Portmeirion (LON:PMP)

Portmeirion (LON:PMP)


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982.50 p
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Market Cap
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Portmeirion RNS Release

Final Results


RNS Number : 5078T
Portmeirion Group PLC
21 March 2019
 

21 March 2019

 

Portmeirion Group PLC ('Portmeirion' or 'the Group')

 

Preliminary results for the year ended 31 December 2018

 

 

Financial summary

 

 

2018

£m

 

2017

£m

 

Increase

%

Revenue

89.6

84.8

5.7

Pre-tax profit

9.7

8.8

10.1

EBITDA

11.8

11.0

7.5

Basic earnings per share

72.12p

65.07p

10.8

Dividends paid and proposed per share in respect of the year

37.50p

34.66p

8.2

 

 

 

Highlights:

 

Financial

·   Tenth consecutive year of record Group revenue which increased by 5.7% to £89.6 million (2017: £84.8 million).

·    Profit before tax increased by 10.1% to £9.7 million (2017: £8.8 million).

·    EBITDA increased by 7.5% to £11.8 million (2017: £11.0 million).

·    Earnings per share increased by 10.8% to 72.12p (2017: 65.07p).

·    Total dividends paid and proposed for 2018 increased by 8.2% to 37.50p per share (2017: 34.66p).

·    Net cash improved to £2.3 million (2017: £1.6 million).

·    Operating margin increased to 11.1% (2017: 10.7%).

 

 

Operational

·    Strong progress across key markets of UK, US and South Korea.  

·    Home fragrance division (acquired in 2016) delivers sales growth of 11.1%.

·    Online sales growth of 24.4% over the prior year.

·   Successful new product launches including Sara Miller London Portmeirion and line extensions in Portmeirion Botanic Garden and Royal Worcester Wrendale Designs.

·   For 2019, three exciting new UK manufactured ranges launched - Portmeirion Botanic Garden Harmony, Portmeirion Atrium and Spode Kingsley.

·    Appointed Angela Luger as a Non-executive Director on 1 March 2019.  

 

Dick Steele, Non-executive Chairman commented:

 

"We are delighted to be reporting a tenth consecutive year of record revenue and another record profit before taxation. Our strategy and core values remain unchanged. We are focused on driving profitable sales growth through new product introduction, developing our markets, investing behind our brands and enhancing our operational capabilities and efficiency supported with complementary strategic acquisitions.

 

We look forward into 2019 with confidence and at this very early stage of the year expect trading to be in line with expectations for the full year."

 

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR).

 

 

ENQUIRIES:

 

Portmeirion Group PLC:

 

 

Dick Steele

+44 (0) 1782 744 721

[email protected]

Non-executive Chairman

Mike Raybould

 

+44 (0) 1782 744 721

 

[email protected]

Group Finance Director

 

 

 

Hudson Sandler:

 

 

Dan de Belder

+44 (0) 207 796 4133

[email protected]

Nick Moore

 

[email protected]

Oenone Potter

 

[email protected]

 

 

 

Panmure Gordon

(Nominated Adviser and Broker):

 

+44 (0) 207 886 2500

 

Freddy Crossley / Joanna Langley

Corporate Finance

 

James Stearns

Corporate Broking

 

 

Cantor Fitzgerald Europe

(Joint Broker):

 

+44 (0) 207 894 7000

 

Phil Davies / Rick Thompson

Corporate Finance

 

Caspar Shand Kydd

Sales

 

 

Portmeirion Group PLC

Chairman and Chief Executive Statements

 

We are very pleased to be able to report another record breaking year for the Group. Sales within our key markets of the UK, USA and South Korea have all increased.  We have made significant progress towards our strategic targets, particularly in growing our e-commerce and home fragrance sales. The Board is recommending an increased dividend to shareholders.

 

The Group continues to invest in our major brands which are the key drivers of value for the business.

 

Financial Highlights

Revenue was £89.6 million for the year, an increase of 5.7% over the previous year (2017: £84.8 million). At a constant US dollar exchange rate our revenue increased by 7.2%. At our home fragrance division, acquired in 2016, sales increased by 11.1% to £15.5 million (2017: £13.9 million). Sales from our e-commerce sites increased by 24.4% to £4.3 million (2017: £3.4 million).  

 

Since 2013, the Group has increased revenue by 54% from £58.3 million to £89.6 million.

 

Profit before taxation was £9.7 million, an increase of £0.9 million or 10.1% on the previous year. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 7.5% to £11.8 million in the year (2017: £11.0 million). Both of these figures represent all-time records for Portmeirion.

 

Basic earnings per share increased by 10.8% to 72.12p per share (2017: 65.07p), while dividends have increased by 8.2% to 37.50p (2017: 34.66p), with dividend cover of 1.93 times (2017: 1.85 times) maintained in line with our long term target of approximately two times.

 

Dividend

The Board is committed to a progressive dividend policy and aims to maintain a sustainable and appropriate level of dividend cover. We have increased our dividend for ten consecutive years. The Group will look to increase our dividend whenever appropriate driven by our results, cash balances, future prospects and other key performance indicators.

 

The Board is recommending a final dividend of 29.50p (2017: 27.26p) per share bringing the total paid and proposed for the year to 37.50p (2017: 34.66p) per share, an increase of 8.2% over the total amounts paid in respect of 2017.

 

Governance   

The Directors recognise and welcome the importance and benefits of good corporate governance and have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the 'QCA Code').

 

Further details on how the Company complies with the principles of the QCA Code can be found on our website and in our annual report and accounts.

 

People and culture

We are committed to the continuing promotion of our established and unique vision and values which support the Group's culture of openness and integrity. We encourage attitudes and behaviours that will positively impact on our long-term success and sustainability through the achievement of our objectives and business strategy.

 

The Group recruits people who share our values, and this continues to be a key part of our recruitment strategy as it enables new and existing employees to work seamlessly towards realising our vision. Further details on our corporate culture and its integration within the Group can be found in the Corporate Responsibility section and the Corporate Governance Statement in our annual report and accounts.

 

The Board keeps the composition and performance of the Directors and most senior management of the Group under review to ensure we have the appropriate skills and experience in place to deliver our strategic aims.

 

At the beginning of March 2019, we were pleased to welcome Angela Luger to the Board as a Non-executive Director. Angela's background brings a mix of retail, digital and customer focused experience to the Board.

 

Our performance during the year

Revenue for the Group increased by 5.7% to £89.6 million (2017: £84.8 million). This represents strong progress across all areas of the business, with improved performance within our core markets of the UK, USA and South Korea, as well as market segment growth in UK and USA ceramic and home fragrance divisions.

 

Geographical performance

The UK became our largest geographical market following the Wax Lyrical acquisition in 2016 and now accounts, in total, for 35% of Group sales at £31.5 million, an increase of 9.2% on the prior year (2017: £28.8 million). This growth was driven by increased online and home fragrance sales. The UK market continues to remain robust despite the continuing uncertainty of the Brexit outcome.  We remain cautiously optimistic in the UK given our diversified distribution routes in the marketplace via major retailers, independent stores, our own retail shops and our growing e-commerce sites. 

 

The United States is our second largest market at 30% of Group sales. In translated figures, sales in the USA grew by 6.0% to £26.7 million (2017: £25.2 million), which was an increase of 9.9% in local currency due to the stronger pound in 2018 over the prior year.

 

Sales into South Korea increased by 24.6% to £8.2 million in the year (2017: £6.6 million) and accounted for 9% of Group sales. As a result of ongoing new product development work we were able to reverse the recent trend of declining sales. We monitor this market closely and work with our distributor to diversify our product portfolio and target new customers. We remain confident for the future in this key market.

 

Sales to the rest of the world decreased by 4.0% to £23.2 million in the year (2017: £24.2 million), largely driven by a planned reduction in sales to India.  Performance in Europe and Asian markets is still encouraging. The Group has continued with its plan of reducing our reliance on sales in our three major markets as we continue to diversify and sell into over 70 countries around the world.

 

Our strategy of growing our own online sales continues to bear fruit, with sales growth of 24.4% to £4.3 million (2017: £3.4 million). We continue to invest in our online fulfilment capabilities so we are able to cope with the dramatic growth of our own e-commerce sites and retailer demand.

 

Segmental performance

The Group continues to operate under our three key segments: Portmeirion UK ceramic, Portmeirion USA ceramic and home fragrance.

 

Portmeirion UK - ceramic

Portmeirion UK, the main trading entity of the Group, had a strong performance during the year with external sales of £48.1 million, an increase of 4.3% over the prior year (2017: £46.1 million). This growth was driven by the success of new product launches, aided by our increase in e-commerce sales, particularly Sara Miller London Portmeirion and Royal Worcester Wrendale Designs.

 

Our UK factory expanded production during 2018, and we are capable of further growth in 2019 to support key product launches being manufactured in Stoke-on-Trent. We continue to experience inflationary production cost pressures in labour and energy, but have been able to mitigate these with efficiency savings and technological innovations.

 

Portmeirion USA - ceramic

The USA remains our largest export market and is serviced by our trading subsidiary Portmeirion USA. The company has an office in New Jersey, showrooms in New York and a national warehousing and logistics centre in Connecticut.

 

Sales at Portmeirion USA have grown by 5.2% in the year to £26.0 million (2017: £24.7 million). This growth has been driven by both new product development and increased sales of heritage patterns including Portmeirion Botanic Garden and Spode Christmas Tree.

 

The growth in the USA is satisfying and we anticipate further growth in 2019.

 

Home fragrance

The Group acquired the Wax Lyrical business in May 2016. This business continues to make good progress with total home fragrance sales increasing by 11.1% over prior year to £15.5 million (2017: £13.9 million). Over £2 million of the 2018 sales were made via Portmeirion UK and Portmeirion USA distribution channels, which is encouraging.

 

We manufacture home fragrance products in our factory in the Lake District. Our plan is to increase capacity and output in 2019 to grow the business in line with the Group's targets.

 

We continue to believe the home fragrance division has strong potential for growth in the UK and export markets. 

 

Products and brands

Our brands and products are the key wealth creators for the Group. We have five major brands - Portmeirion, Spode, Wax Lyrical, Royal Worcester and Pimpernel. Supporting our brands is central to our business strategy and we continue to invest in both our heritage patterns and new ranges.

 

Portmeirion Botanic Garden, first launched in 1972, continues to be our largest selling pattern with ongoing sales of over £30 million annually. We estimate there are over 50 million pieces of Botanic Garden in use worldwide today. We continue to be vigilant of imitators to Botanic Garden and indeed our other patterns, and we are diligent in our legal protection of them.

 

New product development is a vital component of our brand value and includes both new ranges and line extensions within our existing patterns. Each year we continue to develop, extend and refine our product offering to retain and build customer appeal. In 2018, we continued to refresh our heritage patterns such as Portmeirion Botanic Garden and Spode Christmas Tree in order to expand their appeal, as well as launch exciting new collections such as Sara Miller London Portmeirion.

 

A list of our current patterns can be found at www.portmeirion.co.uk, www.spode.co.uk, www.wax-lyrical.com, www.royalworcester.co.uk and www.pimpernelinternational.co.uk. Customers in the United States should go to www.portmeirion.com.

 

Strategic priorities

The Group continues with its strategy of diversifying products, customers, geographical markets and routes to market within those countries. This strategy has enabled us to realise opportunities as they have arisen and reduce our reliance on any one market, customer or distribution channel.

 

Our long term strategy is focused on five key areas: profitable sales growth, new product introduction, developing our brands, enhancing our operational efficiency and capability and supporting this with complementary strategic acquisitions.

 

Profitable sales growth underpins all of the Group's strategic objectives, and we aim to achieve this by diversifying our markets and completing targeted product development within those markets. In 2018, we achieved our tenth consecutive year of record sales with 5.7% growth to £89.6 million (2017: £84.8 million). We also improved our operating profit margin to 11.1% (2017: 10.7%). Our focus going forward will be to expand our export market breadth and penetration and to promote organic growth within our home fragrance division.

 

We continue to invest and enhance our five global brands, which collectively have been in existence for nearly seven hundred years.  

 

Our operational capabilities are constantly reviewed in order to position the Group to meet the requirements of our customers. The continued trend of retail moving to online and drop-ship fulfilment has required operational investment and will continue to do so. We continue to drive efficiencies through our manufacturing and distribution sites to combat inflationary cost pressures and remain competitive.

 

The Group remains committed to acquiring businesses where there is a strategic fit and the combination would be earnings enhancing. We have now successfully integrated the Wax Lyrical business and continue to drive towards our goal of strong growth for this segment of the Group's sales.   

 

As referred to in our principal risks section of our annual report and accounts, we are aware of the current uncertainties that surround the Brexit date of 29 March. The Group relies on the importation of some raw materials and finished product and exports to over 70 countries. Significant disruption to the flow of goods across the UK border and changes in tariff rates would impact our business in the short term. Our contingency planning includes increasing stock of critical raw materials and product lines and currency hedging where necessary.

 

Outlook

Although we face political and economic uncertainties around the world, including Brexit, we look forward into 2019 with confidence and at this very early stage of the year expect trading to be in line with expectations for the full year.

 

Our strategy and core values remain unchanged. We are focused on driving profitable sales growth through new product introduction, developing our markets, investing behind our brands and enhancing our operational capabilities and efficiency supported with complementary strategic acquisitions. In particular we will invest behind further growth in our online sales and fulfilment capabilities around the world. We will continue to leverage the potential of our home fragrance business and develop sales markets not only in the UK but also around the world. Our tableware brand, Spode, will be 250 years old next year and we will be developing marketing and product plans to celebrate the heritage and the future of this iconic British brand.

 

As such, we remain confident in our ability to create shareholder value in the short, medium and long term.

 

Dick Steele                                                     Lawrence Bryan

Non-executive Chairman                               Chief Executive

 

 

 

 

 

Financial Review

 

2018 was a strong year, demonstrating our robust growth and profit generation.  Overall business performance is shown in our key performance indicators in our annual report and accounts.

 

Revenue

Revenue totalled £89.6 million for the year ended 31 December 2018. This represented an increase of 5.7% over the previous year (2017: £84.8 million).

 

Sales in our US market were translated on consolidation at a lower exchange rate than in 2017. At constant currency the Group's sales were up 7.2% on the previous year.

 

Our revenue grew in all of our three biggest geographical markets. The UK market benefited from growth in both our ceramic business and also in Wax Lyrical, our home fragrance business. Our US market continued to expand with an ongoing shift to online business from traditional department stores. Sales in South Korea improved, reversing the trend of the last few years, aided by new product development.  New product launches continued to be a key driver of sales growth. This included product extensions to licensed ranges, such as Royal Worcester Wrendale Designs and Sara Miller London Portmeirion, delivering sales expansion on prior year. Heritage ceramic patterns under the Spode brand performed well - Spode Blue Italian was up 18% and Spode Christmas Tree was up 5%. Portmeirion Botanic Garden continued to sell well around the world.

 

Our home fragrance division was up 11.1% with sales growth from Made in England and seasonal ranges.

 

Profit

Profit before taxation was £9.7 million, an increase of £0.9 million on 2017.

 

Operating profit margins improved for the second consecutive year to 11.1% (2017: 10.7%). This was enabled by good control over our cost base and improved customer and product mix.

 

Earnings per share increased from 65.07p to 72.12p per share.

 

Interest and financing costs

Finance costs reduced by £0.2m over the prior year due to lower interest expense on the defined benefit pension scheme deficit and reduced borrowing costs.

 

Taxation

The charge for taxation was £2.0 million (2017: £1.9 million), an effective rate of taxation of 20.8% (2017: 22.0%). The decrease in the effective tax rate relates to the one-time adjustment in deferred tax on our US business in 2017 that does not repeat in 2018.

 

 

 

Dividends

The Board proposes a final dividend of 29.50p per share (2017: 27.26p) giving a total dividend for the year of 37.50p, an increase of 8.2% (2017: 34.66p). This final dividend is expected to be paid on 30 May 2019 to shareholders on the register on 26 April 2019 with an ex-dividend date of 25 April 2019. Our dividend cover increased from 1.85 to 1.93 times and the Board considers this to be a prudent level of cover with a long term target of approximately two times.

 

The Group remains committed to a progressive dividend policy.

 

Cash generation and net debt

At 31 December 2018, net cash was £2.3 million representing a £0.7 million improvement on December 2017 (net cash £1.6 million).

 

This was after new capital investment of £1.1 million, pension deficit contributions of £1.2 million, dividend payments of £3.8 million and tax of £1.6 million. We continue to expect that Portmeirion Group will remain a business that is cash generative.

 

Bank facilities

The Group has agreed debt facilities with Lloyds Bank, totalling £17 million at the balance sheet date. This consists of a £10 million revolving credit facility repayable in full in May 2022, a £2 million overdraft facility on an annual renewal cycle and a £10 million loan repayable equally over 5 years from May 2016, of which £5 million was outstanding at the year end.

 

Our business remains seasonal due to the timing of our sales. We therefore experience a large working capital swing during the year. Our committed funding addresses this and we believe is prudent.

 

Assets and liabilities

Controlling our working capital remains an area of focus for us. Inventory increased in the year from £18.1 million to £19.2 million. This increase was due to the impact of exchange rates on consolidation of our US business as well as increased stock build of key UK manufactured lines in preparation for 2019 orders.

 

During 2018, we paid £1.2 million into our defined benefit pension scheme, which was closed in 1999. Many companies carry defined benefit pension scheme deficits and our deficit is relatively modest. The accounting deficit reduced from £1.7 million at the end of 2017 to £nil in 2018. This improvement was due to our ongoing cash injection and changes to market forward assumptions. We continue to keep this under review.

 

At the end of the year, we held treasury shares with a book value of £0.4 million, in order to satisfy employee share schemes. These shares were originally bought at an average price of £1.87 each equating to 234,607 shares, having used 3,136 during the year. In addition, we also hold 245,523 shares in The Portmeirion Employees' Share Trust ('ESOP shares') to satisfy employees' share options. These ESOP shares have a book value of £2.8 million, having been bought at an average cost of £11.48 each. We increased our ESOP shares by 92,606 during the year.

 

Goodwill and intangibles on our balance sheet represent the value of acquired brands, including Spode, Royal Worcester and Wax Lyrical. The net book value of intangibles reduced in the year by £0.4 million, being the net of the £0.6 million amortisation in the year reduced by £0.2 million of computer software additions.

 

Treasury and risk management

The impact of transactional currency flows on the Group's profit is limited due to natural matching across different regions. Where there is an anticipated material exposure to the Group, then our policy is to use appropriate hedging instruments to mitigate that risk. We have a robust approach to managing risk to deliver our strategy as is explained in our annual report and accounts.

 

Mike Raybould

Group Finance Director        

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2018

 

 

 

Notes

2018

£'000

2017

£'000

 

Revenue

 

3

 

89,594

 

84,769

Operating costs

 

(79,688)

(75,687)

 

Operating profit

 

 

 

9,906

 

9,082

 

Interest income

 

 

 

14

 

17

Finance costs

5

(301)

(487)

Share of results of associated undertakings

 

95

210

 

Profit before tax

 

 

 

9,714

 

8,822

 

Tax

 

 

 

(2,023)

 

(1,944)

 

Profit for the year attributable to equity holders

 

 

 

7,691

 

6,878

 

Earnings per share

 

2

 

72.12p

 

65.07p

 

Diluted earnings per share

 

2

 

71.90p

 

64.79p

 

Dividends paid and proposed per share

 

4

 

37.50p

 

34.66p

 

 

All the above figures relate to continuing operations.

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2018

 

 

 

 

2018

£'000

2017

£'000

 

Profit for the year

 

 

7,691

 

6,878

Items that will not be reclassified subsequently to profit or loss:

 

 

 

Remeasurement of net defined benefit pension scheme liability

 

495

4,428

Deferred tax relating to items that will not be reclassified subsequently to profit or loss

 

 

(84)

 

(753)

Items that may be reclassified subsequently to profit or loss:

 

 

 

Exchange differences on translation of foreign operations

 

680

(767)

Deferred tax relating to items that may be reclassified subsequently to profit or loss

 

 

(33)

 

(57)

Other comprehensive income for the year

 

1,058

2,851

Total comprehensive income for the year attributable to equity holders

 

8,749

9,729

 

 

CONSOLIDATED BALANCE SHEET

31 December 2018  

 

 

 

 

2018

£'000

2017

£'000

 

Non-current assets

 

 

 

 

Goodwill

 

7,229

7,229

Intangible assets

 

5,680

6,058

Property, plant and equipment

 

9,666

10,149

Interests in associates

 

2,567

2,525

Deferred tax asset

 

-

340

Total non-current assets

 

25,142

26,301

 

Current assets

 

 

 

Inventories

 

19,179

18,074

Trade and other receivables

 

15,638

12,431

Cash and cash equivalents

 

7,214

8,487

Total current assets

 

42,031

38,992

 

Total assets

 

 

 

67,173

 

65,293

 

Current liabilities

 

 

 

Trade and other payables

 

(12,025)

(10,556)

Current income tax liabilities

 

(546)

(475)

Borrowings

 

(1,981)

(1,981)

Total current liabilities

 

(14,552)

(13,012)

 

Non-current liabilities

 

 

 

Pension scheme deficit

 

(6)

(1,672)

Deferred tax liability

 

(991)

(882)

Borrowings

 

(2,974)

(4,955)

Total non-current liabilities

 

(3,971)

(7,509)

 

Total liabilities

 

 

 

(18,523)

 

(20,521)

Net assets

 

48,650

44,772

 

Equity

 

 

 

Called up share capital

 

555

554

Share premium account

 

7,310

7,193

Investment in own shares

 

(3,257)

(1,876)

Share-based payment reserve

 

282

550

Translation reserve

 

2,723

2,076

Retained earnings

 

41,037

36,275

Total equity

 

48,650

44,772

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2018

 

 

 

 

 

 

Share

capital

£'000

 

Share

premium

account

£'000

 

Investment in own shares £'000

Share-based payment

reserve

£'000

 

 

Translation

reserve

£'000

 

 

Retained

earnings

£'000

 

 

 

Total

£'000

At 1 January 2017

550

6,624

(2,936)

496

2,900

29,154

36,788

Profit for the year

-

-

-

-

-

6,878

6,878

Other comprehensive income for the year

 

-

 

-

 

-

 

-

 

(824)

 

3,675

 

2,851

Total comprehensive income for the year

 

-

 

-

 

-

 

-

 

(824)

 

10,553

 

9,729

Dividends paid

-

-

-

-

-

(3,433)

(3,433)

Increase in share-based payment reserve

 

-

 

-

 

-

 

66

 

-

 

-

 

66

Transfer on exercise or lapse of options

 

-

 

-

 

-

 

(12)

 

-

 

12

 

-

Shares issued under employee share schemes

 

4

 

569

 

1,094

 

-

 

-

 

(7)

 

1,660

Purchase of own shares

-

-

(34)

-

-

-

(34)

Deferred tax on share-based payment

 

-

 

-

 

-

 

-

 

-

 

(4)

 

(4)

At 1 January 2018

554

7,193

(1,876)

550

2,076

36,275

44,772

Profit for the year

-

-

-

-

-

7,691

7,691

Other comprehensive income for the year

 

-

 

-

 

-

 

-

 

647

 

411

 

1,058

Total comprehensive income for the year

 

-

 

-

 

-

 

-

 

647

 

8,102

 

8,749

Dividends paid

-

-

-

-

-

(3,766)

(3,766)

Increase in share-based payment reserve

 

-

 

-

 

-

 

143

 

-

 

-

 

143

Transfer on exercise or lapse of options

 

-

 

-

 

-

 

(411)

 

-

 

411

 

-

Shares issued under employee share schemes

 

1

 

117

 

1,138

 

-

 

-

 

(6)

 

1,250

Purchase of own shares

-

-

(2,519)

-

-

(2)

(2,521)

Deferred tax on share- based payment

 

-

 

-

 

-

 

-

 

-

 

23

 

23

At 31 December 2018

555

7,310

(3,257)

282

2,723

41,037

48,650

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2018

 

 

 

2018

£'000

2017

£'000

 

Operating profit

 

9,906

 

9,082

Adjustments for:

 

 

Depreciation of property, plant and equipment

1,326

1,329

Amortisation of intangible assets

591

588

Charge for share-based payments

143

66

Exchange gain/(loss)

31

(168)

Profit on sale of tangible fixed assets

(16)

(17)

Operating cash flows before movements in working capital

11,981

10,880

Increase in inventories

(657)

(2,243)

Increase in receivables

(3,005)

(193)

Increase in payables

1,355

1,992

Cash generated from operations

9,674

10,436

Contributions to defined benefit pension scheme

(1,200)

(1,200)

Interest paid

(248)

(247)

Income taxes paid

(1,591)

(2,246)

Net cash from operating activities

6,635

6,743

Investing activities

 

 

Interest received

14

17

Dividend received from associate

115

-

Proceeds on disposal of property, plant and equipment

76

47

Purchase of property, plant and equipment

(879)

(938)

Purchase of intangible assets

(213)

(80)

Net cash outflow from investing activities

(887)

(954)

Financing activities

 

 

Equity dividends paid

(3,766)

(3,433)

Shares issued under employee share schemes

1,250

1,660

Purchase of own shares

(2,521)

(34)

New bank loans raised

3,000

3,000

Repayments of borrowings

(5,000)

(5,000)

Net cash outflow from financing activities

(7,037)

(3,807)

Net (decrease)/increase in cash and cash equivalents

(1,289)

1,982

Cash and cash equivalents at beginning of year

8,487

6,540

Effect of foreign exchange rate changes

16

(35)

Cash and cash equivalents at end of year

7,214

8,487

 

 

NOTES TO THE PRELIMINARY RESULTS

 

 

1.             This announcement was approved by the Board of Directors on 20 March 2019.

 

1.1          The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2018 or 2017, but is derived from those accounts.  Statutory accounts for 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered following the Company's Annual General Meeting.  The auditors have reported on those accounts: their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Sections 498(2) or (3) of the Companies Act 2006.

 

1.2          For the year ended 31 December 2018 the Group has prepared its annual report and accounts in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards).

 

This financial information has been prepared in accordance with the accounting policies stated in the Group's financial statements for the year ended 31 December 2018.

 

The financial statements have been prepared on the historical cost basis, with the exception of derivative financial instruments which are stated at their fair value.

 

1.3          At 31 December 2018 the Group had a net cash balance of £2.3 million and had a bank facility of £17 million.  It manufactures approximately 49% of its products and sources the remainder from third party suppliers.  The Group sells into a number of different markets worldwide and has a spread of customers within its major UK and US markets.

 

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.  Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

 

 

NOTES TO THE PRELIMINARY RESULTS

Continued

 

2.             Earnings per share

 

The calculation of basic and diluted earnings per share is based on the following data:

 

 

Earnings

£'000

2018

Weighted

average

number of

shares

Earnings

per share

(pence)

Earnings

£'000

2017

Weighted

average number of

shares

Earnings

per

share

(pence)

Basic earnings per share

7,691

10,664,531

72.12

6,878

10,570,942

65.07

Effect of dilutive securities:

employee share options

 

-

 

32,746

 

-

 

-

 

45,459

 

-

Diluted earnings per share

7,691

10,697,277

71.90

6,878

10,616,401

64.79

 

 

 

3.             Segmental reporting

 

The following tables provide an analysis of the Group's revenue by operating segment and geographical market, irrespective of the origin of the products:

 

 

Operating segment

2018

£'000

2017

£'000

 

Portmeirion UK - ceramic

 

48,141

 

46,146

Portmeirion USA - ceramic

25,988

24,700

Home fragrance

15,465

13,923

 

89,594

84,769

 

 

 

Geographical market

2018

£'000

2017

£'000

 

United Kingdom

 

31,487

 

28,836

United States

26,669

25,156

South Korea

8,229

6,604

Rest of the World

23,209

24,173

 

89,594

84,769

 

 

 

 

NOTES TO THE PRELIMINARY RESULTS

Continued

 

4.             Dividends

 

The Directors recommend that a final dividend for 2018 of 29.50p (2017: 27.26p) per ordinary share be paid, subject to shareholders' approval, on 30 May 2019 to shareholders on the register on 26 April 2019.  The total dividend paid and proposed for the year is 37.50p (2017: 34.66p) per share.

 

5.             Finance costs

 

2018

£'000

2017

£'000

 

Interest paid

 

260

 

313

Realised losses on financial derivatives

12

4

Net interest expense on pension scheme deficit

29

170

 

301

487

 

 

 

6.             Reconciliation of earnings before interest, tax, depreciation and amortisation (EBITDA)

 

2018

£'000

2017

£'000

 

Operating profit

 

9,906

 

9,082

Add back:

 

 

Depreciation

1,326

1,329

Amortisation

591

588

Earnings before interest, tax, depreciation and amortisation

11,823

10,999

The accounts for the year ended 31 December 2018 will be posted to shareholders on or before 12 April 2019 and laid before the Company at the Annual General Meeting on 16 May 2019.  Copies will be available from the Company Secretary at Portmeirion Group PLC, London Road, Stoke-on-Trent, Staffordshire, ST4 7QQ, or from the website www.portmeiriongroup.com.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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