Portmeirion reports fall in sales as markets begin to recover
By Josh White
Date: Wednesday 15 Jul 2020
(Sharecast News) - Homewares designer and manufacturer Portmeirion Group reported an 8% slide in sales in its first half on Wednesday, to £32m, with its like-for-like sales excluding the Nambé acquisition down 20%.
The AIM-traded firm said that as a result of the Covid-19 pandemic, the closure of retail stores globally since March had "significantly impacted" its sales, although that had been partially negated by "significant growth" in online sales, and by converting some of its production capabilities in its Wax Lyrical home fragrance factory to hand sanitiser.
As its key markets began to re-open, the company said it was now seeing an improving positive trend, resulting in like-for-like sales in June being down 9% on the same period last year.
The firm's own ecommerce sales in its core UK and United States markets increased over 90% in the first half, and over 100% in the second quarter, year-on-year.
Portmeirion said it was expecting to report a low-single-digit million sterling loss before tax for the first half of 2020, swinging from a £0.5m profit in the prior year.
"Our business has a significant second half weighting in sales and particularly profit generation," the board said in its statement.
"We are currently seeing good order intent from customers for our key seasonal trading period and assuming no further Covid-19 disruption and the trend of improved month on month trading continues, we are confident that we will return to profitability in the second half of 2020."
The directors noted the completion of an equity raise in June, which would be used to fund and accelerate a number of growth opportunities, including its online sales channels, extending Wax Lyrical's product lines, and building a "more significant presence" in Canada.
It said the balance sheet remained "strong", and excluding the benefit of net proceeds from the equity raise of £11.2m, the company said it reduced net debt to just over £10m, from the 31 December level of £12.3m.
In addition, it had unutilised bank facilities of £15m.
"Given the backdrop of total retail lockdowns around the world for over three months, we are very pleased with our sales performance in the first half and are encouraged by the improving trend we saw in June," said chief executive officer Mike Raybould.
"Although there remains considerable economic uncertainty in our key markets, we are cautiously optimistic for the second half of 2020.
"Our brands have over 700 years of combined history and I would like to thank our employees around the world for their great resilience and agility in coping with the challenges the virus has thrown at us."
Raybould said the company's priority remained the health and safety of its staff, customers and suppliers.
"We have continued to increase our investment in our growth strategy including our new product pipeline and online strategy and I believe we will see the benefit from this in the coming months and years."
Portmeirion said it was expecting to announce its interim results for the six months ended 30 June on 24 September.
At 1330 BST, shares in Portmeirion were up 2.65% at 368.5p.
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