- 2023 downgraded profit guidance achieved
- 2024 profit rebound reined in
Stoke-on-Trent-based Portmeirion (PMP: 235p), a leading British ceramics manufacturer and retailer, has hit downgraded profit guidance for 2023, but reined in the scale of the profit rebound in 2024.
In 2023, ceramic sales were flat in the UK, but fell in North America and South Korea due to weaker consumer sentiment and de-stocking by major retail customers, as previously announced. North America is the biggest overseas market, generating more than a third of sales.
Last year, revenue was down 8 per cent to £102mn, but the reduction in pre-tax profits (from £8mn to £3mn) was more pronounced due to the operational leverage of the business and the impact of the rising interest rates on the finance charge. The directors expect another challenging year ahead, especially in North American and Korean markets. Combined with a higher interest charge, Shore Capital now expects 2024 pre-tax profit to rise by 50 per cent to £4.5mn, rather than double to £6mn, on revenue of £105mn.
On this basis, the shares trade 50 per cent below book value, on a price/earnings (PE) ratio of 9.3, and offer a 6.6 per cent dividend yield. Although the payout is safe as gearing is only 11 per cent, overseas headwinds need to abate for a share price recovery. Hold.
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