Stoke-on-Trent-based Portmeirion Group has announced that ‘challenging and unpredictable” markets during the second half of the year mean pre-tax profits for the full year are expected to be below market expectations.
In a trading update, the company, which manufactures, designs and distributes homewares, said ahead of its year end on 31 December 2024 that revenue for the year is expected to be circa £90 million, which reflects second half sales down seven per cent on a like-for-like basis and pre-tax profits are expected to be £1 million.
The previous financial year’s results, reported in March this year, showed pre-tax profits were down more than 60 per cent from £8 million to £3 million, but with optimism for this year. Revenue was down from £110.8 million to £102.7 million.
This year’s expected drop has been put down to supply delays in the key Christmas period following previously flagged supply chain disruption from Asia and recent shipping disruption into the US due to port strikes; continued destocking in South Korea and challenging and unpredictable market conditions, exacerbated in recent months by uncertainty in the lead up to significant political events in some key markets.
However, despite short term challenges, the group remains confident in the medium-term outlook.
And Spode sales are already up over 35 per cent over pre-Covid levels and the homeware brand Wax Lyrical range is seining ‘ongoing improved performance’.
Chief Executive Mike Raybould said in the trading update: “Consumer confidence and spending levels remain challenging across our key markets of the US, Asia and UK.
“We took action at the start of the year to reduce our overhead base by circa £4 million (circa 10 per cent) which will give us a leaner cost base from which to grow profits as consumer markets improve. The impact of lower sales in South Korea and the resulting lower utilisation of our UK tableware factory has had an adverse impact on 2024 profitability, excluding which, overall Group net profitability would be significantly up on 2023.
“We believe in the strength of the underlying consumer demand for our brands and the opportunity to further leverage them across all markets. Demand for our Spode brand continues to grow across key markets, including the US, reflecting the focus on new product, expanding distribution of our well known ‘Spode Christmas Tree ‘ range and online marketing.
“We are delighted with the success of our recent ‘Blue & White Christmas’ campaign featuring Jack Kinsey, a local interior designer, whose Instagram reels have already amassed over eight million views since launch a few weeks ago. Spode sales are already up over 35 per cent over pre-Covid levels and we see great opportunity for strong future growth over the coming years.
“Whilst we expect the near-term market outlook to remain uncertain, we continue to focus on what we can control and are confident we can further strengthen our business model and ability to maintain and grow market share across our key markets.”
