Profit warning for Wax Lyrical owner

Cracks have started to appear in the performance of pottery manufacturer Portmeirion, just weeks after its record results were in sharp contrast to job cuts elsewhere in the sector.

The Wax Lyrical and Royal Worcester producer has issued a profit warning after export sales to key markets including South Korea since the start of the year were much lower than expected.

Portmeirion said total group sales for the first four months of the year are down 10% against the comparative period last year.

In a statement to the stock market, it said: “While the total effect on group sales is expected to be less than that for the full year, the board now expects profit before taxation for the full year will be significantly below market expectations.”

Nine weeks ago it revealed annual figures which showed a tenth consecutive year of growth, resulting in record revenues and profits. This was in sharp contrast to recent news from other pottery firms, with 300 jobs lost when Dudson collapsed into administration and 103 jobs cut at Wedgwood.

In late March Portmeirion still expected trading to be in line with expectations, and chairman Dick Steele said “we look forward into 2019 with confidence”.

Despite good sales growth in its two largest markets – the UK is up 5% and the US up 8% against the prior period last year – sales, particularly for Korea, have been lower than expected.

The group said: “We have been working with our Korean distributor on new product development during 2019 which we see as critical to protect and grow this market for the long term.

“However this new product development, by nature, will take time to bring to market and optimise for manufacturing efficiency.”

The company added that it does not expect that this will lead to a change in its expectations for dividend payments in the current year.

“We believe our long term strategy is the right one and are pleased with the progress we are making in other areas to protect and grow our brand portfolio.”

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