RNS Number : 0539F

Portmeirion Group PLC

17 March 2022

17 March 2022

Portmeirion Group PLC

('the Group')

Preliminary results for the year ended 31 December 2021

Record revenue performance and profit recovery delivered

Full year dividend restored

Financial summary

                                            2021      2020     2019 
                                            GBPm      GBPm     GBPm 
 Revenue                                   106.0      87.9     92.8 
 Headline profit before tax(1)               7.2       1.4      7.4 
 Profit/(loss) before tax                    6.0     (0.2)      7.1 
 EBITDA                                     10.7       5.1     11.4 
 Headline basic earnings per share(1)     38.85p     4.96p   56.32p 
 Basic earnings per share                 23.58p   (6.02)p   54.66p 
 Dividends paid and proposed per share 
  in respect of the year                  13.00p       Nil    8.00p 



-- Record Group revenue of GBP106.0 million in the year to 31 December 2021, an increase of 21% over the prior year (2020: GBP87.9 million) and 14% over pre Covid-19 level (2019: GBP92.8 million).

-- Excellent Q4 seasonal trading performance despite ongoing global supply chain inflation and disruption, demonstrating the strength of consumer demand for our brands, progress with our online strategy and resilience of our operations.

-- Sales from our own ecommerce platforms increased by 16% over 2020 and are now 81% above 2019 levels. Online sales now represent 50% of total sales in our core UK and US markets in the year to 31 December 2021 (2020: 47%, 2019: 30%).

   --    Headline profit before tax(1) of GBP7.2 million (2020: GBP1.4 million, 2019: GBP7.4 million). 
   --    EBITDA of GBP10.7 million (2020: GBP5.1 million, 2019: GBP11.4 million). 
   --    Headline basic earnings per share(1) of 38.85p (2020: 4.96p, 2019: 56.32p). 

-- Dividend reinstated with final dividend proposed of 13.00p per share, bringing total dividends paid and proposed to 13.00p (2020: GBPnil, 2019: 8.00p).

-- Strong balance sheet maintained with net cash of GBP0.7 million at 31 December 2021 (2020: net cash GBP0.7 million, 2019: net debt GBP12.3 million). Cash generative, which has allowed accelerated investments in our strategic capabilities.

(1) Headline profit before tax and headline basic earnings per share exclude exceptional items - see notes 2 and 4.


-- Sales growth across three key markets of the US, UK and South Korea. Rest of the world sales also performed strongly and are 71% ahead of pre Covid-19 levels.

-- Substantial progress in developing online and digital capabilities, including ongoing investment in online platforms and warehouse fulfilment capabilities to support growth.

   --    Strong growth across all brands, particularly in Spode up 30% over 2020. 

-- Completed a number of key operational projects; hand and body line extension at Wax Lyrical, automation investment in our UK ceramic factory and mezzanine floor installed in our UK distribution centre.

-- Extended our long term energy hedging programme to Q1 2024, insulating the Group against the current volatility in energy prices.

-- Continued to deliver an improved carbon emission performance whilst undertaking a full evaluation of our ESG position in order to deliver a sustainable forward strategy.

-- Our UK businesses both achieved Investor in People (IIP) Platinum accreditation in recognition of our commitment to leading, supporting and improving our workforce.

Mike Raybould, Chief Executive commented:

" I am delighted with the significant progress we have made. Our record sales reflect the strong progress we have made on our strategy whilst successfully navigating the ongoing disruption from the pandemic. I would like to thank our employees around the world for their tireless efforts against this unprecedented backdrop.

We are focused on reaching an ever wider potential customer base - by developing online sales channels, building out new geographies and leveraging our brands and new product development more effectively. On each count, I am pleased to report we have made strong progress in 2021.

We saw a very successful seasonal holiday trading period driven by customers increasingly searching for our brands online as well as in physical retail stores. We have a roadmap for developing our brands around the world and the 30% against 2020 (and 33% against 2019) growth in our Spode brand indicates the potential opportunity ahead.

Our capital investments made in the last 12 months will enable increased production in the current year and beyond whilst driving improved operating margins through productivity gains.

We are mindful of the ongoing disruption to global supply chains and cost pressures including container freight rates. We have long term energy contracts in place until early 2024 that will protect the business in the short term from increased energy costs but are watchful that consumers around the world will require a period of adjustment to the inflationary pressures in everyday spend. We remain confident we can continue to navigate those challenges and that our brand strength and the changes we have made to the business will allow us to continue to grow in the short term with improved operating margins, and in the long term deliver significant gains in profitability.

We are also pleased that the strong trading performance and operating cash generated has allowed us to reintroduce our longstanding dividend to shareholders ."

Portmeirion Group PLC

Chairman and Chief Executive Statements


2021 was a record sales year for the Group driven by our strategy of reaching a wider potential customer base through developing our online sales channels, building new geographical markets and new product launches within our strong family of brands.

We were pleased to see growth over 2020 and 2019 pre Covid-19 levels in our UK and US core markets. We experienced a strong seasonal Christmas trading period, particularly in the US market where new product launches and our ability to handle drop ship order fulfilment enabled good levels of growth.

The work we did in 2019 and 2020 to safeguard our brands, long term, in South Korea enabled a robust and sustainable sales performance in 2021 with sales rising by 43% over the prior year.

We have continued our transformation to a more online and digital based business and were delighted to see 16% sales growth in our own branded websites despite high street retail stores reopening. 50% of total sales in our core UK and US markets now go through all online channels (2020: 47%, 2019: 30%). Developing a deeper direct relationship with the end consumer represents a huge opportunity for the Group and we will continue to invest in our capabilities in this area. Our website customer lists grew by 25% in 2021 and by over 220,000 (110%) on a two year basis versus 2019. With the opportunity of repeat purchases this is a key KPI for the Group and a positive indicator of future sales growth potential.

The benefit of our diversified sales channels and increasing the number of routes to market enabled a strong rebound in profitability in 2021 despite the well-publicised disruption and significant cost increases in global supply chains, particularly in container sea freight. The strength and depth of experience of our supply chain teams around the world really shone through and enabled our Q4 sales to beat our forecasts.

Full year headline profit before tax(1) was GBP7.2 million (2020: GBP1.4 million).

We are confident in our long-term strategy for growth and have a strong balance sheet to support our ambitions. The Group continues to be cash generative and we maintained a net cash positive position after net capital expenditure of GBP4.6 million during the year.

Financial Headlines

   --    Revenue was GBP106.0 million, an increase of 21% on 2020 and 14% on 2019 pre Covid-19 levels. 
   --    Like-for-like sales increased by 19% over the prior year. 

-- Own platform website sales increased by 16% to GBP11.4 million (2020: GBP9.8 million) and by 81% on a YO2Y basis.

   --    Headline basic earnings per share(1) was 38.85p per share (2020: 4.96p). 

-- Final dividend proposed of 13.00p per share, bringing total dividends paid and proposed to 13.00p (2020: GBPnil, 2019: 8.00p).

(1) Headline profit before tax and headline basic earnings per share exclude exceptional items - see notes 2 and 4.


The Board remains committed to a sustainable dividend policy with an appropriate level of cover. Our policy will ensure that we retain and invest enough capital in our business to drive long-term growth in our brands. We currently consider that a level of cover at or close to three times the dividends paid and proposed for the year is the appropriate rate for the medium term to allow increased investment whilst providing a return for shareholders.

During the Covid-19 pandemic we determined not to pay a dividend due to the impact and disruption on our business.

Due to the strong trading performance and cash generation, the Board are recommending a final dividend of 13.00p (2020: GBPnil). Total dividends paid and proposed for the year would therefore be 13.00p (2020: GBPnil).

The Board

The Board keeps its composition and performance under constant review so as to ensure that we have the appropriate skills, experience and resources to deliver on our four main board requirements of: setting strategy, reviewing progress against strategy, monitoring the resources required to deliver the strategy and complying with relevant requirements be they legal or otherwise. We undertake a formal board effectiveness review each year.

In order to promote best practice, each of the relevant committee meetings are now chaired by one of the Non-executive directors; Andrew Andrea chairs the Audit Committee, Angela Luger the Nomination Committee and Clare Askem the Remuneration Committee.

Environmental, Social and Governance (ESG)

We are focused on doing business ethically and sustainably - for our shareholders, the environment, our people, our customers, our suppliers and the communities we operate in. The Group has a long history of innovation and a strong track record of continual improvements in ESG.

We have made a very conscious decision to go beyond minimum compliance with our ESG requirements and push our progress to a more targeted, deliverable strategy. Throughout 2021, we worked to better understand the materiality of our impacts and to make well-informed choices in focusing our resources and efforts to deliver tangible strides towards a more sustainable world. We have made significant progress in recent years in reducing our energy usage, reducing carbon emission per tonne of sales product by 12% over 2020, and are committed and look forward to publishing our ambitions in key areas later this year. We are dedicated to delivering further significant improvements in energy consumption and carbon emissions in the coming years.

Our commitment to our people, ethics and governance are unfaltering, supported by our policies and processes. Further details on our corporate culture and its integration within the Group can be found on our website, www.portmeiriongroup.com, and in our annual report and accounts in the Section 172(1) statement - Engaging with key stakeholders to deliver long term success, in the Our commitment to ESG section and the Corporate Governance Statement.

We are again immensely proud of and thankful to all our people and teams for their commitment and hard work throughout 2021. Our results, safety records and staff well-being are testimony to all their efforts.

The Group is a committed member of the Quoted Companies Alliance ("QCA") and has chosen to apply the QCA Corporate Governance Code as the most appropriate for our size and structure. We have complied with the principles of the QCA code throughout 2021 and continue to do so. Further details of our approach to governance can be found on our website and in our annual report and accounts. The Board consider our governance procedures to be appropriate for a company of our size, however we are always open to improvement and welcome feedback from shareholders.

Operational Overview

Revenue for the Group increased by 21% to GBP106.0 million (2020: GBP87.9 million).

The US is our largest geographical market representing 40% of Group sales. In translated figures, sales in the US increased by 27% to GBP42.5 million (2020: GBP33.5 million) due to the benefit of increased online channel sales and successful product range extensions. Sales of our ever popular Spode Christmas Tree range, loved for generations as part of the ritual of family seasonal celebrations, grew strongly as we reached ever more customers through online sales and new extensions to the range.

Our UK market is our second largest market and in 2021 accounted for 31% of Group sales at GBP32.9 million (2020: GBP31.8 million), an increase of 3% over the prior year. Excluding the sales of hand sanitiser in 2020 in response to the Covid-19 pandemic, UK market sales increased by 14%.

As previously reported, we took action in 2019 and 2020 to reduce levels of parallel shipping into our South Korean market, enabling overstocks to subside. This allowed for a much more robust and sustainable level of sales in 2021, with good sell through to the end consumer. Sales into South Korea were GBP18.7 million (2020 GBP13.1 million, 2019: GBP20.8 million). We are pleased that the steps we took to stabilise this important market have been successful and we expect to see growth from a much more solid base in the coming years.

Products and brands

Our brands and product ranges are key assets and a major economic driver for the Group. Our six major brands - Portmeirion, Spode, Wax Lyrical, Nambé, Royal Worcester and Pimpernel - have over 750 years of combined history and are sold across the world. Their design and appeal are timeless and are much loved in homes around the world.

We see significant potential to grow the sales footprints of our brands in the future and have developed more structured roadmaps in the past 18 months to help deliver on this potential. Our roadmaps include developing our heritage ranges such as Portmeirion Botanic Garden and Spode Christmas Tree as well as more contemporary ranges and licensed collaboration ranges. We are fortunate, in Spode Christmas Tree and Portmeirion Botanic Garden, to have two of the most successful and long selling ranges in the global tableware category.

Portmeirion Botanic Garden was first launched in 1972 and remains our largest selling range. We estimate there are over 50 million pieces of Botanic Garden in use worldwide today and there is a strong repeating sales element. To mark its 50th year in 2022 we will be launching new range extensions to further support and grow the appeal and longevity of this historic range.

The brand work we have done should allow us to accelerate and leverage our brand portfolio across our diversified sales channels and markets. We are pleased to see the early benefits of our work in 2021. Our Spode brand, which celebrated its 250th anniversary in 2020, grew strongly in 2021, with sales up 30% on 2020 (up 33% on 2019). Key drivers included new product development and line extensions within the ever popular Spode Christmas Tree range, new contemporary range launches and the benefit of increased availability on online channels. Similarly sales in our Pimpernel brand were up 28% and 26% on a two year basis.

Strategic areas of focus

Our commercial strategy is focused on reaching more customers on more occasions through:

   --    developing online sales channels; 
   --    building new markets and geography; 
   --    new product launches/new categories; and 
   --    leveraging our brands more effectively. 

Our operating strategy supports our commercial strategy and is to build additional capabilities and increased efficiency/productivity in everything we do.

As a result, our twin financial goals are:

   1.   consistent and sustainable sales growth; and 
   2.   improved operating margins, thereby converting sales more effectively into profit. 

We have continued increased investment in these strategic areas despite the short-term challenges of Covid-19, as we believe this will enable the Group to prosper in the long-term.

As a result, the strategic capabilities of the business have taken a huge step forward in the past eighteen months. We have significantly expanded our online sales and digital marketing teams and re-organised our core market and export sales teams to more effectively leverage our brands.

As we increasingly reach more end customers directly, we are able to build an ever stronger emotional affinity for our brands and products and get much improved feedback that helps us curate our ranges and design tomorrow's products more effectively.

We are heavily investing in automation in our factories and warehouses, building further capacity and efficiencies in production and increasing our drop ship online warehouse fulfilment capabilities.


   1.   Developing online sales channels 

Our brands are known and loved around the world. There is a huge opportunity to reach more potential customers through online channels including our own branded websites. The benefit of building an increasingly direct relationship with the end consumer allows us to continue to communicate after the first purchase, building a long term relationship with the customer. Increasingly we see potential customers searching for 'our brand names' when searching online for products within the categories we operate in. This affinity for our brands and what they stand for is an important point of difference that we can leverage further as we develop our web systems, data and analytics.

We have continued to invest through 2021 in improving our website sales platforms and digital marketing assets. In the UK and US we have established web sales platforms for all our core brands. Website sales increased by 16% in 2021, building on the significant growth we achieved in 2020 when retail stores were shut for much of the year. On a two year basis, our own website sales are up 81%. For our two core markets in the UK and US, sales through all online channels (including third party retailer websites) increased to 50% for the first time (2020: 47%, 2019: 30%).

In addition, we have built extra warehouse capacity for online/drop ship order fulfilment that, for the UK, will allow us to ship approximately double the number of direct to consumer parcels per day in the second half of 2022.

We have an ongoing roadmap of development to further boost our online sales and digital marketing for all our brands. In 2022, we expect to launch new websites in the UK, building on the website re-platforming project we executed in the US in 2020. We are also working on improved CRM and launching Customer VIP club programmes in 2022.

   2.   Building new markets and geography 

Our products are sold in more than 70 countries around the world, however, our three largest markets of the UK, US and South Korea account for 89% of all Group sales.

We restructured our international sales teams in 2020 with a focus on developing more sizeable rest of world markets over the next three to five years.

We are pleased to report early positive results with our rest of world sales growing by 27% in 2021 and we expect to see further strong growth in the next three years. In 2021, we appointed a new distributor for all our brands in China and we are excited to work with them on developing new customers in this region. We have also seen good growth in 2021 in a number of other markets including Australia and Scandinavia.

   3.   New product launches 

Developing and launching new products and extending existing ranges is a key strategic driver for sales growth. We have implemented new global processes for product development and launch and have a future pipeline of development going out two years.

In 2021 we managed to keep our product launch programmes on track despite ongoing disruption to supply chains and sales markets from Covid-19. This included a new Sophie Conran for Portmeirion tableware range, extensions to our ever popular Spode Christmas Tree range, a new Spode range: Creatures of Curiosity and new ranges for our Wax Lyrical and Nambé brands.

Part of our strategic focus in this area is to see an improved sales contribution from new product launches. In 2021, new products launched (within the last 12 months) generated over 10% of total Group sales. In 2022 we celebrate the 50th anniversary of Portmeirion Botanic Garden and will be launching new products under this range as well as substantial new launches across our other brands.

We continue to focus on changing and improving packaging formats for our products to enhance our customer proposition for online channels.

   4.   Leveraging our brands more effectively 

Telling the story to the end consumer of what our brands and product ranges stand for, increasingly in online channels, represents a significant opportunity for the Group. We have increased resource, brand marketing and digital marketing spend over the past two years and this will continue to support our growth ambitions - and allow us to reach more potential end customers on more occasions than ever before.

We are looking to leverage the Group's infrastructure more effectively across all our consumer brands including the more recent acquisitions: Wax Lyrical and Nambé.

In 2021, we combined UK sales teams across our tableware brands and home fragrance division to allow more effective sales synergies.

Nambé brand sales increased by 23% to record a five year high despite ongoing disruption from Covid-19 to sales markets through increased distribution, including online and better stock availability.

Home fragrance sales, excluding hand sanitiser ranges (production started in 2020 in reaction to the pandemic), grew by 5% in 2021. Our Wax Lyrical brand has been impacted by Covid-19 enforced retail closures for much of 2020 and 2021, however, we expect to see a return to growth in 2022 as restrictions are lifted.

In addition, we now produce home fragrance products under our Sophie Conran for Portmeirion and Royal Worcester Wrendale Designs tableware ranges. In 2022, we also expect to launch home fragrance products as an extension to our hugely successful Portmeirion Botanic Garden range as part of our celebrations of Botanic Garden's 50th year.

All of our brands grew in 2021 and we are pleased to see the early and positive signs from our efforts to leverage our brands more effectively, with Spode and Pimpernel sales up 33% and 26% respectively on a two year basis.


In order to support our growth and to deliver higher operating margins, the Group has a clear plan to deliver increased production capacity, improved productivity, lower costs per unit and increased capabilities.

We have increased capital investment in our operations in the past 24 months. In our Stoke-on-Trent manufacturing facility we have designed new automation that will add capacity and lower costs and reliance on manual labour. Despite delays in final assembly of robotics due to the global shortage in silicon chips, a number of these projects went live in late 2021 and early 2022. Further investments are in progress for 2022 and 2023. As well as delivering much increased levels of production output these investments will also support our goal of reducing our cost per unit by at least 10%.

In our home fragrance manufacturing site, in Cumbria, we completed the build of a new hand and body liquid production facility in the second half of 2021. This facility will add capacity for production of core existing ranges of reed diffusers and also allow the production and sales of hand and body liquid soaps for the first time.

The experience and skills of our operations and supply chain teams shone through 2021 as the business successfully coped with the immense disruption to global supply chains and container freight shipping. The fact that the business had a very strong Christmas trading period, resulting in a record sales year for the Group, is a testament to the immense efforts and experience of our teams.

We have a roadmap for increasing warehouse capacity for drop ship/online order fulfilment in both our key UK and US markets. The first phase of this - building a large mezzanine floor extension in our UK warehouse - was completed in Q4 2021 and will support expected online sales growth in 2022.

In 2021, we continued to focus on improved procurement to drive efficiencies in spending. In the first half of the year we also extended our long term energy hedging programme to Q1 2024, insulating the Group against the current volatility in energy prices.


We are pleased with the progress we have made in 2021 - not only navigating the ongoing challenges of Covid-19 as evidenced by our record sales performance but also our continued track record on execution of our long term strategy.

We remain cognisant of ongoing economic uncertainty, in particular the challenges to the consumer of the rising costs of living including energy and fuel costs, and the ongoing impact of the war in Ukraine. Likewise that it will take time for global supply chains and container freight costs to stabilise following Covid-19 and return to some sort of normality. We have long term energy contracts in place until early 2024 that will protect the business in the short term from increased energy costs but are watchful that consumers around the world will require a period of adjustment to the inflationary pressures in everyday spend.

However, we believe our investments in our brands, digital and online presence and increasingly diversified sales channels and geography will enable us to more than offset the afore-mentioned challenges and continue to grow in 2022 and over the coming years. Our operational investments in 2021 will enable growth in production output and productivity in 2022 which, together with our proven supply chain , should provide a solid foundation for future progress, including further opportunities to improve margin.

We have a strong balance sheet, positive cash flow and a clear and focused strategy which we believe will enable us to grow profitably over the short and medium term.

   Dick Steele                                                      Mike Raybould 
   Non-executive Chairman                               Chief Executive 

This announcement contains inside information for the purposes of the retained UK version of the EU Market Abuse Regulation No 596/2014 (UK MAR).


 Portmeirion Group PLC: 
 Mike Raybould, Chief Executive       +44 (0) 1782        mraybould@portmeiriongroup.com 
                                       743 443 
 David Sproston, Group Finance        +44 (0) 1782        dsproston@portmeiriongroup.com 
  Director                             743 443 
 Hudson Sandler: 
 Dan de Belder                        +44 (0) 207 796     ddebelder@hudsonsandler.com 
 Nick Moore                                               nmoore@hudsonsandler.com 
   Panmure Gordon                       +44 (0) 207 886 
   (Nominated Adviser and Broker):      2500 
 Freddy Crossley                      Corporate Finance 
 Rupert Dearden                       Corporate Broking 
 Singer Capital Markets         +44 (0) 207 
  (Joint Broker):               496 3000 
 Peter Steel / Asha Chotai    Investment Banking 
 Rachel Hayes 

Financial Review

Following the challenging backdrop of disruption and lockdowns of 2020, the year started with the UK back in lockdown and significant inflation and disruption to both supply chains and labour markets.

Set against this, the Group continued to invest in our strategy, confident in our ability to generate growth and make progress against our strategic targets.

We saw ongoing demand for our brands, growing well across all key geographical markets and further increases in online channel sales.


Revenue for the year ended 31 December 2021 totalled GBP106.0 million, an increase of 21% over the prior year (2020: GBP87.9 million) and is now 14% above pre-pandemic levels (2019: GBP92.8 million).

The Group has benefited from additional sales from recent acquisitions; Nambé was acquired in July 2019 and Portmeirion Canada was fully acquired in August 2020. On a like-for-like basis revenue was 19% ahead of 2020.

Sales in our US market are translated from US dollars into sterling at the average daily exchange rate. In 2021, sterling was stronger against the US dollar than in 2020, therefore at a constant currency rate the Group's like-for-like sales would have been 22% higher.

Geographical sales performance was strong overall and we saw growth across our three key markets of the US, UK and South Korea.

The UK and US markets both achieved record sales levels, driven by online where 50% of sales in these markets were via online channels (2020: 47%, 2019: 30%).

In South Korea, sales increased by 43% to GBP18.7 million (2020: GBP13.1 million) as consumer demand recovered from the prior year. We remain confident that this is a sustainable base from which we can grow sales going forward.

Rest of the world markets increased by 27% to GBP12.0 million (2020: GBP9.4 million). This was driven by strong sales in Canada following the acquisition of the remaining 50% of our distribution partner in 2020.


Headline profit before taxation(1) was GBP7.2 million, a significant improvement over the 2020 level of GBP1.4 million and broadly in line with the pre-pandemic level in 2019 of GBP7.4 million. Statutory profit before taxation was GBP6.0 million (2020: loss before taxation GBP0.2 million, 2019: profit before taxation GBP7.1 million).

This strong profit performance was despite ongoing disruption within a number of our key sales markets.

In the UK, retail stores were closed for the first quarter of the year, and in Canada for much of the first half of the year. This restricted sales channels, although we were able to compensate for these shortfalls due to strong trading performance elsewhere, including online sales in the UK and US.

The well-publicised supply chain inflation and delays impacted our markets around the world, with container freight rates at five times 2019 levels.

Covid-19 restrictions and isolation periods also impacted absence rates in our factories and warehouses, which in turn disrupted sales fulfilment and production efficiency.

Set against these significant challenges, the Group managed this disruption incredibly well and delivered a record sales performance, with profit before taxation in line with 2019 levels.

(1) Headline profit before taxation excludes exceptional items - see note 4.

Interest and financing costs

Finance costs for the Group decreased by GBP0.1 million to GBP0.6 million (2020: GBP0.7 million) due to reduced borrowing facilities as long term loans were repaid.

We expect to see finance costs continue to reduce as long term loans are repaid.


The charge for taxation for the year was GBP2.7 million (2020: GBP0.5 million). The increased charge is due to the improved profit performance over the prior year and the one-off impact of the change in UK corporation tax rate from 19% to 25% which caused a deferred tax charge of GBP1.1 million.


The Board proposes a final dividend of 13.00p per share (2020: GBPnil) giving a total dividend for the year of 13.00p (2020: GBPnil). The final dividend is expected to be paid on 26 May 2022 to shareholders on the register on 22 April 2022 with an ex-dividend date of 21 April 2022.

We are reintroducing the dividend at a cover of three times in order to balance our ongoing investment behind our growth strategy with providing a positive return to shareholders.

Cash generation and net debt

At 31 December 2021, the Group had a net cash balance of GBP0.7 million (comprising cash and cash equivalents of GBP7.6 million less borrowings of GBP6.9 million). This compares to a net cash balance of GBP0.7 million at the prior year end.

The Group continues to be cash generative; operating cash generated was GBP8.7 million (2020: GBP8.7 million) despite the increased cost of inventory due to container freight prices.

The positive operating cash flows allowed the Group to continue to invest behind our strategic goals; net capital expenditure was GBP4.6 million in the year (2020: GBP2.8 million). This included the new hand and body line extension at our home fragrance factory in the Lake District, factory automation investments in our Stoke-on-Trent ceramic factory and a new mezzanine floor at our main UK distribution site.

Bank facilities

The Group has agreed debt facilities with Lloyds Bank which totalled GBP22 million at the balance sheet date. This consists of a GBP10 million revolving credit facility available until February 2025, a GBP5 million overdraft on an annual renewal cycle and a GBP10 million term loan repayable by January 2025 of which GBP7 million was outstanding at the year end. The overdraft and revolving credit facilities were not being utilised at 31 December 2021.

Our business remains seasonal due to the second half weighting of our sales. We therefore experienced, in common with previous years, a working capital swing of around GBP8 million during the year as we built inventory to match our sales demand. At the year end we had available cash and borrowing headroom of GBP22.6 million. We believe our committed funding lines more than adequately addresses this seasonal dynamic and is prudent.

Assets and liabilities

We had a net working capital outflow of GBP2.3 million which was driven by increased inventory over the prior year. Increased receivable balances were largely offset by increased payable balances due to an increase in year on year trading activity.

Our inventory balance increased to GBP29.2 million (2020: GBP27.3 million) which was predominantly caused by supply chain inflation due to increased raw material and finished goods prices inflating the cost of goods. We continue to monitor supply chain disruption and the impact it may have on our inventory costs and lead times.

We continue to make contributions to our closed defined benefit pension scheme and paid GBP1.35 million during the year, with agreed contributions of GBP0.9 million for 2022.

At the 2020 year end we had an accounting deficit of GBP2.7 million which had increased due to a fall in the discount rate used to calculate scheme liabilities, which is based on corporate bond yields.

As yields have recovered following the pandemic, we now have a GBP0.9 million pension surplus under IAS 19. We continue to evaluate ways to de-risk the volatility in the scheme, with a medium term aim to reach low-dependency.

At the year end we held treasury shares with a book value of GBP0.4 million in order to satisfy employee share option schemes, which had been bought at an average price of GBP1.87 per share, equating to 218,645 shares, having used 8,330 during the year. In addition, we also hold 234,523 shares in The Portmeirion Employees' Share Trust. These shares have a book value of GBP2.7 million, having been bought at an average cost of GBP11.58 each. The balance of these shares did not move during the year.

Goodwill and intangible assets on our balance sheet largely represent the value of the acquired brands of Spode, Royal Worcester, Wax Lyrical and Nambé, as well as computer software investment including our online webstore and associated infrastructure. The balance of intangible assets increased during the year as we continued to invest in our UK and US websites and systems.

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. In the year sterling strengthened against both the US dollar and euro, but this had no material impact on Group profit.

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 as explained in our annual report and accounts.

David Sproston

Group Finance Director


For the year ended 31 December 2021

                                                             2021       2020 
                                                Notes     GBP'000    GBP'000 
   Revenue                                        3       106,018     87,854 
 Operating costs before exceptionals                     (98,375)   (85,661) 
---------------------------------------------  ------  ----------  --------- 
   Headline operating profit(1)                             7,643      2,193 
 Exceptional items                              4 
 - restructuring costs                                    (1,036)    (1,288) 
 - acquisition costs                                            -      (104) 
 - share issue costs                                            -       (55) 
 - Covid-19 costs                                               -      (176) 
 - GMP equalisation                                         (197)          - 
   Operating profit                                         6,410        570 
   Interest income                                             12         13 
 Finance costs                                  5           (580)      (740) 
 Profit on sale of fixed assets                               120          - 
 Share of results of associated undertakings                    -       (75) 
   Headline profit before tax(1)                            7,195      1,391 
 Exceptional items                              4 
 - restructuring costs                                    (1,036)    (1,288) 
 - acquisition costs                                            -      (104) 
 - share issue costs                                            -       (55) 
 - Covid-19 costs                                               -      (176) 
 - GMP equalisation                                         (197)          - 
   Profit/(loss) before tax                                 5,962      (232) 
   Tax                                                    (2,721)      (503) 
---------------------------------------------  ------  ----------  --------- 
   Profit/(loss) for the year attributable 
   to equity holders                                        3,241      (735) 
---------------------------------------------  ------  ----------  --------- 
 Earnings per share                       2 
 Basic                                        23.58p   (6.02)p 
 Diluted                                      23.49p   (6.02)p 
---------------------------------------      -------  -------- 
 Headline earnings per share(1)           2 
 Basic                                        38.85p     4.96p 
 Diluted                                      38.71p     4.95p 
---------------------------------------      -------  -------- 
 Dividends proposed and paid per share    6   13.00p     0.00p 
---------------------------------------      -------  -------- 

All the above figures relate to continuing operations.

(1) Headline operating profit is statutory operating profit of GBP6,410,000 (2020: GBP570,000) add exceptional items of GBP1,233,000 (2020: GBP1,623,000). Headline profit before tax is statutory profit before tax of GBP5,962,000 (2020: GBP232,000 loss before tax) add exceptional items of GBP1,233,000 (2020: GBP1,623,000).


For the year ended 31 December 2021

                                                          2021       2020 
                                                       GBP'000    GBP'000 
   Profit/(loss) for the year                            3,241      (735) 
---------------------------------------------------  ---------  --------- 
 Items that will not be reclassified subsequently 
  to profit or loss: 
 Remeasurement of net defined benefit 
  pension scheme liability                               2,505    (3,208) 
 Deferred tax relating to items that will 
  not be reclassified subsequently to profit 
  or loss                                                  267        843 
 Items that may be reclassified subsequently 
  to profit or loss: 
 Exchange differences on translation of 
  foreign operations                                        64      (525) 
 Deferred tax relating to items that may 
  be reclassified subsequently to profit 
  or loss                                                   45       (26) 
---------------------------------------------------  ---------  --------- 
 Other comprehensive income/(loss) for 
  the year                                               2,881    (2,916) 
---------------------------------------------------  ---------  --------- 
 Total comprehensive income/(loss) for 
  the year attributable to equity holders                6,122    (3,651) 
---------------------------------------------------  ---------  --------- 


31 December 2021

                                       2021       2020 
                                    GBP'000    GBP'000 
   Non-current assets 
 Goodwill                             8,978      8,978 
 Intangible assets                    7,126      6,976 
 Property, plant and equipment       14,398     12,197 
 Right-of-use assets                  6,409      6,910 
 Pension scheme surplus                 910          - 
 Deferred tax asset                       -        119 
 Total non-current assets            37,821     35,180 
--------------------------------  ---------  --------- 
   Current assets 
 Inventories                         29,224     27,313 
 Trade and other receivables         19,243     15,269 
 Current income tax asset               662        579 
 Cash and cash equivalents            7,616     11,590 
 Total current assets                56,745     54,751 
--------------------------------  ---------  --------- 
   Total assets                      94,566     89,931 
--------------------------------  ---------  --------- 
   Current liabilities 
 Trade and other payables          (16,245)   (12,601) 
 Lease liabilities                  (1,695)    (2,143) 
 Borrowings                         (1,986)    (3,972) 
 Total current liabilities         (19,926)   (18,716) 
--------------------------------  ---------  --------- 
   Non-current liabilities 
 Pension scheme deficit                   -    (2,721) 
 Deferred tax liability             (2,609)      (738) 
 Lease liabilities                  (5,119)    (5,096) 
 Borrowings                         (4,965)    (6,951) 
 Total non-current liabilities     (12,693)   (15,506) 
--------------------------------  ---------  --------- 
   Total liabilities               (32,619)   (34,222) 
--------------------------------  ---------  --------- 
 Net assets                          61,947     55,709 
--------------------------------  ---------  --------- 
 Called up share capital                710        710 
 Share premium account               18,344     18,344 
 Investment in own shares           (3,124)    (3,140) 
 Share-based payment reserve            128        152 
 Translation reserve                  1,186      1,077 
 Retained earnings                   44,703     38,566 
--------------------------------  ---------  --------- 
 Total equity                        61,947     55,709 
--------------------------------  ---------  --------- 


For the year ended 31 December 2021

                                           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 2020               555       7,310        (3,146)            87           1,628       41,664      48,098 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 
 Loss for the year                 -           -              -             -               -        (735)       (735) 
 Other comprehensive 
  loss for the year                -           -              -             -           (551)      (2,365)     (2,916) 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 
 Total comprehensive 
  loss for the year                -           -              -             -           (551)      (3,100)     (3,651) 
 Unclaimed dividends 
  written back                     -           -              -             -               -            4           4 
 Issue of own shares             155      11,074              -             -               -            -      11,229 
 Cost of issue 
  of own shares                    -        (40)              -             -               -            -        (40) 
 Increase in share-based 
  payment reserve                  -           -              -            86               -         (21)          65 
 Transfer on exercise 
  or lapse of options              -           -              -          (21)               -           21           - 
 Shares issued 
  under employee 
  share schemes                    -           -              6             -               -          (6)           - 
 Deferred tax on 
  share- based payment             -           -              -             -               -            4           4 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 
 At 1 January 2021               710      18,344        (3,140)           152           1,077       38,566      55,709 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 
 Profit for the 
  year                             -           -              -             -               -        3,241       3,241 
 Other comprehensive 
  income for the 
  year                             -           -              -             -             109        2,772       2,881 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 
 Total comprehensive 
  income for the 
  year                             -           -              -             -             109        6,013       6,122 
 Increase in share-based 
  payment reserve                  -           -              -            64               -            -          64 
 Transfer on exercise 
  or lapse of options              -           -              -          (88)               -           88           - 
 Shares issued 
  under employee 
  share schemes                    -           -             16             -               -         (16)           - 
 Deferred tax on 
  share- based payment             -           -              -             -               -           52          52 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 
 At 31 December 
  2021                           710      18,344        (3,124)           128           1,186       44,703      61,947 
------------------------  ----------  ----------  -------------  ------------  --------------  -----------  ---------- 


For the year ended 31 December 2021

                                                             2021       2020 
                                                          GBP'000    GBP'000 
   Operating profit                                         6,410        570 
 Adjustments for: 
 Depreciation of property, plant and equipment              1,652      1,634 
 Depreciation of right-of-use assets                        1,933      2,037 
 Amortisation of intangible assets                            698        848 
 Charge for share-based payments                               64         65 
 Charge for GMP equalisation                                  197          - 
 Exchange gain/(loss)                                          36      (100) 
 Loss on sale of tangible fixed assets                         17         12 
 Operating cash flows before movements in working 
  capital                                                  11,007      5,066 
 (Increase)/decrease in inventories                       (2,071)        171 
 (Increase)/decrease in receivables                       (3,960)      4,398 
 Increase/(decrease) in payables                            3,707      (913) 
 Cash generated from operations                             8,683      8,722 
 Contributions to defined benefit pension scheme          (1,350)      (900) 
 Interest paid                                              (368)      (497) 
 Income taxes paid                                          (461)      (125) 
------------------------------------------------------  ---------  --------- 
 Net cash inflow from operating activities                  6,504      7,200 
------------------------------------------------------  ---------  --------- 
 Investing activities 
 Interest received                                             12         12 
 Purchase of property, plant and equipment                (4,511)    (2,556) 
 Proceeds from disposal of property, plant and 
  equipment                                                   786          - 
 Purchase of intangible assets                              (843)      (196) 
 Acquisition of subsidiary                                      -      (541) 
 Net cash outflow from investing activities               (4,556)    (3,281) 
------------------------------------------------------  ---------  --------- 
 Financing activities 
 Equity dividends paid                                          -          - 
 Issue of own shares                                            -     11,229 
 Costs taken directly through reserves                          -       (40) 
 New bank loans raised                                          -      5,000 
 Principal elements of lease payments                     (1,927)    (2,084) 
 Repayments of borrowings                                 (4,000)    (7,581) 
 Net cash (outflow)/inflow from financing activities      (5,927)      6,524 
------------------------------------------------------  ---------  --------- 
 Net (decrease)/increase in cash and cash equivalents     (3,979)     10,443 
 Cash and cash equivalents at beginning of year            11,590      1,151 
 Effect of foreign exchange rate changes                        5        (4) 
------------------------------------------------------  ---------  --------- 
 Cash and cash equivalents at end of year                   7,616     11,590 
------------------------------------------------------  ---------  --------- 


   1.             This announcement was approved by the Board of Directors on 16 March 2022. 

1.1 The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2021 or 2020, but is derived from those accounts. Statutory accounts for 2020 have been delivered to the Registrar of Companies and those for 2021 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 2021 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 2021.

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 the year end the Group had net cash of GBP0.7 million (comprising cash and cash equivalents of GBP7.6 million less borrowings of GBP6.9 million) and had unutilised bank facilities with available funding of GBP15.0 million. Operating cash generation was strong during the year at GBP8.7 million (2020: GBP8.7 million).

The Group sells into over 70 countries worldwide and has a spread of customers and sales channels within its major UK and US markets with adequate credit insurance cover in export markets where required. The Group manufactures approximately 40% of its products and sources the remainder from a range of third-party suppliers.

Following the negative impact on trading in 2020 caused by the Covid-19 pandemic, the Group's performance rebounded strongly despite ongoing disruption in key sales markets and to supply chain and labour markets. However, the Group is well diversified and retains a strong balance sheet with significant funding headroom available.

The Group has also produced a sensitivity analysis to its cash flow forecast based upon current trading conditions, including the impact of the current war in Ukraine, and to allow for further potential impact of Covid-19; this demonstrated the Group still has sufficient headroom within borrowing facilities.

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.



   2.             Earnings per share 

The calculation of basic and diluted earnings per share is based on the following data:

                                        2021                                 2020 
                                    Weighted                             Weighted 
                                     average                              average 
                                      number     Earnings                  number     Earnings 
                       Earnings           of    per share   Earnings           of    per share 
                        GBP'000       shares      (pence)    GBP'000       shares      (pence) 
 Basic earnings 
  per share               3,241   13,747,450        23.58      (735)   12,208,723       (6.02) 
 Effect of dilutive 
  securities:                 -       49,235            -          -            -            - 
  employee share 
--------------------  ---------  -----------  -----------  ---------  -----------  ----------- 
 Diluted earnings 
  per share               3,241   13,796,685        23.49      (735)   12,208,723       (6.02) 
--------------------  ---------  -----------  -----------  ---------  -----------  ----------- 
                                        2021                                 2020 
                                    Weighted                             Weighted 
                                     average                              average 
                                      number     Earnings                  number     Earnings 
                       Earnings           of    per share   Earnings           of    per share 
                        GBP'000       shares      (pence)    GBP'000       shares      (pence) 
 Headline basic 
  earnings per 
  share                   5,341   13,747,450        38.85        605   12,208,723         4.96 
 Effect of dilutive 
  employee share 
  options                     -       49,235            -          -        8,335            - 
--------------------  ---------  -----------  -----------  ---------  -----------  ----------- 
 Headline diluted 
  earnings per 
  share                   5,341   13,796,685        38.71        605   12,217,058         4.95 
--------------------  ---------  -----------  -----------  ---------  -----------  ----------- 

The calculation of basic and diluted headline earnings per share is based on the following data:

                                                       2021       2020 
                                                    GBP'000    GBP'000 
 Profit/(loss) for the year attributable to 
 equity holders                                       3,241      (735) 
 Add back/(deduct): 
 Exceptional items                                    1,233      1,623 
 Tax effect of exceptional items                      (223)      (283) 
 Exceptional impact of remeasuring deferred           1,090          - 
 tax balances from 19% to 25% 
 Headline earnings                                    5,341        605 
------------------------------------------------  ---------  --------- 



   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:

                          2021       2020 
 Operating segment     GBP'000    GBP'000 
   UK                   59,686     52,918 
 North America          46,332     34,936 
                       106,018     87,854 
-------------------  ---------  --------- 
                            2021       2020 
 Geographical market     GBP'000    GBP'000 
   United Kingdom         32,871     31,845 
 United States            42,492     33,493 
 South Korea              18,680     13,071 
 Rest of the World        11,975      9,445 
---------------------  ---------  --------- 
                         106,018     87,854 
---------------------  ---------  --------- 
   4.             Exceptional items 

Exceptional items by type are as follows:

                               2021       2020 
                            GBP'000    GBP'000 
   Restructuring costs        1,036      1,288 
 Acquisition costs                -        104 
 Share issue costs                -         55 
 Covid-19 costs                   -        176 
 GMP equalisation costs         197          - 
                              1,233      1,623 
------------------------  ---------  --------- 
   5.             Finance costs 
                                               2021       2020 
                                            GBP'000    GBP'000 
   Interest paid                                361        561 
 Interest on lease liabilities                  192        179 
 Net interest expense on pension scheme          27          - 
                                                580        740 
----------------------------------------  ---------  --------- 



   6.             Dividends 

The Directors recommend that a final dividend for 2021 of 13.00p (2020: GBPnil) per ordinary share be paid. The final dividend will be paid, subject to shareholders' approval, on 26 May 2022, to shareholders on the register at the close of business on 22 April 2022. This dividend has not been included as a liability in these financial statements.

7. Reconciliation of earnings before interest, tax, depreciation and amortisation (EBITDA)

                                                    2021       2020 
                                                 GBP'000    GBP'000 
   Operating profit                                6,410        570 
 Add back: 
 Depreciation                                      3,585      3,671 
 Amortisation                                        698        848 
 Earnings before interest, tax, depreciation 
  and amortisation                                10,693      5,089 
---------------------------------------------  ---------  --------- 
   8.             Government grants 

Government grants were receivable as part of Government initiatives to provide financial support as a result of Covid-19 lockdowns. There are no future related costs in respect of these grants which are receivable solely as compensation for past expenses.

The Group received funding from the UK Government's 'Coronavirus Job Retention Scheme' and retail support grants, the US Government's 'Paycheck Protection Programme' and the Canadian Government's 'Emergency Wage Subsidy'. In total this support amounted to GBP316,000 (2020: GBP3,475,000) and is included as a credit within operating costs.

   9.            Post balance sheet events 

Subsequent to the year end, the Group agreed an extension to its existing GBP10,000,000 revolving credit facility until February 2025.

   10.          Availability of annual report and accounts 

The accounts for the year ended 31 December 2021 will be posted to shareholders on or before 1 April 2022 and laid before the Company at the Annual General Meeting on 19 May 2022. 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.

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(END) Dow Jones Newswires

March 17, 2022 03:00 ET (07:00 GMT)

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