Final Results

Portmeirion Group PLC 18 March 2002 PRESS RELEASE 18 MARCH 2002 PORTMEIRION GROUP PLC RESULTS FOR YEAR ENDED 31ST DECEMBER 2001 CHAIRMAN'S STATEMENT Financial Highlights: 2001 2000 Decrease £000's £000's % Turnover 29,626 30,727 3.6 Profit before tax 1,623 3,351 51.6 Basic earnings per share 9.63p 23.18p* 58.5 Dividends per share 13.25p 13.25p - * Restated. See notes 2 and 3 Sales for the year were £29.626m., 4% below the previous year. The profit before tax was £1.623m., which compares with £3.351m. in the previous year, a decline of 52%. Basic earnings per share were 9.63p, which compares with 23.18p (restated) in the previous year. The Board is recommending a final dividend of 9.95p. bringing the total to 13.25p. for the year. This is unchanged from 2000. The year has been badly affected by two external influences. In the UK, sales were adversely affected in the first half by a reduction in the number of overseas visitors due to the foot and mouth epidemic. Sales in the USA, which previously accounted for 44% of total Group sales, were adversely affected by the major destocking programme undertaken by our major department store customers. As a result Group sales at the half-year were 9% down on the previous year. After a slow first half, we were then badly affected by the events of September 11th, as were many companies in the industry. Despite this, there was a steady and sustained recovery in the second half, led by strong sales growth in the UK and the Far East. Overall second half sales were 1% above the same period last year so that the sales shortfall for the year was reduced to 4% compared to the previous year. Annual sales in the USA fell by 12%, but this was offset by a commendable increase in the UK of 5%. Our strategy of developing the Far East market is also now showing rewards, with sales 49% above the previous year. Clearly we have the opportunity for further substantial growth in this area and our long-term commitment to achieve this is demonstrated by the establishment of our subsidiary, Portmeirion Japan. Complementing the second half sales improvement, the manufacturing gross profit margin for the second half was an impressive 2 percentage points better than that for the first half, and I believe this improvement will be maintained. These underlying improvements have continued into the New Year and, given the strength of our balance sheet, the Board feels justified in maintaining the dividend. The events of last year have not in any way diminished our commitment to the Group's product strategy. The diversification into associated home-ware and gift products under the Portmeirion Brand, together with new and innovative ceramic ranges, continues. We introduced the revolutionary Starfire range into our gift offer in the autumn, and new ranges will be introduced during this year to sustain our growing reputation for creative design. We are now firmly established in the glassware, home textiles and candle markets, with combined sales of £ 3.1m. The Board will consider acquisitions as a way of increasing market share in any of these markets if suitable opportunities can be identified. Emphasis on excellent design and quality has enabled the Group to continue to produce its ceramic ranges in Stoke-on-Trent. The constant drive for improved efficiency and productivity is never ending, and will be backed by capital expenditure focused on our ceramic manufacturing plants. The whole management team and workforce, now under the leadership of Lawrence Bryan, Chief Executive Officer, have responded magnificently to the challenges that were imposed upon the Group in 2001. The team in our New York office showed remarkable fortitude in getting back to business during September. I would like to thank everyone for their contribution and I have every confidence in their ability to continue the Group's successful development. Given the economic uncertainties with which we are faced, I believe it is appropriate to be cautious about the prospects for 2002. However, we have started the year with sales continuing to improve, and a cost base that takes account of those economic uncertainties. Given a steady improvement in the USA market, now that the major retailers have largely finished de-stocking, I expect a reasonable recovery in Group prospects this year. Arthur Ralley Chairman 18th March 2002 PORTMEIRION GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31st December 2001 Notes 2001 As restated £000's 2000 £000's Turnover - continuing operations 5 29,626 30,727 Raw materials and operating costs (28,492) (27,958) Operating profit - continuing operations 1,134 2,769 Share of profit of associated undertakings 245 254 Interest receivable and similar income 244 328 Profit on ordinary activities before 1,623 3,351 taxation Taxation on profit on ordinary activities (623) (943) Profit on ordinary activities 1,000 2,408 after taxation being the profit for the financial year Dividends (1,377) (1,377) Retained (loss)/profit for the financial (377) 1,031 year Earnings per 3 9.63p 23.18p share Diluted earnings per share 3 9.61p 23.16p Dividend per 4 13.25p 13.25p share PORTMEIRION GROUP PLC CONSOLIDATED BALANCE SHEET As at 31st December 2001 2001 As restated 2000 £000's £000's £000's £000's Fixed assets Tangible assets 8,952 9,119 Investments 1,453 1,262 10,405 10,381 Current assets Stocks 7,591 6,574 Debtors 6,110 5,536 Cash at bank and in hand 5,205 7,138 18,906 19,248 Creditors: amounts falling due within one year (4,851) (4,950) Net current assets 14,055 14,298 Total assets less current liabilities 24,460 24,679 Provisions for liabilities and charges (192) (203) Net assets 24,268 24,476 Capital and reserves Called up share capital 519 519 Share premium account 4,536 4,536 Profit and loss account 19,213 19,421 Equity shareholders' funds 24,268 24,476 PORTMEIRION GROUP PLC CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2001 Notes 2001 2000 £000's £000's Cash flow from operating 7 1,252 2,255 activities Dividends received from - 118 associates Returns on investments and servicing of finance 8 244 315 Taxation (1,018) (826) Capital expenditure and financial investment 8 (1,034) (920) Equity dividends paid (1,377) (1,377) Cash outflow before use of liquid resources (1,933) (435) and financing Management of liquid resources 1,350 (1,125) Decrease in cash in the year 6 (583) (1,560) Reconciliation of net cash flow to movement in net funds 2001 2000 £000's £000's Decrease in cash in the year (583) (1,560) Cash (inflow)/outflow from (decrease)/increase (1,350) 1,125 in liquid resources Net funds at 1st January 7,138 7,573 Net funds at 31st December 5,205 7,138 PORTMEIRION GROUP PLC STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2001 As restated £000's 2000 £000's Profit for the financial year 1,000 2,408 Currency translation 169 81 differences Total recognised gains and losses for the financial 1,169 2,489 year Prior year adjustment (645) - Total recognised gains and losses since the last annual 524 2,489 report RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2001 As restated £000's 2000 £000's Profit for the financial year 1,000 2,408 Dividends (1,377) (1,377) Currency translation 169 81 differences Net (reduction)/addition to shareholders' funds (208) 1,112 Opening shareholders' funds, originally £25,121,000 before 24,476 23,364 prior year adjustment of £645,000 Closing shareholders' funds 24,268 24,476 PORTMEIRION GROUP PLC NOTES 1. The financial information set out above does not constitute the Company's statutory accounts for the years ended 31st December 2001 and 2000 but is derived from those accounts. Statutory accounts for 2000 have been delivered to the Registrar of Companies, contain an unqualified audit opinion and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. Statutory accounts for the year ended 31st December 2001 on which the auditors have given an unqualified opinion and do not contain a statement under Section 237(2) or (3) of the Companies Act 1985 will be delivered to the Registrar of Companies in due course. This announcement was approved by the Board of Directors on 15th March 2002. 2. Adoption of Financial Reporting Standard No. 19 'Deferred Tax' has required a change in the policy of accounting for deferred tax. As a result the comparative figures for 2000 have been restated resulting in a cumulative decrease in opening reserves as at 1 January 2000 of £748,000. The tax on profit on ordinary activities for 2000 has been restated from the previously reported amount of £1,046,000 to £943,000, resulting in a net credit to the profit and loss account of £103,000 and a net reduction in closing reserves at 31 December 2000 of £645,000. The impact of adopting FRS 19 on the 2001 results is a decrease in the tax charge of £41,000. 3. Earnings per share Basic The basic earnings per share is calculated by dividing the profit after taxation of £1,000,000 (2000 - £2,408,000 as restated) by the weighted average number of Ordinary shares in issue during the year of 10,389,230 (2000 - 10,389,230). Diluted The diluted earnings per share is calculated in accordance with Financial Reporting Standard 14. This calculation uses a weighted average number of Ordinary shares in issue adjusted to assume conversion of all dilutive potential Ordinary shares and is show below: Earnings 2001 Earnings Earnings As restated Earnings £ Weighted Per Share £ 2000 per Share Number of (Pence) Weighted (Pence) Shares Number of Shares Basic earnings per share 1,000,000 10,389,230 9.63 2,408,000 10,389,230 23.18 Effect of dilutive securities: 15,889 9,799 Employee share options Diluted earnings per share 1,000,000 10,405,119 9.61 2,408,000 10,399,029 23.16 4. The Directors propose the payment of a final dividend of 9.95p (2000 - 9.95p) per Ordinary share on 27 May 2002 to shareholders registered on 3 May 2002 5. Turnover by destination 2001 2000 £000's £000's United Kingdom 12,576 11,941 North America 12,625 14,429 European Union 2,006 2,501 Far East 1,721 1,155 Rest of the World 698 701 29,626 30,727 6. Analysis of net funds 2000 Cash flow 2001 £000's £'000's £000's Cash in hand, at bank 1,128 (583) 545 Short term money market deposits 6,010 (1,350) 4,660 Total 7,138 (1,933) 5,205 7. Reconciliation of operating profit to operating cash flows. 2001 2000 £000's £000's Operating profit 1,134 2,769 Depreciation 1,217 1,234 Exchange gain 134 66 Profit on sale of tangible fixed assets (16) (25) Increase in stocks (1,017) (398) Increase in debtors (413) (1,525) Increase in creditors 213 134 Net cash inflow from operating activities 1,252 2,255 All of the above relate to continuing operations 8. Analysis of cash flows for headings netted in the cash flow statement 2001 2000 £000's £000's Returns on investments and servicing of finance Interest received 244 315 Net cash inflow for returns on investments and servicing of finance 244 315 Capital expenditure and financial investment Purchase of tangible fixed assets (1,158) (1,062) Sale of tangible fixed assets 124 142 Net cash outflow for capital expenditure and financial investments (1,034) (920) For further information contact Arthur Ralley (Chairman), Brett Phillips (Finance Director) on; 01782 744 721 This information is provided by RNS The company news service from the London Stock Exchange

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