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Portmeirion Group sales slip in H1 due to US retailer destocking

Portmeirion Group has reported that its sales for the six months ended 30 June, 2023 were £44.1m, a decrease of 3% year-on-year.

As previously stated, the decrease from £45.5m in H1 2022 is reflective of increased caution on ordering from US customers, in particular the destocking by retailer customers. Headline PBT was £0.0m, down from £2m in H1 2022. Headline operating profit margin of 1.6% was impacted by the fall in revenue and gross margin reduction.

Gross margin in H1 was impacted by peak inflation in stock, due to container freight rates, which are expected to subside through H2 2023 and 2024.

Over the six months, Portmeirion maintained its improved productivity in its Stoke-on-Trent ceramic factory through an ongoing automation programme. The Spode brand continues to grow, with further benefit expected in H2 from a new collaboration with Kit Kemp Design Studio and new products in the Spode Christmas Tree range.

Ceramic sales in the rest of the world continue to grow for the group, with diversification a key part of its long term growth strategy, with further growth expected in H2.

Portmeirion has also launched a new sustainability strategy – Crafting a Better Future – which demonstrates its commitment to becoming a more sustainable business. In H1, the group reduced gas and electricity usage by 6% year-on-year.

H2 has started in line with expectations and the Christmas order book is strong. The group expects full-year sales and profit to be in-line with consensus market expectations.

Mike Raybould, chief executive, commented:As previously indicated, the Group has seen reduced order flow in H1 2023 across our North American market. This has been particularly noticeable amongst retail customers reducing stock levels. However we are confident that in the past few years we have made lasting market share gains in the US and have further incremental product listings agreed across key US department store chains for H2 2023.  Together with new product launches we therefore expect that sales in our US and Canadian markets will stabilise and return to growth in due course.

We are successfully controlling overheads despite the significant inflationary environment and will continue to target further global synergies in our cost base over the next 12 months. Alongside ongoing improved factory productivity in our Stoke site and as global container shipping rates return to historical levels, we remain confident of delivering our medium and long term operating margin growth targets.

“We have made great strides on both operational and commercial fronts in the last few years and our brands continue to resonate well with consumers around the world.”

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