Portmeirion Group has provided the update ahead of its year end on 31 December as results are set to be below market expectations.
The group expects FY24 revenue to be circa £90m, and profit before tax to be £1m. This is below market expectations due to supply delays in the key Christmas period; continued destocking in South Korea; and challenging and unpredictable market conditions.
Despite the short term challenges, the group remains confident in the the medium term outlook.
The statement said that both the UK and US markets have been impacted by political and macroeconomic developments. While consumer demand and pull through in both regions were up across the key thanksgiving and Black Friday period, overall sales and replenishment across October and November 2024 were below expectations.
Mike Raybould, chief executive, commented: “Consumer confidence and spending levels remain challenging across our key markets of the US, Asia and UK. In South Korea, we have made progress in reducing high stock levels, but weak consumer and retailer confidence continue to impact trading in this region. Amidst challenging macroeconomic conditions we are encouraged by ongoing growth in online platforms with online data showing our ranges are retaining their strong market share position.
“We took action at the start of the year to reduce our overhead base by circa £4 million (circa 10%) which will give us a leaner cost base from which to grow profits as consumer markets improve. The impact of lower sales in South Korea and the resulting lower utilisation of our UK tableware factory has had an adverse impact on 2024 profitability, excluding which, overall Group net profitability would be significantly up on 2023.
“We are also pleased to see the ongoing improved performance in our Wax Lyrical division. We are excited about the medium and long term opportunity across our portfolio to grow sales in ROW international sales markets and believe the market share gains and new listings won in the US over the last three years will allow sales in these markets to rebound as consumer confidence returns.
“We believe in the strength of the underlying consumer demand for our brands and the opportunity to further leverage them across all markets. Demand for our Spode brand continues to grow across key markets, including the US, reflecting the focus on new product, expanding distribution of our well known ‘Spode Christmas Tree ‘ range and online marketing. We are delighted with the success of our recent ‘Blue & White Christmas’ campaign featuring Jack Kinsey, a local interior designer, whose Instagram reels have already amassed over 8 million views since launch a few weeks ago. Spode sales are already up over 35% over pre Covid levels and we see great opportunity for strong future growth over the coming years.
“Whilst we expect the near-term market outlook to remain uncertain, we continue to focus on what we can control and are confident we can further strengthen our business model and ability to maintain and grow market share across our key markets.”
