TIDMPMP
RNS Number : 3810M
Portmeirion Group PLC
14 September 2023
14 September 2023
PORTMEIRION GROUP PLC
('the Group')
Interim results for the six months ended 30 June 2023
H1 results reflect previously stated US retailer destocking
H2 started in line with expectations with a strong Christmas
order book
Portmeirion Group PLC, the owner, designer, manufacturer and
omni-channel retailer of leading homeware brands in global markets,
is pleased to announce its results for the six months ended 30 June
2023.
Financial summary
H1 2023 H1 2022 FY 2022
GBPm GBPm GBPm
Revenue 44.1 45.5 110.8
-------- -------- --------
Headline profit before tax(1) 0.0 2.0 8.0
-------- -------- --------
(Loss)/profit before tax (0.1) 1.0 7.0
-------- -------- --------
Headline EBITDA(1) 2.8 4.3 13.2
-------- -------- --------
EBITDA 2.7 3.3 12.1
-------- -------- --------
Headline basic (loss) / earnings
per share(1) (0.12p) 12.00p 46.59p
-------- -------- --------
Basic (loss) / earnings per share (0.82p) 5.72p 40.39p
-------- -------- --------
Dividends proposed and paid per share
in respect of the period 3.50p 3.50p 15.50p
-------- -------- --------
Financial
-- H1 Group revenue of GBP44.1 million, a decrease of 3% compared
to the record prior year sales (H1 2022: GBP45.5 million);
as previously stated this is reflective of increased caution
on ordering from US customers, in particular the destocking
by retailer customers.
-- Headline profit before tax(1) was GBP0.0 million (H1 2022:
GBP2.0 million).
-- H1 headline operating profit margin(1) of 1.6% was impacted
by the fall in revenue (H1 2022: 4.3%) and gross margin reduction.
-- H1 gross margin impacted by peak inflation in stock due to
container freight rates which are expected to subside through
H2 2023 and 2024.
-- Solid growth in the UK, South Korea and rest of world markets.
-- Headline basic loss per share(1) of 0.12p (H1 2022: earnings
per share of 12.00p).
-- Interim dividend declared of 3.50p per share (H1 2022: 3.50p).
-- Strong balance sheet maintained with like-for-like inventory
reduction of 5% since FY 2022 and further reduction expected
in H2 2023.
-- Net debt is GBP15.0 million but we expect this to reduce below
FY 2022 levels (FY 2022: GBP10.1 million) by year end as working
capital unwinds and we maintain significant headroom within
current borrowing facilities.
(1) Headline profit before tax, headline EBITDA, headline
operating margin and headline basic earnings per share excludes
exceptional items - see note 3.
Operational summary
-- Improved productivity in Stoke-on-Trent ceramic factory maintained
through ongoing automation programme.
-- Spode brand continues to grow, with further benefit expected
in H2 from new collaboration with Kit Kemp Design Studio and
further new product development in Spode Christmas Tree range.
-- Rest of world ceramic sales continue to grow, diversification
being a key part of our long term growth strategy, with further
growth expected in H2.
-- Home fragrance division benefits from adding AromaWorks London
brand with sales growth and factory now operating at a more
efficient level. We expect growth and improved profitability
in H2.
-- Launch of new sustainability strategy 'Crafting a Better Future'
demonstrates the Group's commitment to becoming a more sustainable
business. In H1 we were pleased to reduce gas and electricity
usage by 6% compared to the prior year.
Current Trading & Outlook
-- H2 has started in line with our expectations and we have a
strong Christmas order book, which is ahead of the same period
last year.
-- We expect FY sales and profit to be in line with consensus
market expectations which were revised in July as a result
of North American retailer destocking.
-- We remain committed to our long term ambition of rebuilding
operating margins.
Mike Raybould, Chief Executive , commented :
"As previously indicated, the Group has seen reduced order flow
in H1 2023 across our North American market. This has been
particularly noticeable amongst retail customers reducing stock
levels. However we are confident that in the past few years we have
made lasting market share gains in the US and have further
incremental product listings agreed across key US department store
chains for H2 2023. Together with new product launches we therefore
expect that sales in our US and Canadian markets will stabilise and
return to growth in due course.
We are successfully controlling overheads despite the
significant inflationary environment and will continue to target
further global synergies in our cost base over the next 12 months.
Alongside ongoing improved factory productivity in our Stoke site
and as global container shipping rates return to historical levels,
we remain confident of delivering our medium and long term
operating margin growth targets.
We have made great strides on both operational and commercial
fronts in the last few years and our brands continue to resonate
well with consumers around the world."
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 portmeirion@hudsonsandler.com
4133
Nick Moore
Emily Brooker
Shore Capital:
(Nominated Adviser and Joint +44 (0) 207 408
Broker): 4090
Patrick Castle Corporate Advisory
Lucy Bowden Corporate Broking
Malachy McEntyre
Singer Capital Markets +44 (0) 207
(Joint Broker): 496 3000
Peter Steel Investment Banking
Asha Chotai
NOTES TO EDITOR:
Portmeirion Group PLC is a leading, omni-channel British
ceramics manufacturer and retailer of leading homeware brands.
Based in Stoke-on-Trent, United Kingdom, the Group owns six
unrivalled heritage and contemporary brands, with 750+ years of
collective heritage; Portmeirion, Spode, Royal Worcester,
Pimpernel, Wax Lyrical and Nambé.
The Group serves markets across the world, with global demand
driven by diversified international markets including the key
geographies of the US, UK and South Korea.
Portmeirion Group has a proven capital-light, well developed and
self-funded growth strategy focused on building a wider customer
base and growing the sales footprint of its brands, through:
-- Building and growing international sales markets
-- Developing online sales channels in core markets
-- Designing and launching new product to widen appeal and take market share
-- Leveraging brands and extensive product ranges
Interim Review
Financial highlights
Revenue was GBP44.1 million for the first six months of the
year, a decrease of 3% over the record prior year sales (H1 2022:
GBP45.5 million).
Our operating performance was negatively impacted by the sales
reduction; headline operating profit(1) was GBP0.7 million (H1
2022: GBP2.0 million). This left the Group's operating margin at
1.6% for the first half of the year (H1 2022: 4.3%).
Due to the reduced operating margin performance and increased
interest costs, headline profit before tax(1) was GBPnil (H1 2022:
GBP2.0 million).
Headline basic loss per share(1) was 0.12p (H1 2022: earnings
per share of 12.00p).
(1) Headline profit before tax, headline operating profit and
headline earnings per share excludes exceptional items (see note
3).
Operational overview
The Group's largest sales market, North America (the US and
Canada), accounted for 33% of total Group revenue. Sales were 13%
behind the first half of 2022 at GBP14.4 million (H1 2022: GBP16.7
million) as major retailers undertook aggressive destocking ahead
of anticipated fears of a slowdown in consumer spending. Where we
have retailer sales out data to the end consumer, this evidences
that demand remains robust and we therefore believe our diversified
range of products and sizeable online penetration will result in an
improved trading performance once this destocking exercise is
complete.
Our second largest market is the UK, which accounted for 27% of
total Group sales. Sales were slightly ahead of prior year at
GBP11.7 million (H1 2022: GBP11.5 million) as we benefitted from
additional sales from the AromaWorks London brand that the Group
acquired in August 2022. We are closely monitoring the impact of
inflationary pressures on consumer spending but currently this
market is performing in line with our expectations.
In South Korea, our third largest market accounting for 32% of
total Group revenue, sales grew by 7% to GBP14.3 million (H1 2022:
GBP13.4 million) as we continued our strategy of increasing online
exposure of our brands and diversifying our ranges. We have
introduced new ranges in this market but expect both the increasing
impact of inflation and currency movement to impact consumer
sentiment in the short term.
In our rest of world markets, sales were down 4% over the same
period in 2022 at GBP3.7 million (H1 2022: GBP3.8 million). The
prior year included some Q1 sales to Russia/Eastern Europe and some
loss-making home fragrance contracts which we have since
discontinued; excluding these, underlying ceramic sales were 10%
ahead of the prior year as part of our long-term strategy.
We continue to invest in new products for our customers around
the world, and are pleased with the initial performance of a number
of new ranges including the new Spode collaboration with the Kit
Kemp Design Studio.
Balance sheet
The Group ended the first half of 2023 with net debt of GBP15.0
million at 30 June 2023; this compares to net debt of GBP6.8
million at 30 June 2022 and net debt of GBP10.1 million at 31
December 2022. In addition to the cash balance of GBP1.5 million
and bank borrowings of GBP16.4 million, the Group also has
unutilised bank facilities of GBP10.1 million. The increase in net
debt since 30 June 2022 is largely driven by working capital
movements, with higher receivables due to customer mix and lower
payables due to reduced inventory purchasing. We expect both of
these movements to unwind in H2.
Our stock balance at 30 June 2023 was GBP42.1 million compared
to GBP42.6 million at 30 June 2022 and GBP41.1 million at 31
December 2022. Excluding the impact of AromaWorks London inventory
(brand acquired in August 2022) and seasonal shipping timing, we
have reduced inventory from both June 2022 and December 2022 on a
like-for-like basis by 5%. We have a number of initiatives in the
second half of 2023 which should see further reductions in
inventory and an improved net debt position by 31 December 2023
compared to the prior year end.
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.
Despite the short term challenges in the Group's trading
performance, we expect to generate cash in the current financial
year and with our medium term expectations for profit and cash
generation, the Board is declaring an interim dividend of 3.50p per
share (2022: 3.50p). The interim dividend will be paid on 15
December 2023. The ex-dividend date will be 16 November 2023 with a
record date of 17 November 2023.
The cover for dividends paid and proposed for 2022 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.
Environmental, Social and Governance (ESG)
In May 2023, the Group launched a new sustainability strategy
and roadmap entitled 'Crafting a Better Future' which outlines the
Group's commitment to becoming a more sustainable business. The
launch represents the next level of ambition for the Group - to
ensure that we continue to reduce our impact on the environment and
support our colleagues and communities.
We continue to drive our progress on reducing our energy
consumption and in H1 reduced gas and electricity usage by 6%
compared to the prior year.
Further details on our ESG commitments and integration within
the Group can be found on our website, www.portmeiriongroup.com,
and in the Section 172(1) statement - Engaging with key
stakeholders, Our commitment to ESG and the Corporate Governance
Statements in our Annual Report and Accounts.
Corporate governance
The Group is a committed member of the Quoted Companies Alliance
("QCA") and has chosen to apply the QCA Corporate Governance Code,
complying with its principles throughout the period. Further
details can be found on 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 June 2023, the Group announced that
Jeremy Wilson had been appointed as a Non-executive Director.
Group Strategy
Our homeware brands have a combined history of more than 750
years and are much loved around the world.
We remain focused on our strategic goal of growing the sales
footprint of the business over the next 3-5 years. We plan to do
that by continuing to develop our key heritage ranges through
product extensions and developing new sales channels to reach new
customers, whilst at the same time increasing our market share in
contemporary and giftware homewares through launching beautifully
designed new products and leveraging these new ranges across our
existing global sales infrastructure.
Our strategy remains to return operating margins back to
historical levels with a medium-term target of reaching 10%.
Further detail on executing our growth strategy
1. Geography - building and growing sales markets outside of our
three core markets of North America, UK and South Korea
Rest of World ceramic sales markets (excluding Russia/Eastern
Europe) grew by 10% in H1 2023. Our products are sold in more than
80 countries around the world. Our three core markets of North
America, UK and South Korea accounted for 92% of Group sales in H1
2023.
We continue to see a significant opportunity to grow the
contribution from sales outside of core markets over the next 3-5
years.
2. Online - further developing online sales channels in our core
markets reaching more potential customers on more occasions
In our core UK and US markets, sales through all online channels
accounted for 48% of sales (H1 2022: 52%, FY 2022: 51%). In
addition, we continued to build our online presence in
international markets including South Korea.
For our own websites, our customer lists continue to grow and
are now 10% larger than twelve months ago. This has allowed us to
reduce investment in traffic acquisition spend and drive an
improved operating margin performance for our online sales.
3. Designing and launching new products - widening the appeal
with our existing customer base and taking market share
Sales from new product launches in H1 2023 accounted for in
excess of 10% of the Group's total sales, with a strong roadmap of
new launches for the next 18 months.
We expect to see further strengthening of this KPI due to our
investment in this area.
4. Leveraging our brands
We continue to invest in our six global brands and work on
leveraging the strength of our brands outside of their current core
markets.
Our Spode brand has grown again in H1 2023 and we expect further
benefits in H2 2023 from the new collaboration with Kit Kemp Design
Studio.
Returning our operating margin to 12.5% in the long term
1. Improving productivity in our UK factories through investment
in automation to reduce manual handling
We continue to invest in our UK factories and have a number of
new automation investments being installed over the remainder of
2023 which will reduce manual handling and increase our pieces
output per labour hour.
Productivity in our UK ceramic factory was maintained in H1 2023
despite a small reduction in output as we balance inventory
levels.
2. Leveraging our fixed cost base as we grow top line sales
We still see a significant opportunity to grow our sales
footprint over the next 3-5 years which will enable us to leverage
our spare factory capacity and improve capabilities in our UK
factories and our existing sales and distribution infrastructure
around the world.
3. Improving the profitability of our home fragrance division back to pre-Covid levels
Wax Lyrical, our home fragrance division, had a positive H1 2023
with both an improved sales and profit performance.
In 2022 we purchased the AromaWorks London brand and have now
absorbed the manufacturing of all of its product ranges within the
existing capacity at our Wax Lyrical factory in Cumbria, UK. This
has driven better recovery of fixed overheads and we expect the
home fragrance division to return to profitability for the full
year.
Outlook
We are cognisant of the ongoing challenges facing consumers
around the world with significant inflationary cost pressures and
rising interest rates. Whilst in the short term this will continue
to impact consumer spending decisions, we expect demand for our
brands to remain robust. We expect retailer customer stock levels
to stabilise after a period of destocking during the first
half.
The second half of the year has started in line with our
expectations and we have strong advance order books for our key
Christmas ranges which are ahead of last year and provide us with
good visibility of H2 sales. We will also continue to mitigate
economic pressures by bringing new products to the market. We
expect FY sales and profit to be in line with consensus market
expectations which were revised in July as a result of North
American retailer destocking.
Despite short term pressures, we remain confident in our medium
and long term ambitions to grow our sales and operating margins. We
have taken market share in key markets in recent years,
particularly in the US - and together, with the ongoing work to
increase productivity through investments in our factories, will
drive much improved levels of profitability in the medium term.
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
2023 2022 2022
Notes GBP'000 GBP'000 GBP'000
Revenue 2 44,122 45,467 110,820
Operating costs (43,408) (43,510) (102,154)
----------------------------------- ------ ------------ ------------ -------------
Headline operating profit(1) 714 1,957 8,666
Exceptional items 3
- restructuring costs (124) (1,006) (958)
- acquisition costs - - (76)
----------------------------------- ------ ------------ ------------ -------------
Operating profit 590 951 7,632
Interest income - - 29
Finance costs 4 (703) (212) (956)
Other income - 265 265
Headline profit before tax(1) 11 2,010 8,004
Exceptional items 3
- restructuring costs (124) (1,006) (958)
- acquisition costs - - (76)
----------------------------------- ------ ------------ ------------ -------------
(Loss)/profit before tax (113) 1,004 6,970
Tax 5 - (218) (1,415)
----------------------------------- ------ ------------ ------------ -------------
(Loss)/profit for the period
attributable to equity holders (113) 786 5,555
----------------------------------- ------
Earnings per share 7
Basic (0.82p) 5.72p 40.39p
Diluted (0.82p) 5.70p 40.35p
Headline earnings per share(1) 7
Basic (0.12p) 12.00p 46.59p
Diluted (0.12p) 11.97p 46.54p
Dividends proposed and paid per
share 6 3.50p 3.50p 15.50p
----------------------------------- ------ ------------ ------------ -------------
All the above figures relate to continuing operations.
(1) Headline operating profit is statutory operating profit of
GBP590,000 (H1 2022: GBP951,000) add exceptional items of
GBP124,000 (H1 2022: GBP1,006,000). Headline profit before tax is
statutory loss before tax of GBP113,000 (H1 2022: profit before tax
of GBP1,004,000), add exceptional items of GBP124,000 (H1 2022:
GBP1,006,000).
Consolidated Statement of Comprehensive Income
Unaudited
Six months
to 30 Six months Year to
June to 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (113) 786 5,555
--------------------------------------------- ----------- ------------- --------------
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of net defined benefit
pension scheme asset - - (1,517)
Deferred tax relating to items that will
not be reclassified subsequently to profit
or loss - - 380
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations (1,050) 2,082 2,466
--------------------------------------------- ----------- ------------- --------------
Other comprehensive income for the period (1,050) 2,082 1,329
--------------------------------------------- ----------- ------------- --------------
Total comprehensive income for the period
attributable to equity holders (1,163) 2,868 6,884
--------------------------------------------- ----------- ------------- --------------
Consolidated Balance Sheet
Unaudited
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 9,467 8,978 9,416
Intangible assets 9,119 7,176 8,581
Property, plant and equipment 16,640 16,326 16,842
Right-of-use assets 5,820 6,366 5,869
Pension scheme surplus 617 1,360 317
Total non-current assets 41,663 40,206 41,025
-------------------------------- ----------- ----------- --------------
Current assets
Inventories 42,100 42,597 41,117
Trade and other receivables 17,319 13,998 19,887
Current income tax asset 121 649 792
Cash and cash equivalents 1,460 3,189 1,681
Total current assets 61,000 60,433 63,477
-------------------------------- ----------- ----------- --------------
Total assets 102,663 100,639 104,502
-------------------------------- ----------- ----------- --------------
Current liabilities
Trade and other payables (12,938) (18,188) (16,469)
Borrowings (14,436) (6,044) (8,789)
Lease liabilities (1,239) (1,842) (1,696)
Total current liabilities (28,613) (26,074) (26,954)
-------------------------------- ----------- ----------- --------------
Non-current liabilities
Deferred tax liability (3,213) (2,562) (3,230)
Borrowings (2,000) (3,977) (2,981)
Lease liabilities (5,058) (4,967) (4,654)
Total non-current liabilities (10,271) (11,506) (10,865)
-------------------------------- ----------- ----------- --------------
Total liabilities (38,884) (37,580) (37,819)
-------------------------------- ----------- ----------- --------------
Net assets 63,779 63,059 66,683
-------------------------------- ----------- ----------- --------------
Equity
Called up share capital 710 710 710
Share premium account 18,344 18,344 18,344
Investment in own shares (3,108) (3,124) (3,108)
Share-based payment reserve 58 160 148
Translation reserve 2,602 3,268 3,652
Retained earnings 45,173 43,701 46,937
-------------------------------- ----------- ----------- --------------
Total equity 63,779 63,059 66,683
-------------------------------- ----------- ----------- --------------
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
2022 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
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Profit for the
period - - - - - 4,769 4,769
Other comprehensive
income for the
period - - - - 384 (1,137) (753)
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
period - - - - 384 3,632 4,016
Dividends paid - - - - - (481) (481)
Increase in
share-based
payment reserve - - - 59 - - 59
Transfer on
exercise or
lapse of options - - - (71) - 71 -
Shares issued
under employee
share schemes - - 16 - - (16) -
Deferred tax
on share-based
payment - - - - - 30 30
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
At 31 December
2022 710 18,344 (3,108) 148 3,652 46,937 66,683
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Loss for the
period - - - - - (113) (113)
Other comprehensive
income for the
period - - - - (1,050) - (1,050)
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Total comprehensive
income for the
period - - - - (1,050) (113) (1,163)
Decrease in
share-based
payment reserve - - - (90) - - (90)
Dividends paid - - - - - (1,651) (1,651)
At 30 June
2023 710 18,344 (3,108) 58 2,602 45,173 63,779
--------------------- ---------- ---------- ------------- ------------ -------------- ----------- ----------
Consolidated Statement of Cash Flows
Unaudited
Six months Six months Year to
to 30 June to 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Operating profit 590 951 7,632
Adjustments for :
Depreciation of property, plant and equipment 686 895 1,810
Depreciation of right-of-use assets 988 1,008 1,881
Amortisation of intangible assets 434 408 813
Charge for share-based payments (90) 32 91
Exchange gain/(loss) 618 (193) (559)
Loss on disposal of tangible fixed assets - 269 251
----------------------------------------------- ------------ ------------- -------------
Operating cash flows before movements
in working capital 3,226 3,370 11,919
----------------------------------------------- ------------ ------------- -------------
Increase in inventories (2,052) (11,388) (9,869)
Decrease in receivables 2,104 6,100 239
(Decrease)/increase in payables (3,275) 754 (643)
----------------------------------------------- ------------ ------------- -------------
Cash generated from/(used by) operations 3 (1,164) 1,646
----------------------------------------------- ------------ ------------- -------------
Contributions to defined benefit pension
scheme (300) (450) (900)
Interest paid (596) (114) (686)
Income taxes paid 587 (179) (300)
----------------------------------------------- ------------ ------------- -------------
Net cash outflow from operating activities (306) (1,907) (240)
----------------------------------------------- ------------ ------------- -------------
Investing activities
Interest received - - 5
Purchase of property, plant and equipment (753) (2,663) (4,093)
Purchase of intangible assets (1,007) (491) (1,933)
Other income - 265 265
Acquisition of subsidiary - - (821)
Net cash outflow from investing activities (1,760) (2,889) (6,577)
----------------------------------------------- ------------ ------------- -------------
Financing activities
Dividends paid (1,651) (1,788) (2,269)
Principal elements of lease payments (1,086) (1,057) (1,864)
Drawdown of short term borrowings 11,916 4,060 6,803
Repayments of borrowings (7,250) (1,000) (2,000)
----------------------------------------------- ------------ ------------- -------------
Net cash inflow from financing activities 1,929 215 670
----------------------------------------------- ------------ ------------- -------------
Net decrease in cash and cash equivalents (137) (4,581) (6,147)
Cash and cash equivalents at beginning of
period 1,681 7,616 7,616
Effect of foreign exchange rate changes (84) 154 212
-------------------------------------------- ------ -------- --------
Cash and cash equivalents at end of period 1,460 3,189 1,681
-------------------------------------------- ------ -------- --------
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 2023 was approved by the
Board on 13 September 2023.
The interim financial information for the six months to 30 June
2023 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 2022 were 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 2022.
Statutory accounts for the year ended 31 December 2022 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 current
trading performance and available banking facilities with
appropriate headroom in facilities and financial covenants.
There remains ongoing challenges in our sales markets around the
world caused by the negative impact of the cost of living crisis,
but the Group remains well-diversified with adequate funding
headroom available.
The Group has also produced a sensitivity analysis to its cash
flow forecast based upon possible downside scenarios. We have
modelled a 10% sales reduction to assess the potential negative
impact of a significant downturn in trading performance. This
demonstrated the Group still has sufficient headroom within
borrowing facilities and loan covenants.
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 pages 80-81 of the
Group's 2022 Financial Statements.
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 2023 2022 2022
GBP'000 GBP'000 GBP'000
UK 29,547 27,567 59,753
North America 14,575 17,900 51,067
44,122 45,467 110,820
--------------------- ------------ ------------ -------------
Six months Six months Year to
to 30 June to 30 June 31 December
Geographical market 2023 2022 2022
GBP'000 GBP'000 GBP'000
United Kingdom 11,703 11,531 28,255
North America 14,422 16,659 48,944
South Korea 14,333 13,443 26,656
Rest of the World 3,664 3,834 6,965
----------------------- ------------ ------------ -------------
44,122 45,467 110,820
----------------------- ------------ ------------ -------------
3. Exceptional items
Six months Six months Year to
to 30 June to 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Restructuring costs 124 1,006 958
Acquisition costs - - 76
----------------------- ------------ ------------ -------------
124 1,006 1,034
----------------------- ------------ ------------ -------------
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
2023 2022 2022
GBP'000 GBP'000 GBP'000
Interest paid 596 121 686
Interest on lease liabilities 107 91 270
703 212 956
------------------------------- ------------ ------------ -------------
Notes to the Interim Financial Information
Continued
5. Taxation
Tax for the interim period is charged at 0% (year to 31 December
2022: 20%) due to a loss being incurred during the period. The
expected weighted average annual corporation tax rate for the year
is 23%.
6. Dividend
An interim dividend of 3.50p (2022: 3.50p) per ordinary share
will be paid on 15 December 2023 to shareholders on the register on
17 November 2023. During the period a final dividend of 12.00p
(2022: 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
2023 2022 2022
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 (113) 786 5,555
---------------------------------------- ----------- ------------ -------------
Six months Six months Year to
to 30 June to 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Number of shares
Weighted average number of shares
for the purpose of basic earnings
per share 13,759,282 13,750,919 13,753,233
Weighted average dilutive effect
of conditional share awards 13,658 33,507 14,773
-------------------------------------- ------------- ------------- -------------
Weighted average number of shares
for the purpose of diluted earnings
per share 13,772,940 13,784,426 13,768,006
-------------------------------------- ------------- ------------- -------------
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
2023 2022 2022
GBP'000 GBP'000 GBP'000
Profit for the period attributable
to equity holders (113) 786 5,555
Add back/(deduct):
Exceptional items 124 1,006 1,034
Tax effect of exceptional items (28) (142) (182)
Headline earnings (17) 1,650 6,407
------------------------------------ ------------ ------------ -------------
Notes to the Interim Financial Information
Continued
8. Reconciliation of earnings before interest, tax, depreciation and amortisation (EBITDA)
Headline EBITDA
Six months Six months Year to
to 30 June to 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Headline operating profit 714 1,957 8,666
Add back:
Depreciation 1,674 1,903 3,691
Amortisation 434 408 813
Headline earnings before interest,
tax, depreciation and amortisation 2,822 4,268 13,170
------------------------------------- ------------ ------------ -------------
Statutory EBITDA
Six months Six months Year to
to 30 June to 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Operating profit 590 951 7,632
Add back:
Depreciation 1,674 1,903 3,691
Amortisation 434 408 813
Earnings before interest, tax, depreciation
and amortisation 2,698 3,262 12,136
--------------------------------------------- ------------ ------------ -------------
9. Retirement benefit schemes
Defined benefit scheme
The defined benefit obligation as at 30 June 2023 is calculated
on a year-to-date basis, using the latest actuarial valuation as at
31 December 2022 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.
The Group has made contributions of GBP300,000 to the scheme
during the period.
10. Related party transactions
The Group's related parties are as disclosed in the Report and
Accounts for the year ended 31 December 2022. There were no
material differences in related parties or related party
transactions in the six months ended 30 June 2023 except for
transactions with key management personnel.
The most significant of these was on 2 May 2023, under The
Portmeirion Group 2022 Approved and Unapproved Share Option Plans,
when 50,000, 35,000, 35,000, 35,000 and 15,000 share options awards
were granted to M Raybould, M Knapper, W Robedee, D Sproston and M
MacDonald respectively at an option price of GBP4.69 per share when
the market price was GBP4.69 per share.
In addition, on 2 May 2023, under The Portmeirion Group 2018
Deferred Incentive Share Option Plan, 5,275, 2,686, 3,864 and 2,087
share option awards were granted to M Raybould, M Knapper, W
Robedee and D Sproston respectively at a total exercise price of
GBP1 per individual when the market price was GBP4.69 per
share.
11. Post balance sheet events
There were no post balance sheet events.
12. Availability of document
A copy of the interim results will shortly be available on the
Company website at www.portmeiriongroup.com.
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END
IR NKNBDDBKBFCD
(END) Dow Jones Newswires
September 14, 2023 02:00 ET (06:00 GMT)
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