Portmeirion Group PLC – Trading Update

Portmeirion Group PLC – Trading Update

Portmeirion Group, the designer, manufacturer and worldwide distributor of high quality homewares under the Portmeirion, Spode, Royal Worcester, Wax Lyrical, Nambé and Pimpernel brands, is pleased to announce that it expects revenue and profit before tax for the year to 31 December 2019 to be in line with revised market expectations.

 

Revenue for the year ended 31 December 2019 will be at least £92 million (2018: £89.6 million), representing an increase of 3% over the previous year. This includes the positive effect of the Nambé acquisition in July 2019. The expected like-for-like decline in sales of 5% is driven by lower sales in our export markets for our Portmeirion Botanic Garden ranges as previously reported.

 

The sales decline was largely a result of historical overstocking due to the level of reshipping from other markets into South Korea. We invested considerable resource in 2019 to resolving this issue and have made good progress. We will continue to focus on this in 2020 in order to protect demand in South Korea in the long term.

 

We are nevertheless pleased with the performance of our business in other areas during 2019. Against a tough economic backdrop, with many UK retailers experiencing a consumer downturn, our UK market grew by 5%.

 

Our migration towards online continues with total online sales in our core UK and US markets growing by 17% year on year. We now estimate that 30% of our total UK/US sales are made through online channels reflecting the strong progress we have made in the transition to online. Sales from our own ecommerce platforms grew 16% year on year and are expected to continue to grow strongly in 2020. Online sales remain a key area of strategic focus for the Group.

 

Excluding the benefit of Nambé, the US market, the largest for the Group, declined by 12% in US dollar terms. This decline was driven by our strategy to reduce reshipping into South Korea, and this market should return to growth in 2020.  

 


Mike Raybould, CEO, said:

 

“Whilst 2019 was a challenging year, we have taken a long term view to protect our brand in our South Korean market. This has caused us short term pain through reduced export sales of Portmeirion Botanic Garden and increased cost and disruption to our factories from developing a large number of new ranges. However, we believe we have now made good progress in stabilising this key market.

 

We are confident in our strategic plan and the long term opportunities to grow our business. In 2020, we intend to further increase investment behind key strategic areas such as driving online growth and brand marketing including campaigns and product launches to celebrate the 250th anniversary of Spode. The integration of the Nambé business continues to go well and we look forward to seeing the anticipated benefit in future sales growth. “

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