Portmeirion secures £30m facility as sales plummet in South Korea
Portmeirion, the manufacturer, designer and distributor of homewares has secured a new £30m revolving credit facility with Barclays.
The four-year plus one term is set to consolidate and simplify the brand’s borrowing structure and provide more working capital headroom for the future. It’s replacing Portmeirion’s previous facilities totalling £24.5m.
In its interim results for the first half of 2024, Stoke-based Portmeirion reported a 17% decrease in revenue to £36.6 million, after a major drop in sales in South Korea.
Following an “abnormally” high first half in 2023, South Korea sales were down 61%, with softer consumer spending compounded by significant de-stocking by distributors and retailers. Outside of South Korea, sales were up 5%.
Portmeirion’s cost restructuring is on track to deliver £4m lower overheads in FY24, as it looks to grow operating margins in the short and long term. It saw a headline loss before tax1 of £2m (H1 2023: £0.0m) which was in line with the board’s expectations.
In January, the firm was looking to cut 35 staff as it expected 2024 to be a “challenging year”.
Staff were to be axed from its Stoke operations team due to “ongoing macro uncertainty with customers remaining cautious” particularly in the US and Korean markets, despite experiencing a “positive Christmas”.
Mike Raybould, Chief Executive, commented: “We are pleased with the sales and gross margin growth in the US, our largest sales market. We have added new distribution in the US in the last 6 months and are confident that as the macroeconomics improve that we will see the benefit in our top line sales.
“Similarly, we continue to take market share in the UK Grocery channel with our new Wax Lyrical home fragrance ranges and with further new major listings since the half year, our factory in Cumbria continues to successfully ramp up production levels and efficiency.
“As previously indicated, the Group has seen reduced order flow in H1 2024 from our South Korean market as high levels of stock take time to sell through. However, we are encouraged that our brands continue to be in high demand in this market as evidenced by growing online sales and that our Botanic Garden tableware range remains in the top two for all online brand searches. Furthermore, we are accelerating new product launches to help support this market in the short term.
“Our brands continue to resonate globally and with a healthy Christmas order book, we are currently trading in line with board expectations and are on track to meet Full Year market expectations.”
