TIDMPMP
RNS Number : 5191Z
Portmeirion Group PLC
15 September 2022
15 September 2022
PORTMEIRION GROUP PLC
('the Group')
Interim results for the six months ended 30 June 2022
Top and bottom line growth building on record 2021 sales year in
H1
Portmeirion Group PLC, the designer, manufacturer and worldwide
distributor of high quality homewares under the Portmeirion, Spode,
Royal Worcester, Pimpernel, Wax Lyrical and Nambé brands, is
pleased to announce its results for the six months ended 30 June
2022.
The Group experienced healthy trading in the first half with
year-on-year sales growth of 5% despite worsening consumer
sentiment due to the significant macro-economic headwinds. Sales
are now 30% above pre-pandemic 2019 levels as we continue to
successfully expand our customer base through developing online
channels, new product and new geographies.
Headlines
Financial
-- Record H1 Group revenue of GBP45.5 million, an increase of 5%
over the prior year (H1 2021: GBP43.1 million).
-- Group sales 30% ahead of pre-pandemic 2019 levels
demonstrating significant expansion in our customer base.
-- Headline profit before tax(1) grew by 30% to GBP2.0 million (H1 2021: GBP1.5 million).
-- H1 headline operating profit margin(1) increased from 4.0% to
4.3% as part of our long term ambition to achieve full year
operating margin of 13% (FY 2021: 7.2%).
-- Maintained strong online channel sales growth achieved during
the pandemic despite physical retail reopening. Total online
channel sales in our core UK and US sales markets now 55% (H1 2021:
53%). Own ecommerce sales declined by 16% as long term market
trends stabilise but remain 111% ahead of pre-pandemic 2019
levels.
-- Headline basic earnings per share(1) up to 12.00p per share (H1 2021: 9.12p).
-- Strong balance sheet maintained and significant headroom
within current borrowing facilities.
-- Interim dividends to be resumed with dividend of 3.50p per share (H1 2021: nil).
-- Expectation of sales to be at least in line with record sales
year in 2021, with profit also ahead of the prior year.
Operational
-- Productivity in Stoke-on-Trent ceramic factory up 5% as we
start to obtain the benefits from automation capex.
-- Long term energy hedge until Q1/2024 continues to insulate
the Group against ongoing volatility in energy prices.
-- Nambé brand (acquired in 2019) continues to grow, up 14% over
2021 as we successfully execute on acquisition integration.
-- Strategic focus on international markets yields ongoing,
encouraging growth from markets including South Korea, Canada and
China.
-- New product launches continue to represent more than 10% of
Group sales, including new collections to celebrate the 50(th)
anniversary of Portmeirion Botanic Garden.
-- Our Wax Lyrical factory achieved ISO9001:2015 accreditation,
demonstrating the high quality standards in our UK home fragrance
facility.
-- Post-period end, AromaWorks London brand and intellectual
property acquired in August 2022 to add scale and synergies to home
fragrance division operations.
(1) Headline profit before tax, headline operating profit margin
and headline basic earnings per share excludes exceptional items -
see note 3.
Mike Raybould, Chief Executive, commented:
"Whilst we are not immune to the significant macro headwinds
initiated by the war in Ukraine, our brands remain in strong demand
around the world, and we have seen encouraging year on year growth
continue through July and August. Off the back of a record revenue
year in 2021 our increasingly diversified sales markets and
continued execution of our strategy have enabled us to again grow
top line sales and bottom line profits in the first half, and we
expect to see sales at least in line with the record performance in
2021 and profit for the full year also ahead of the prior year.
Although the ongoing impact of input cost inflation and labour
market disruption is more significant than previously forecast we
still expect to grow operating margins in the short term in 2022
and see significant upside in the medium and long term as and when
macro-economic conditions normalise and the full value of our
brands and business transformation becomes clear. We have therefore
reintroduced our interim dividend which was postponed during the
Covid-19 pandemic.
We have a great pipeline of new product scheduled to launch over
the next 24 months, and have just launched new and much improved UK
and international ecommerce sites as part of our key online
strategy and continue to invest in and develop new customers in
rest of world sales markets. With the strength and longevity of our
portfolio of brands, there remains a significant opportunity to
expand our sales and customer base around the world over the coming
years."
This announcement contains inside information for the purposes
of the retained UK version of the EU Market Abuse Regulation (EU)
596/2014 ("UK MAR").
Enquiries:
Portmeirion Group PLC:
Mike Raybould, +44 (0) 1782 mraybould@portmeiriongroup.com
Chief Executive 743443
David Sproston, +44 (0) 1782 dsproston@portmeiriongroup.com
Group Finance Director 743443
Hudson Sandler:
Dan de Belder +44 (0) 207 796 ddebelder@hudsonsandler.com
Nick Moore 4133 nmoore@hudsonsandler.com
Panmure Gordon (UK) Limited:
(Nominated Adviser and +44 (0) 207 886
Broker) 2500
Freddy Crossley Corporate Finance
Rupert Dearden Corporate Broking
Singer Capital Markets:
+44 (0) 207 496
(Joint Broker) 3000
Peter Steel Investment Banking
Rachel Hayes
Interim Review
Trading
Following a record sales performance in 2021, we are pleased to
see further growth in H1 2022 despite the well-publicised
macro-economic factors driven by ongoing inflation and supply chain
disruption and the war in Ukraine, which have disrupted our markets
and created significant inflationary pressure on energy costs and
labour rates. We remain covered on our own energy prices until
Q1/2024 by the long term energy hedge put in place last year.
As retail markets have fully reopened we have maintained our
strong online channel sales growth achieved during the pandemic
despite physical retail reopening. In our core UK and US markets,
55% of sales went through all online channels (H1 2021: 53%).
We continued to benefit from our efforts to diversify across
international markets and saw strong growth in South Korea, Canada
and China.
We have continued to invest in and develop new products for our
customers and have seen a number of successful launches including a
range of collections to celebrate the 50(th) anniversary of
Portmeirion Botanic Garden.
Financial highlights
Revenue was GBP45.5 million for the first six months of the
year, an increase of 5% over the previous year (H1 2021: GBP43.1
million).
Our operating performance was encouraging; headline operating
profit(1) was GBP2.0 million which was significantly ahead of the
prior year (H1 2021: GBP1.7 million). This left the Group's
operating margin at 4.3% for the first half of the year (H1 2021:
4.0%).
Following the strong revenue and operating performance, headline
profit before tax(1) was GBP2.0 million (H1 2021: GBP1.5
million).
Headline basic earnings per share(1) was 12.00p per share (H1
2021: 9.12p).
(1) Headline profit before tax, headline operating profit and
headline earnings per share exclude exceptional items (see note
3).
Geographical and online performance
The Group's largest sales market, the US, accounted for 31% of
total Group revenue. Sales were 7% behind the first half of 2021,
largely due to retailers reducing stock levels following Covid-19
supply chain disruption and fears of a slowdown in consumer
spending. Retailer sales to the end consumer have remained robust,
and we believe our diversified range of products and sizeable
online penetration will result in an improved trading performance
in the US market in the second half of the year.
Our second largest market is the UK, which accounted for 25% of
total Group sales. Sales were down 13% on the prior year due to a
challenging retail environment, particularly due to the impact on
disposable income from large inflationary pressures including
significant increases in energy prices.
In South Korea, sales grew by 38% as our strategy of
stabilisation and diversification of products continued to provide
a robust platform for growth. We have continued to introduce new
ranges in this market which have performed well and we expect
further growth in 2023 with increased penetration of new
products.
In our rest of world markets, sales were up 28% over the same
period in 2021 as various restrictions around the world ended and
economies started to recover from the pandemic. In particular we
saw a strong sales rebound in Canada, where sales grew 73% and
China and the Far East, with sales up 100% as we deepen our
relationship with our new distributor. Sales in most of our other
international markets were at least in line with 2021 levels.
Our own ecommerce sales decreased by 16% in the first half of
2022 as physical retail stores reopened, but remain significantly
ahead of pre-pandemic 2019 levels (+111%). Total online sales in
our core UK/US markets now account for 55% of sales made in those
markets (2021: 53%).
Profit
In the first half of 2022, the Group made a headline profit
before tax(1) of GBP2.0 million; this compared to a profit before
tax of GBP1.5 million in 2021.
Given the macro-economic events in our main sales markets, it is
pleasing to continue to deliver sales and profit growth which is
testament to the strength of the Group's brands.
(1) Headline profit before tax exclude exceptional items (see
note 3).
Dividend
The Board is committed to a dividend policy which ensures we
retain and invest enough capital in our business to drive long-term
growth in our brands and maintain a prudent and sustainable level
of dividend cover.
Due to the Group's ability to grow in such a challenging trading
environment, and our medium term expectations for profit and cash
generation, the Board is declaring an interim dividend of 3.50p per
share (2021: nil). The interim dividend will be paid on 21 October
2022. The ex-dividend date will be 22 September 2022 with a record
date of 23 September 2022.
The cover for dividends paid and proposed for 2021 was 3.0
times. We remain of a view that a dividend cover level of
approximately 3.0 times is in the long-term interest of the Group
and shareholders.
Balance sheet
The Group ended the first half of 2022 with net debt of GBP6.8
million at 30 June 2022; this compares to net cash of GBP0.1
million at 30 June 2021 and net cash of GBP0.7 million at 31
December 2021. In addition to the cash balance of GBP3.2 million
and bank borrowings of GBP10.0 million, the Group also has
unutilised committed bank facilities of GBP18.4 million.
Our stock balance at 30 June 2022 was GBP42.6 million compared
to GBP29.3 million at 30 June 2021 and GBP29.2 million at 31
December 2021. Approximately one third of the inventory increase is
driven by cost price inflation, freight rates and the movement in
GBP/USD exchange rate which is used to revalue inventory held in
our US division. The remaining increase is driven by forward
purchasing of US inventory to avoid third quarter supply chain
disruption, which we expect to be timing only and therefore
inventory levels will reduce to more normalised levels by the end
of the year.
We carry significant goodwill and intangible asset values on our
balance sheet of some GBP16.2 million. These balances largely
relate to the acquisitions of Wax Lyrical and Nambé and the
carrying value of goodwill is reviewed annually. The intangible
assets are amortised over a range of ten and twenty years depending
on their nature.
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.
The Group continues to drive forward our ESG agenda and assess
the materiality of our impacts and make tangible progress towards a
more sustainable world. We expect to provide a detailed update to
investors in Q4 2022 regarding the scope of this work and a
targeted, deliverable strategy.
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
the Section 172(1) Statement on Stakeholder Engagement, Our
Commitment to ESG and Corporate Governance Statements in our Annual
Report and Accounts.
Strategic areas of focus
Our homeware brands have a combined history of more than 750
years and are much loved around the world.
Our strategy is to drive sustainable long-term sales growth
together whilst increasing operating margins to 13%.
We see a significant opportunity to expand our customer base by
taking share in existing and new markets through:
1. increasing sales through online channels including our own ecommerce sites;
2. developing rest of world sales markets and new geographies;
3. using new product development to expand share in existing new product categories; and
4. leveraging our brands more effectively by cross selling across customer and sales markets.
We are targeting returning operating margins to historical
levels in the medium term and to 13% (2021: 7.2%) over the next
five years. We believe growth in operating margins will be
delivered by:
1. improved mix as we increase sales through our own ecommerce sites;
2. productivity gains in our two UK factories from capital investments in automation;
3. leveraging our portfolio of brands more effectively by
driving higher sales against our fixed cost base; and
4. increasing the scale and profitability of our home fragrance division, Wax Lyrical.
Accelerate our online transformation
As online sales markets have reverted to their longer term
growth trajectory following the reopening of physical retail stores
around the world, we are pleased to hold on to the gains we made in
online channels over the past 24 months. Total online channel sales
in our core UK and US markets were 55% (2021: 53%).
Although sales from our own ecommerce sites reduced by 16%
versus 2021, they remain up 111% on pre-Covid 2019 levels.
Following a period of stabilisation in 2022 we expect our ecommerce
site sales to resume growth in 2023.
We have increased the depth and expertise of our digital
marketing and online sales teams over the past two years and
continue to deploy investments behind front end systems and direct
to consumer warehouse capacity. Following the launch of new US
market ecommerce sites in Q4 2020, we have built and launched our
new UK ecommerce sites in August 2022 that will enable a much
richer brand experience for our customers, improved conversion
levels particularly for mobile traffic and enable improved
cross-selling.
Rest of world expansion
The Group sells into more than 70 countries around the world,
with more than 85% of these sales made in our three key markets of
the US, UK and South Korea. We see a great opportunity to establish
our brands and grow in other markets around the world. We will do
this through taking on new distributor relationships and are
particularly focused on Asia, Middle East and Europe.
Rest of world market sales grew by 28% over 2021 levels (from
GBP5.0 million to GBP6.4 million) and by 78% from 2019. Our
Canadian sales operation continued to prosper with sales growth of
73% over H1 2021 with strong online channel market growth. We have
continued to build with our new Chinese distributor, signed up in
2021, with growth in H1 2022 of 100%.
Our ambition is to double the annual revenue stream from rest of
world markets within the next five years.
New product development
Developing and launching new product is a key driver of sales
growth and our ambition is to increase market share through new
product development.
We have continued to see an improved contribution with new
product launches contributing over 10% of sales in H1 2022.
We have a strong pipeline of product launches for the next 12
months. Our product roadmaps are built around:
- maintaining and building out our key heritage ranges including
Portmeirion Botanic Garden, Spode Christmas Tree and Spode Blue
Italian; and
- growing share in a younger age demographic through more contemporary product launches.
A list of our current ranges can be found at
www.portmeirion.co.uk, www.spode.co.uk , www.waxlyrical.com and
www.portmeirion.co.uk/int/. Customers in the United States should
go to www.portmeirion.com and www.nambe.com. Our Canadian website
operates under www.haustopia.com.
Growing our operating margins
Our roadmap to increase automation in our Stoke-on-Trent ceramic
factory continues at pace. Productivity (output per labour hour)
increased by 5% as recent capital investments came into effect.
Further projects are underway for launch in 2023 that together with
completed projects will contribute to further improvements in
efficiency.
We are on track to launch our new warehouse system and order
integration in our US warehouses in early 2023 that will drive both
cost and sales order synergies.
Corporate governance
The Board is committed to good governance and we have continued
to apply the Quoted Companies Alliance ("QCA") Corporate Governance
Code, complying with its principles throughout the period. To see
how the Group addresses the key governance principles defined in
the QCA Code please refer to our website at
www.portmeiriongroup.com/investors.
The Board keeps its composition and performance under review to
ensure that we have the appropriate skills and experience in place
to deliver our strategy.
In July 2022, Jacqui Gale, our Chief Commercial Officer, stepped
down from the Board and left the Group in September 2022. At the
same time, the Group was pleased to announce that Bill Robedee,
previously on the Board as the President of our North America
division, assumed the role of Global Sales Director.
Strategic acquisitions
The Group remains committed to acquiring businesses where the
combination would be earnings enhancing and support our long term
strategy.
On 12 August 2022, we announced the acquisition of the
AromaWorks London brand, intellectual property and certain stock,
trade and assets for a total consideration of GBP0.44 million.
AromaWorks London manufactures a range of home fragrance products
using essential oils in the health and wellbeing category with a
retailer customer base in the UK and US. This acquisition will add
further scale to our existing home fragrance business, Wax Lyrical,
and we expect to deliver cost synergies and cross-selling
opportunities within the first twelve months.
Outlook
We are pleased to record continued sales and profit growth in
the first half of the financial year building on the back of our
record Group sales last year and for the remainder of the year we
expect to continue towards another year of growth across the
business. This has been despite the significant worsening in
consumer sentiment due to the impact of the Ukraine war on energy
prices and general cost of living. Our business benefits from
increasing sales market diversification and we believe our strategy
of developing new geographies, developing online channels and
launching compelling new product will enable us to continue to grow
market share.
We are cognisant of ongoing and significant input cost price
inflation together with challenges of retention and absence levels
in labour markets. We have successfully mitigated these in the
first half with sales price rises and productivity gains in our
factories, allowing us to report continued improvement in operating
margins. However, it is clear that, at least in the very short
term, these factors will limit the level of operating margin growth
we can deliver.
We are pleased to see early signs that in the US, our largest
sales market, consumer sentiment is improving and our order books
for our key 2022 Christmas trading period in the US are strong and
bolstered by range extensions. We also expect to continue to grow
in rest of world markets in the second half as we leverage our
portfolio of brands more effectively. Our UK sales market is
difficult to forecast due to the ongoing impact of cost of living
rises and the October energy price cap changes. The UK is 31% of
annual Group sales and we remain cautious in this market and expect
sales to remain lower in the second half of 2022.
Despite this, we remain confident in our medium and long term
aspirations to grow our sales and operating margins. We have made
huge progress in strengthening our business over the last two years
and our brands have shown their resilience to the macro backdrop
with continued growth. For 2022, we expect sales to be at least in
line with a record sales year in 2021, with pre-tax profit also
ahead of 2021 and operating margin growth of at least 10% on
2021.
The Group benefits from global brands and products with timeless
design. We have strong market positions around the world and over
750 years of combined history. We have made and continue to make
significant improvements to our business and are committed to our
long term sales growth strategy and driving our operating margins
by improving efficiencies in everything we do.
Dick Steele Mike Raybould
Non-executive Chairman Chief Executive
Consolidated Income Statement
Unaudited
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
Notes GBP'000 GBP'000 GBP'000
Revenue 2 45,467 43,136 106,018
Operating costs (43,510) (41,415) (98,375)
-------------------------------------- ------ ------------ ------------ -------------
Headline operating profit(1) 1,957 1,721 7,643
Exceptional items 3
- restructuring costs (1,006) (378) (1,036)
- GMP equalisation costs - - (197)
-------------------------------------- ------ ------------ ------------ -------------
Operating profit 951 1,343 6,410
Interest income - 2 12
Finance costs 4 (212) (299) (580)
Other income 265 - -
Profit on sale of fixed assets - 120 120
Headline profit before tax(1) 2,010 1,544 7,195
Exceptional items 3
- restructuring costs (1,006) (378) (1,036)
- GMP equalisation costs - - (197)
-------------------------------------- ------ ------------ ------------ -------------
Profit before tax 1,004 1,166 5,962
Tax 5 (218) (233) (2,721)
-------------------------------------- ------ ------------ ------------ -------------
Profit for the period attributable
to equity holders 786 933 3,241
-------------------------------------- ------
Earnings per share 7
Basic 5.72p 6.79p 23.58p
Diluted 5.70p 6.77p 23.49p
Headline earnings per share(1) 7
Basic 12.00p 9.12p 38.85p
Diluted 11.97p 9.09p 38.71p
Dividends paid and proposed per
share 6 3.50p 0.00p 13.00p
-------------------------------------- ------ ------------ ------------ -------------
All the above figures relate to continuing operations.
(1) Headline operating profit is statutory operating profit of
GBP1,957,000 (H1 2021: GBP1,721,000) before exceptional items of
GBP1,006,000 (H1 2021: GBP378,000). Headline profit before tax is
statutory profit before tax of GBP2,010,000 (H1 2021:
GBP1,544,000), after adding back the exceptional items.
Consolidated Statement of Comprehensive Income
Unaudited
Six months
to 30 Six months Year to
June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Profit for the period 786 933 3,241
--------------------------------------------- ----------- ------------- --------------
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of net defined benefit
pension scheme asset/(liability) - 3,000 2,505
Deferred tax relating to items that will
not be reclassified subsequently to profit
or loss - (750) 267
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations 2,082 (304) 64
Deferred tax relating to items that may
be reclassified subsequently to profit
or loss - - 45
--------------------------------------------- ----------- ------------- --------------
Other comprehensive income for the period 2,082 1,946 2,881
--------------------------------------------- ----------- ------------- --------------
Total comprehensive income for the period
attributable to equity holders 2,868 2,879 6,122
--------------------------------------------- ----------- ------------- --------------
Consolidated Balance Sheet
Unaudited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 8,978 8,978 8,978
Intangible assets 7,176 6,769 7,126
Property, plant and equipment 16,326 13,212 14,398
Right-of-use assets 6,366 6,328 6,409
Pension scheme surplus 1,360 1,152 910
Deferred tax asset - 80 -
Total non-current assets 40,206 36,519 37,821
-------------------------------- ----------- ----------- --------------
Current assets
Inventories 42,597 29,259 29,224
Trade and other receivables 13,998 12,329 19,243
Current income tax asset 649 895 662
Cash and cash equivalents 3,189 9,043 7,616
Total current assets 60,433 51,526 56,745
-------------------------------- ----------- ----------- --------------
Total assets 100,639 88,045 94,566
-------------------------------- ----------- ----------- --------------
Current liabilities
Trade and other payables (18,188) (12,032) (16,245)
Borrowings (6,044) (2,979) (1,986)
Lease liabilities (1,842) (1,595) (1,695)
Total current liabilities (26,074) (16,606) (19,926)
-------------------------------- ----------- ----------- --------------
Non-current liabilities
Deferred tax liability (2,562) (1,774) (2,609)
Borrowings (3,977) (5,959) (4,965)
Lease liabilities (4,967) (5,058) (5,119)
Total non-current liabilities (11,506) (12,791) (12,693)
-------------------------------- ----------- ----------- --------------
Total liabilities (37,580) (29,397) (32,619)
-------------------------------- ----------- ----------- --------------
Net assets 63,059 58,648 61,947
-------------------------------- ----------- ----------- --------------
Equity
Called up share capital 710 710 710
Share premium account 18,344 18,344 18,344
Investment in own shares (3,124) (3,124) (3,124)
Share-based payment reserve 160 212 128
Translation reserve 3,268 773 1,186
Retained earnings 43,701 41,733 44,703
-------------------------------- ----------- ----------- --------------
Total equity 63,059 58,648 61,947
-------------------------------- ----------- ----------- --------------
Consolidated Statement of Changes in Equity
Unaudited
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
2021 710 18,344 (3,140) 152 1,077 38,566 55,709
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Profit for the
period - - - - - 933 933
Other comprehensive
income for the
period - - - - (304) 2,250 1,946
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
period - - - - (304) 3,183 2,879
Increase in
share-based
payment reserve - - - 60 - - 60
Shares issued
under employee
share schemes - - 16 - - (16) -
At 30 June
2021 710 18,344 (3,124) 212 773 41,733 58,648
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Profit for the
period - - - - - 2,308 2,308
Other comprehensive
income for the
period - - - - 413 522 935
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
period - - - - 413 2,830 3,243
Increase in
share-based
payment reserve - - - 4 - - 4
Transfer on
exercise or
lapse of options - - - (88) - 88 -
Deferred tax
on share-based
payment - - - - - 52 52
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
At 31 December
2021 710 18,344 (3,124) 128 1,186 44,703 61,947
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Profit for the
period - - - - - 786 786
Other comprehensive
income for the
period - - - - 2,082 - 2,082
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
period - - - - 2,082 786 2,868
Increase in
share-based
payment reserve - - - 32 - - 32
Dividends paid - - - - - (1,788) (1,788)
At 30 June
2022 710 18,344 (3,124) 160 3,268 43,701 63,059
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Consolidated Statement of Cash Flows
Unaudited
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Operating profit 951 1,343 6,410
Adjustments for :
Depreciation of property, plant and equipment 895 773 1,652
Depreciation of right-of-use assets 1,008 914 1,933
Amortisation of intangible assets 408 403 698
Charge for share-based payments 32 60 64
Charge for GMP equalisation - - 197
Exchange (loss)/gain (193) (157) 36
Other income 265 - -
Loss on disposal of intangible fixed assets 264 - -
Loss on disposal of tangible fixed assets 5 - 17
----------------------------------------------- ------------ ------------- -------------
Operating cash flows before movements
in working capital 3,635 3,336 11,007
----------------------------------------------- ------------ ------------- -------------
Increase in inventories (11,388) (2,096) (2,071)
Decrease/(increase) in receivables 6,100 2,864 (3,960)
Increase/(decrease) in payables 754 (465) 3,707
----------------------------------------------- ------------ ------------- -------------
Cash (used by)/generated from operations (899) 3,639 8,683
----------------------------------------------- ------------ ------------- -------------
Contributions to defined benefit pension
scheme (450) (900) (1,350)
Interest paid (114) (240) (368)
Income taxes paid (179) (208) (461)
----------------------------------------------- ------------ ------------- -------------
Net cash (outflow)/inflow from operating
activities (1,642) 2,291 6,504
----------------------------------------------- ------------ ------------- -------------
Investing activities
Interest received - 2 12
Proceeds on disposal of property, plant
and equipment - 775 786
Purchase of property, plant and equipment (2,663) (2,465) (4,511)
Purchase of intangible assets (491) (228) (843)
Net cash outflow from investing activities (3,154) (1,916) (4,556)
----------------------------------------------- ------------ ------------- -------------
Financing activities
Dividends paid (1,788) - -
New bank loans raised 4,060 - -
Principal elements of lease payments (1,057) (897) (1,927)
Repayments of borrowings (1,000) (2,000) (4,000)
----------------------------------------------- ------------ ------------- -------------
Net cash inflow/(outflow) from financing
activities 215 (2,897) (5,927)
----------------------------------------------- ------------ ------------- -------------
Net decrease in cash and cash equivalents (4,581) (2,522) (3,979)
Cash and cash equivalents at beginning of
period 7,616 11,590 11,590
Effect of foreign exchange rate changes 154 (25) 5
-------------------------------------------- -------- -------- --------
Cash and cash equivalents at end of period 3,189 9,043 7,616
-------------------------------------------- -------- -------- --------
Notes to the Interim Financial Information
1. Basis of preparation
The financial information included in the interim results
announcement for the six months to 30 June 2022 was approved by the
Board on 14 September 2022.
The interim financial information for the six months to 30 June
2022 has not been audited or reviewed and does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The Company's statutory accounts for the year
ended 31 December 2021, prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006.
The interim financial information has been prepared in
accordance with IFRS on the historical cost basis, except that some
derivative financial instruments are stated at their fair value.
The same accounting policies, presentation and methods of
computation are followed in the interim financial statements as
were applied in the Group's last audited financial statements for
the year ended 31 December 2021.
Statutory accounts for the year ended 31 December 2021 have been
delivered to the Registrar of Companies.
Going concern
The Directors, having made suitable enquiries and analysis of
the accounts, consider that the Group has adequate resources to
continue in business for the foreseeable future. In making this
assessment, the Directors have considered the Group's revised
trading conditions following the impact of the Covid-19 pandemic,
Ukraine war, cash flow forecasts, and available banking facility
with appropriate headroom in facilities and financial
covenants.
Details of the Covid-19 pandemic and Ukraine war impact on the
Group and its going concern assessment are included in the Group's
statutory financial statements for the year ended 31 December 2021.
The Group continues to trade in line with the revised trading
conditions and the Directors continue to carefully monitor the
impact of the Covid-19 pandemic and Ukraine war on the operations
of the Group.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those detailed on page 80 of the
Group's 2021 Financial Statements.
Government grants
In prior periods, the Group received funding from various
Governments in relation to Covid-19. Government income was
recognised in profit or loss (as a deduction in the related
expense) on a systematic basis over the periods in which the Group
recognises expenses for the related costs for which the grants are
intended to compensate (see note 10).
Notes to the Interim Financial Information
Continued
2. 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:
Six months Six months Year to
to 30 June to 30 June 31 December
Operating segment 2022 2021 2021
GBP'000 GBP'000 GBP'000
UK 27,567 26,480 59,686
North America 17,900 16,656 46,332
45,467 43,136 106,018
--------------------- ------------ ------------ -------------
Six months Six months Year to
to 30 June to 30 June 31 December
Geographical market 2022 2021 2021
GBP'000 GBP'000 GBP'000
United Kingdom 11,531 13,264 32,871
United States 14,084 15,126 42,492
South Korea 13,443 9,724 18,680
Rest of the World 6,409 5,022 11,975
----------------------- ------------ ------------ -------------
45,467 43,136 106,018
----------------------- ------------ ------------ -------------
3. Exceptional items
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Restructuring costs 1,006 378 1,036
GMP equalisation costs - - 197
------------------------ ------------ ------------ -------------
1,006 378 1,233
------------------------ ------------ ------------ -------------
Exceptional costs relate to a restructuring exercise undertaken
within the Group. All of these costs are exceptional in nature and
non-recurring.
4. Finance costs
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Interest paid 121 190 361
Interest on lease liabilities 91 92 192
Net interest expense on pension
scheme - 17 27
--------------------------------- ------------ ------------ -------------
212 299 580
--------------------------------- ------------ ------------ -------------
Notes to the Interim Financial Information
Continued
5. Taxation
Tax for the interim period is charged at 22% (year to 31
December 2021: 20%) representing the best estimate of the weighted
average annual corporation tax rate expected for the full year.
In the Finance Bill 2021, the Government announced that from 1
April 2023 the corporation tax rate would increase from 19% to 25%.
The Finance Bill 2021 had its third reading on 24 May 2021 and is
now considered substantively enacted. As a consequence, deferred
tax assets/liabilities have been measured at the rate they are
expected to reverse.
6. Dividend
An interim dividend of 3.50p (2021: 0.00p) per ordinary share
will be paid on 21 October 2022 to shareholders on the register on
23 September 2022. During the period a final dividend of 13.00p per
ordinary share was paid in respect of the previous financial
year.
7. Earnings per share
Six months
to 30 Six months Year to
June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Earnings
Earnings for the purpose of basic
and diluted earnings per share, being
profit for the period attributable
to equity holders 786 933 3,241
---------------------------------------- ----------- ------------ -------------
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Number of shares
Weighted average number of shares
for the purpose of basic earnings
per share 13,750,919 13,743,924 13,747,450
Weighted average dilutive effect
of conditional share awards 33,507 42,784 49,235
-------------------------------------- ------------- ------------- -------------
Weighted average number of shares
for the purpose of diluted earnings
per share 13,784,426 13,786,708 13,796,685
-------------------------------------- ------------- ------------- -------------
The calculation of basic and diluted headline earnings per share
is based on the following data:
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Profit for the period attributable
to equity holders 786 933 3,241
Add back/(deduct):
Exceptional items 1,006 378 1,233
Tax effect of exceptional items (142) (58) (223)
Exceptional impact of remeasuring
deferred tax balances from 19% to
25% - - 1,090
------------------------------------ ------------ ------------ -------------
Headline earnings 1,650 1,253 5,341
------------------------------------ ------------ ------------ -------------
Notes to the Interim Financial Information
Continued
8. Reconciliation of earnings before interest, tax, depreciation
and amortisation (EBITDA)
Six months Six months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Operating profit 951 1,343 6,410
Add back:
Depreciation 1,903 1,687 3,585
Amortisation 408 403 698
Earnings before interest, tax, depreciation
and amortisation 3,262 3,433 10,693
--------------------------------------------- ------------ ------------ -------------
9. Retirement benefit schemes
Defined benefit scheme
The defined benefit obligation as at 30 June 2022 is calculated
on a year-to-date basis, using the latest actuarial valuation as at
31 December 2021 adjusted for payments to the scheme in line with
the Schedule of Contributions.
There have been no significant market fluctuations and
significant one-off events, such as plan amendments, curtailments
and settlements that have resulted in an adjustment to the
actuarially determined pension cost since the end of the prior
financial year.
10. Government grants
Government grants were receivable as part of Government
initiatives to provide immediate financial support as a result of
the effects of the Covid-19 shutdown. There are no future related
costs in respect of these grants which are receivables solely as
compensation for past expenses.
The Group has previously 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 GBPnil (2021: GBP312,000).
11. Related party transactions
The Group's related parties are as disclosed in the Report and
Accounts for the year ended 31 December 2021. There were no
material differences in related parties or related party
transactions in the six months ended 30 June 2022 except for
transactions with key management personnel.
The most significant of these was on 25 April 2022, under The
Portmeirion 2012 Approved and Unapproved Share Option Plans, when
40,000, 25,000, 25,000, 25,000, 25,000 and 11,000 share option
awards were granted to M Raybould, M Knapper, D Sproston, J Gale, W
Robedee and M Macdonald respectively at an option price of GBP5.70
per share when the market price was GBP5.70 per share.
In addition, on 25 April 2022, under The Portmeirion Group 2018
Deferred Incentive Share Option Plan, 10,813, 5,506, 4,279, 5,706
and 7,051 share option awards were granted to M Raybould, M
Knapper, D Sproston, J Gale and W Robedee respectively at a total
exercise price of GBP1 per individual when the market price was
GBP5.70 per share.
12. Post balance sheet events
On 12 August 2022, the Group acquired the AromaWorks London
brand, intellectual property and certain stock, trade and assets
for a total consideration of GBP0.44 million. AromaWorks
manufactures a range of home fragrance products using essential
oils in the health and wellbeing category with a retailer customer
base in the UK and US.
13. Availability of document
A copy of the interim results will shortly be available on the
Company website at 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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BKQBBDBKBCCD
(END) Dow Jones Newswires
September 15, 2022 02:00 ET (06:00 GMT)
Portmeirion (LSE:PMP)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Portmeirion (LSE:PMP)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024