Portmeirion Group Primary Results 2021

17 March 2022

Portmeirion Group PLC

('the Group')

Preliminary results for the year ended 31 December 2021

Record revenue performance and profit recovery delivered

Full year dividend restored

Financial summary

Headlines:

Financial

• Record Group revenue of £106.0 million in the year to 31 December 2021, an increase of 21% over the prior year (2020: £87.9 million) and 14% over pre Covid-19 level (2019: £92.8 million).
• Excellent Q4 seasonal trading performance despite ongoing global supply chain inflation and disruption, demonstrating the strength of consumer demand for our brands, progress with our online strategy and resilience of our operations.
• Sales from our own ecommerce platforms increased by 16% over 2020 and are now 81% above 2019 levels. Online sales now represent 50% of total sales in our core UK and US markets in the year to 31 December 2021 (2020: 47%, 2019: 30%).
• Headline profit before tax¹of £7.2 million (2020: £1.4 million, 2019: £7.4 million).
• EBITDA of £10.7 million (2020: £5.1 million, 2019: £11.4 million).
• Headline basic earnings per share¹of 38.85p (2020: 4.96p, 2019: 56.32p).
• Dividend reinstated with final dividend proposed of 13.00p per share, bringing total dividends paid and proposed to 13.00p (2020: £nil, 2019: 8.00p).
• Strong balance sheet maintained with net cash of £0.7 million at 31 December 2021 (2020: net cash £0.7 million, 2019: net debt £12.3 million). Cash generative, which has allowed accelerated investments in our strategic capabilities.

¹ Headline profit before tax and headline basic earnings per share exclude exceptional items – see notes 2 and 4.

Operational

• Sales growth across three key markets of the US, UK and South Korea. Rest of the world sales also performed strongly and are 71% ahead of pre Covid-19 levels.
• Substantial progress in developing online and digital capabilities, including ongoing investment in online platforms and warehouse fulfilment capabilities to support growth.
• Strong growth across all brands, particularly in Spode up 30% over 2020.
• Completed a number of key operational projects; hand and body line extension at Wax Lyrical, automation investment in our UK ceramic factory and mezzanine floor installed in our UK distribution centre.
• Extended our long term energy hedging programme to Q1 2024, insulating the Group against the current volatility in energy prices.
• Continued to deliver an improved carbon emission performance whilst undertaking a full evaluation of our ESG position in order to deliver a sustainable forward strategy.
• Our UK businesses both achieved Investor in People (IIP) Platinum accreditation in recognition of our commitment to leading, supporting and improving our workforce.

Mike Raybould, Chief Executive commented:

” I am delighted with the significant progress we have made. Our record sales reflect the strong progress we have made on our strategy whilst successfully navigating the ongoing disruption from the pandemic. I would like to thank our employees around the world for their tireless efforts against this unprecedented backdrop.

We are focused on reaching an ever wider potential customer base – by developing online sales channels, building out new geographies and leveraging our brands and new product development more effectively. On each count, I am pleased to report we have made strong progress in 2021.

We saw a very successful seasonal holiday trading period driven by customers increasingly searching for our brands online as well as in physical retail stores. We have a roadmap for developing our brands around the world and the 30% against 2020 (and 33% against 2019) growth in our Spode brand indicates the potential opportunity ahead.

Our capital investments made in the last 12 months will enable increased production in the current year and beyond whilst driving improved operating margins through productivity gains.

We are mindful of the ongoing disruption to global supply chains and cost pressures including container freight rates. We have long term energy contracts in place until early 2024 that will protect the business in the short term from increased energy costs but are watchful that consumers around the world will require a period of adjustment to the inflationary pressures in everyday spend. We remain confident we can continue to navigate those challenges and that our brand strength and the changes we have made to the business will allow us to continue to grow in the short term with improved operating margins, and in the long term deliver significant gains in profitability.

We are also pleased that the strong trading performance and operating cash generated has allowed us to reintroduce our longstanding dividend to shareholders .”