TIDMPMP
RNS Number : 5779G
Portmeirion Group PLC
20 July 2023
20 July 2023
Portmeirion Group PLC
(the "Company" or the "Group")
Half-Year Trading Update
North American retailer destocking despite robust end consumer
demand
Portmeirion Group PLC, the owner, designer, manufacturer and
omni-channel retailer of leading homeware brands in global markets,
updates on trading for the six months to 30 June 2023.
Sales for our first, traditionally quieter half, are expected to
be GBP44 million, down 3% on the same period last year.
In our AGM statement in May, we highlighted that we have seen
some increased caution from US customers. This caution on ordering
from North America (US and Canada) customers has continued and is
particularly noticeable amongst the national department stores as
they react to the weaker economic climate and take a more
conservative approach to stock levels. Accordingly, sales in the US
and Canada are down 14% on a year-on-year basis. Despite this and
encouragingly our customer demand in North America remains robust
for the Company's products supported by the sales out data we have
(which covers c.60% of market sales) and the strong forward order
book for Christmas which is ahead of last year. Consequently this
underlying end-consumer demand should support restocking by our
retail customers in due course.
Across our other markets, we have made pleasing progress and are
ahead of last year, in line with our expectations. Encouragingly,
ceramic sales in rest of world markets, a core element of our
growth strategy, are up by 10% and sales in our home fragrance
business, Wax Lyrical, are up 15%. In both of these areas we expect
continued further growth through the second half.
There has been a good reaction to new product launches in the
first six months of 2023, despite the tough consumer climate and we
are encouraged by strong order books for our US market with the
highly popular Spode Christmas ranges that are up double digit on
last year. Designing and launching new products remains a key part
of our growth strategy.
In terms of the full year outlook, it is challenging to assess
how long the North America caution amongst our retailer customers
will endure and whilst we note the encouraging end customer sell
through data and our strong Christmas order book, the Board
believes that it is prudent to assume that this caution will
continue through the second half resulting in the Group's sales
being below and profits for FY23 being significantly below current
market consensus.
The Group's balance sheet remains strong and we have
successfully reduced inventory levels since the end of FY22 and are
expected to reduce further by the end of FY23.
Despite the current short-term uncertainty in North America
amongst our retail customers, we continue to be confident in the
Group's prospects more generally and remain focused on our
long-term growth and margin improvement opportunity and making
continued progress against our strategy.
Mike Raybould, Chief Executive, comment:
"Although consumer markets are clearly tougher than 12 months
ago, we continue to invest in our long-term strategy for sales and
operating margin growth.
Whilst retailer order flow in North America is currently
challenging, our data clearly indicates that end customer demand
remains robust, indeed is up on last year. Accordingly, it is
important that we ensure that we maintain the investment in our
capabilities in North America for when the short-term uncertainty
subsides.
Other key markets have performed in line with our expectations,
and we remain confident that we are retaining market share gains
made in recent years. We are pleased with our new product launches
and the work we have done to grow operating margins which will
benefit the Company in the medium and longer term."
Interim results for the six months ended 30 June 2023 will be
reported in the second half of September 2023.
Notes: This announcement contains inside information for the
purposes of the retained UK version of the EU Market Abuse
Regulation (EU) 596/2014 ("UK MAR").
ENQUIRIES:
Portmeirion Group PLC:
Mike Raybould, Chief Executive +44 (0) 1782 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
Malachy McEntyre Corporate Broking
Isobel Jones
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
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END
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