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[March 2007]
Portmeirion 2006 Results
The summary of the 2006 results for Portmeirion Group Plc (Stoke-on-Trent,
England) is as follows:
Turnover: £28.422 million (2005: £27.552 million); up 3.2%. Pre-tax profit before exceptional items: £2.861 million (2005: £1.699
million) up 68.4%.
Pre-tax profit after exceptional items: £2.584 million (2005: £1.380
million) up 87.2%.
Operating cash flow: £2.731 million (2005: £3.033 million) down 10%. Basic earnings per share: 17.03p (2005: 10.57p) up 61.1%. Dividends per share: 14.00p (2005: 13.25p) up 5.7%.Chairman Arthur Ralley said that 2006 had been a year when the group's strategy of transformation to a supplier of designer branded homewares and giftware, rather than solely a ceramic manufacturer, had delivered excellent results. Furthermore, the acquisition of the Pimpernel brand would provide important synergies for future development and expansion.
“I am pleased to report another creditable improvement in pre-tax profit of £1.2 million,” he said, “due in part to an increase in Group annual sales of 3.2% and also to a significant increase to both production gross profit margin and gross profit margins on sourced products."
On sales performance, Arthur Ralley commented: “Group sales for the year increased by 3.2% over the previous year and by 4.2% when measured at the same US dollar exchange rate as 2005. At the half year I reported Group sales 5.7% lower than 2005, but following an excellent increase of 11% in the second half of 2006 annual sales finished 3.2% ahead. This was due to a very strong second half sales performance in North America and the Far East coupled with a major improvement in UK sales. At the half-year sales in the UK were 22% lower than 2005, but sales in the second half were almost level with 2005, giving an annual figure which was 12% lower. This significant improvement in UK sales has continued into the first two months of 2007. These increases have been achieved with the introduction of new product ranges sourced in the Far East, and with added value promotional initiatives with our classic ranges manufactured in the UK.
“Once again the Group achieved an excellent increase in total export sales of 11.0%. Notable improvements were a 7.4% increase in US sales and sales to Canada of nearly double that of 2005. Added to these was yet another very substantial increase of 20% in sales to South Korea, which has been achieved primarily with sales of classic ranges. We are introducing some of our contemporary ranges into South Korea in 2007 and, therefore, I believe we can obtain further growth in this very important market. In 2006 exports totalled 70% of the Group's sales, which is a very positive reflection on the continuing collectability of our classic ranges around the world."
The Chairman also commented on Portmeirion's product strategy: “The Group's strategy of producing excellent design, quality and value in new product ranges, sourced overseas, has delivered significant increased sales in the second half of 2006, and with more new ranges arriving the trend is expected to continue this year. As previously reported, the range designed in collaboration with Sophie Conran is a runaway success and is being expanded in 2007. Additional collaborative ranges are being introduced this year under the Portmeirion banner, and I expect further sales gains to result.
“The Group made an important acquisition of the Pimpernel brand in the fourth quarter of 2006. Pimpernel has been the leading brand of placemats, coasters and trays in the UK and has also established markets in the US and Canada. The main Pimpernel functions have been promptly integrated into the Portmeirion systems at minimal cost, and the necessary sales and marketing team is in place. The Portmeirion design and marketing teams have started to exploit the enormous potential for incremental sales, with complementary designs and new channels of distribution. All Pimpernel products are sourced in the Far East, and together with the increasing programme of Portmeirion branded products also sourced, US dollar purchases will increase very considerably in 2007 and beyond. Since some 40% of Group sales are in US dollars, the result is an increasing natural hedge against adverse exchange rate movements."
He also took a look at current trading and future prospects and said: “I am pleased to report a positive start to 2007, with a sales increase percentage in double digits for the first two months compared to 2006. This is before the contribution of sales from the new Pimpernel ranges, which will become available in the second quarter of 2007. The Group is now in a position to maintain this momentum, with many new product ranges of tableware and giftware in development. I, therefore, believe that the Group can increase overall sales whilst continuing to keep a tight rein on costs, with the resultant benefit to Group profitability.
“The Group's new Chairman, Dick Steele, currently the senior Non-executive Director, succeeds me with effect from 1st May 2007 and, with his able leadership and a very experienced Board of Directors, I expect the Group to continue the excellent progress of recent years.
“I would like to thank the management team and workforce for their valuable contribution to the success of the Group in 2006.”
www.portmeirion.com
ENDS