European Union (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 2018.
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 At 31 December 2018 the Group had a net cash balance of
GBP2.3 million and had a bank facility of GBP17 million. It
manufactures approximately 49% of its products and sources the
remainder from third party suppliers. The Group sells into a number
of different markets worldwide and has a spread of customers within
its major UK and US markets.
After making enquiries, 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.
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:
2018
Weighted 2017 Earnings
average Earnings Weighted per
Earnings number of per share Earnings average number of share
GBP'000 shares (pence) GBP'000 shares (pence)
Basic earnings
per share 7,691 10,664,531 72.12 6,878 10,570,942 65.07
Effect of
dilutive
securities:
employee
share options - 32,746 - - 45,459 -
------------------ --------- ----------- ----------- --------- ------------------- ---------
Diluted earnings
per share 7,691 10,697,277 71.90 6,878 10,616,401 64.79
------------------ --------- ----------- ----------- --------- ------------------- ---------
3. Segmental reporting
The following tables provide an analysis of the Group's revenue
by operating segment and geographical market, irrespective of the
origin of the products:
2018 2017
Operating segment GBP'000 GBP'000
Portmeirion UK - ceramic 48,141 46,146
Portmeirion USA - ceramic 25,988 24,700
Home fragrance 15,465 13,923
89,594 84,769
---------------------------- --------- ---------
2018 2017
Geographical market GBP'000 GBP'000
United Kingdom 31,487 28,836
United States 26,669 25,156
South Korea 8,229 6,604
Rest of the World 23,209 24,173
--------------------- --------- ---------
89,594 84,769
--------------------- --------- ---------
NOTES TO THE PRELIMINARY RESULTS
Continued
4. Dividends
The Directors recommend that a final dividend for 2018 of 29.50p
(2017: 27.26p) per ordinary share be paid, subject to shareholders'
approval, on 30 May 2019 to shareholders on the register on 26
April 2019. The total dividend paid and proposed for the year is
37.50p (2017: 34.66p) per share.
5. Finance costs
2018 2017
GBP'000 GBP'000
Interest paid 260 313
Realised losses on financial derivatives 12 4
Net interest expense on pension scheme
deficit 29 170
301 487
------------------------------------------ --------- ---------
6. Reconciliation of earnings before interest, tax, depreciation
and amortisation (EBITDA)
2018 2017
GBP'000 GBP'000
Operating profit 9,906 9,082
Add back:
Depreciation 1,326 1,329
Amortisation 591 588
Earnings before interest, tax, depreciation
and amortisation 11,823 10,999
--------------------------------------------- --------- ---------
The accounts for the year ended 31 December 2018 will be posted
to shareholders on or before 12 April 2019 and laid before the
Company at the Annual General Meeting on 16 May 2019. 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR JMMPTMBBTBLL
(END) Dow Jones Newswires
March 21, 2019 03:00 ET (07:00 GMT)
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