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[April 2005]
Portmeirion Group 2004 Results
Sales for Portmeirion Group PLC for 2004 were £27.686 million, 2.9% below the previous year. If group sales are compared on a like for like exchange rate, sales in 2004 were 0.5% greater than in 2003.
The loss before taxation and before operating exceptional items of £398,000 compares with a profit in 2003 of £2.003 million. Operating exceptional asset write-downs of £1.193 million, arising from planned reorganisation, bring the total loss for the year to £1.591 million.
The board recommended a final dividend of 9.95p, bringing the total to 13.25p for the year. This was unchanged from 2003.
Sales in the UK were 1.7% lower than in 2003, in the face of intense low-cost competition from product ranges sourced overseas. Some 1.5% of margin had to be sacrificed to maintain this level of sales.
Sales in the USA grew by 17%. This excellent improvement is, however, reduced to 6.6% when converted into sterling at the higher exchange rate. The improvement was mainly the result of the new lower priced PS Portmeirion Studio ranges that accounted for some US$2 million incremental sales.
Sales in all other export markets were below that of 2003. The most significant was Korea where, after several years of significant growth, sales fell by 4.7%. Portmeirion Chairman Arthur Ralley said he expected sales to return to growth in Korea during 2005. The other major reduction in sales was in Italy, with a fall of 40%, due to a change of distributor in this market. Arthur Ralley said that again he expected sales to increase this year in Italy.
The group is going ahead with its plan to reduce its UK manufacturing, warehousing and distribution operations from four sites to two, while maintaining current production capacity. Progress has been good and consolidation of the smaller manufacturing site into the larger main site is underway and should be completed during the first half of 2005.
The group currently operates from two warehouse sites. The plans to move to a new purpose-built and larger warehouse early in 2006 - with modern handling equipment - are well advanced.
The total expenditure, including capital, on the reorganisation, which will result in the closure of two freehold sites, is planned to be under £1 million in 2005. However, the proceeds from the sale of the two sites are expected to exceed this.
The anticipated reduction in operating costs will be approximately £500,000 per annum, with full effect from 2006.
ENDS