Final Results

Portmeirion Group PLC
02 April 2008


2 April 2008


              PORTMEIRION GROUP PLC ('Portmeirion' or 'the Group')

            Preliminary Results for the Year Ended 31 December 2007



Financial summary
                                                                         2007             2006        Increase
                                                                        £'000           £'000                %


Revenue                                                                32,017           28,422             12.6
Pre-tax profit before exceptional items *                               3,411            2,964+            15.1
Pre-tax profit after exceptional items *                                4,419            2,687+            64.5
Basic earnings per share                                                30.77p          17.81p+            72.8
Dividends paid and proposed per share in respect of the year            14.70p          14.00p              5.0

+ Restated to reflect the adoption of IFRS.
* See note 5



Highlights:



Financial - revenues hit an all-time record.

•   Total paid and proposed dividend for the year increased by 5.0% to 14.70p 
    (2006 - 14.00p).

•   Revenue increased by 12.6% to £32.0 million (2006 - £28.4 million).

•   Proposed final dividend of 11.15p per share (2006 - 10.70p per share).

•   Profit before exceptional items and tax increased 15.1% to £3,411,000
    (2006 - £2,964,000).

•   Profit before taxation of £4,419,000 (2006 - £2,687,000)

•   Earnings per share up by 72.8% to 30.77p (2006 - 17.81p).

•   Export revenue up by 13.6%.

•   UK revenue up by 10.4%.



Operational

•   New 60,000 sq.ft. warehouse at Trentham Lakes now fully operational.

•   Botanic Garden, the highly popular casual dining collection worldwide, 
    remains the best selling range accounting for over half of revenue.

•   189% growth in sales of contemporary ranges such as Sophie Conran and
    Totally Tracy.

•   Continued development of overseas sourcing to supplement Stoke-on-Trent 
    production and meet growing global demand.

•   New warehousing facilities planned for 2008 in USA to accommodate increased 
    sales volume.



Dick Steele, Non-executive Chairman commented:

'We are delighted with these results, especially given the backdrop of a weak
retail environment, which reflect the operational improvements we have
implemented during the year.  Our heritage ranges have continued to sell into
new markets and at increased levels, and the contemporary ranges such as Sophie
Conran continued to grow both in the level of sales and in range of products.

Importantly, in the coming year we will continue to invest in our operational
and distribution capabilities and expect to see the greater cost benefits this
will deliver.  Through continued new product development and range extensions we
plan to drive sales forward both internationally and domestically.

Current trading remains strong and we are well positioned to deliver further
growth and shareholder value in 2008.'





ENQUIRIES:


Portmeirion Group PLC:

Dick Steele, Non-executive Chairman        01782 744721    [e-mail]

Brett Phillips, Group Finance Director     01782 744721    [e-mail]


Pelham Public Relations:

Alex Walters                               020 7743 6674   [e-mail]

Kate Catchpole                             020 7743 6674   [e-mail]


KBC Peel Hunt Ltd (Nomad)

David Anderson                             020 7418 8900   [e-mail]

Richard Newman                             020 7418 8900   [e-mail]









Portmeirion Group PLC

Business Review



Dividend

The Board is recommending a final dividend of 11.15p bringing the total paid and
proposed for the year to 14.70p, an increase of 5% compared to 2006.  We firmly
believe that the value and strength of a company lies in its ability to generate
long term returns for shareholders.  Since we first went onto the Stock Market
at an issue price of £1.80 in November 1988, we have paid dividends totalling
£2.22 per share, including the final proposed 2007 dividend.

The dividend will be paid, subject to shareholders' approval, on 23 May 2008, to
shareholders on the register at the close of business on 25 April 2008.



Results for the year

Revenue of £32 million in 2007 was an all time record for Portmeirion. The
pre-exceptional profit before tax increased by 15.1% to £3.411 million (2006:
£2.964 million). Our sales increase was even higher in real terms as our sales
from Portmeirion USA are transacted in US dollars, and for 2007 we have
translated our dollar sales at $2.0022/£ whereas in 2006 we translated at
$1.8424/£. At constant exchange rates our sales increase would have been 16.3%
rather than the 12.6% reported figure.

As stated last year, we have enjoyed a pre-tax exceptional credit on the
disposal of a freehold site, which has been partly offset by exceptional charges
in respect of the opening of the new UK warehouse.

Cash generation was strong during the year, enabling us to invest some £1.5
million in capital expenditure, mainly in the new warehouse but also in our
production facilities in Stoke. Because of the major change to our warehousing
facilities, stock absorbed more cash during the year.  Stock balances should
move towards optimum levels in 2008. We finished the year with cash balances of
£2.7 million, a £2.5 million reduction on 2006.

Our pension scheme deficit, net of deferred tax, is £1.8 million under IAS19, a
decrease of £2.2 million over 2006.  We made a cash contribution of £0.348
million to our final salary scheme, closed in 1999, during the year.

The Groups' three largest markets are the United States - 38% of sales (2006:
39%), United Kingdom - 29% of sales (2006: 30%) and South Korea - 17% of sales
(2006: 20%). Both the US and the UK provided increases compared to 2006,
although as stated earlier the United States increase is depressed by the
translation rate of the US dollar.  The Group now has broad equivalence between
US dollar receipts and payments, so we are less subject to real foreign exchange
differences, although translation differences will still affect reported
figures.



Product design and development

We are widely recognised by our heritage ranges - Botanic Garden, Pomona and
Holly & Ivy, these are strengths of the Group.  Increasingly we are becoming
known for our contemporary designs such as Sophie Conran and Totally Tracy, and,
since 2006, for Pimpernel.  We continue to build upon all our successful ranges
and to develop new ones.

Our new product pipeline is now stronger, more diverse and more commercial than
at any time during the Group's history.  It seeks to serve a number of different
consumer markets, United States, United Kingdom and South Korea being our three
largest.  To serve such markets we have to have a global outlook and global
sourcing feeding into a centralised product development department based in
Stoke-on-Trent. We spend approximately 3% of revenue on design and development.



Manufacturing and sourcing

We are committed to our presence in Stoke-on-Trent, where approximately
two-thirds of our product is manufactured.  We have a skilled and loyal
workforce here and a significant investment in manufacturing.  Nevertheless, we
operate in global markets which demand globally sourced products and prices.  It
is likely that the percentage of our sales which is manufactured abroad will
increase over the years, but it is also likely that our volumes through our
Stoke factory will be maintained.  To achieve these aims we look to increase
sales.

We are constantly striving to increase the efficiency and capabilities of our
Stoke factory, and indeed of our manufacturing partners overseas.  Efficiencies
at Stoke have continued to improve in 2007.



Warehousing

We opened our new warehouse at Trentham Lakes in Stoke-on-Trent in September
2007. This was a huge undertaking and it took longer than planned to get the new
warehouse operating at an optimum level, with some loss of revenue.  Any
commissioning problems are now behind us and we go forward confidently with
greater flexibility in terms of customer service.

We are intending to undertake a similar warehouse move in the USA in 2008 in
order to accommodate the increasing volumes in that market and the increasing
demands of our customers.



Environment

The Group recognises the importance of its environmental responsibilities,
monitors its impact on the environment and designs and implements policies to
reduce damage that might be caused by the Group's activities. Initiatives
designed to reduce the Group's impact on the environment include the recycling
of manufacturing waste, reducing its carbon emissions and utilisation of
recyclable packaging materials.

Examples of our environmental commitment include recycling our fired ceramic
waste in ceramic tiles produced by a local manufacturer and recycling our used
plaster of paris moulds in the cement industry.  As part of our continuing
commitment to recycling we are investigating the feasibility of using our
unfired ceramic waste (our only major waste stream currently not recycled) as a
raw material component in the brick industry.

Portmeirion's commitment to reducing our carbon emissions is evidenced by our
being party to a Climate Change Agreement since 2000. During this period,
Portmeirion has reduced its Specific Primary Energy Consumption from 34,522 kWh/
tonne to the level, in 2007, of 22,558 kWh/tonne.  This represents an
improvement in energy efficiency of 35% and a reduction in CO2 emissions of
12,344 tonnes, a 12% reduction.



Corporate Governance

As an AIM listed company we are not subject to the full rigour of the corporate
governance regime, nevertheless we comply more fully than required using the
rules which apply to fully listed companies as guidance.  We have deliberately
chosen not to extend our Board by the addition of another non-executive
director, nor to shuffle the committee positions around in line with what would
constitute full compliance, as we consider that to do so would be of no
significant benefit to shareholders.



Outlook

The Group will continue with its established policies for growth.  We will focus
on developing the brand with the emphasis on product design and development,
particularly contemporary ranges and continued extensions to our heritage
patterns.  Commercial design is at the heart of everything we do.  We will use
vigorous efforts to expand our existing customer base worldwide and continue to
look for new retail outlets in the UK.

In 2008 we will be focusing specifically on maximising the benefits from our new
UK warehouse and bringing our stock to more optimum levels, realising the full
benefits from the Pimpernel brand and on the efficient move of our US warehouse
to larger premises.

In summary, we will continue to drive growth in sales, return on sales and
dividend payments.

Current trading remains strong and we are well positioned to deliver further
growth and shareholder value in 2008.






Richard Steele                                   Lawrence Bryan

Non-executive Chairman                           Chief Executive




CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2007




                                                                     Notes   2007             2006
                                                                             £'000            £'000

                                                                                              


Revenue                                                                4     32,017           28,422
Operating costs                                                              (28,665)         (25,747)

Operating profit before exceptional items                                    3,352            2,675

Exceptional items                                                      2     1,008            (277)

Operating profit after exceptional items                                     4,360            2,398

Investment revenue                                                           142              231
Finance costs                                                                (242)            46
Share of profit of associated undertakings                                   159              58
Impairment in investment in associated undertaking                           -                (46)
Profit before tax                                                            4,419            2,687

Tax                                                                    6     (1,393)          (938)

Profit for the year attributable to equity holders of the parent             3,026            1,749


                                                                                    
Earnings per share                                                     3     30.77p           17.81p
                                                                       
Diluted earnings per share                                             3     29.55p           17.58p
                                                                       
Dividends paid and proposed per share                                  7     14.70p           14.00p



All the above figures relate to continuing operations.


CONSOLIDATED BALANCE SHEET
As at 31 December 2007




                                                                              2007            2006
                                                                             £'000           £'000 

Non-current assets
Intangible assets                                                            631              628
Property, plant and equipment                                                6,353            5,767
Interests in associates                                                      1,387            1,332
Deferred tax asset                                                           396              1,663
Total non-current assets                                                     8,767            9,390


Current assets
Inventories                                                                  9,581            8,352
Trade and other receivables                                                  6,630            4,467
Cash and cash equivalents                                                    2,708            5,203
Derivative financial instruments                                             -                105
Assets held for sale                                                         -                350
Total current assets                                                         18,919           18,477


Total assets                                                                 27,686           27,867


Current liabilities
Trade and other payables                                                     (4,487)          (5,328)
Current income tax liabilities                                               (121)            (246)
Total current liabilities                                                    (4,608)          (5,574)


Non-current liabilities
Pension scheme deficit                                                       (2,498)          (5,707)
Total non-current liabilities                                                (2,498)          (5,707)


Total liabilities                                                            (7,106)          (11,281)
Net assets                                                                   20,580           16,586


Equity
Called up share capital                                                      528              523
Share premium account                                                        4,820            4,657
Treasury shares                                                              (1,266)          (1,266)
Share based payment reserve                                                  91               38
Hedging and translation reserves                                             (457)            (502)
Retained earnings                                                            16,864           13,136
Total equity                                                                 20,580           16,586





CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2007

                                                                             2007             2006
                                                                             £'000            £'000


Operating profit after exceptional items                                     4,360            2,398
Adjustments for:
Depreciation                                                                 671              710
Amortisation of intangible fixed assets                                      154              56
Contributions to defined benefit pension scheme                              (348)            (348)
Charge for share based payments                                              53               26
Exchange loss                                                                (61)             (328)
Profit on sale of tangible fixed assets                                      (1,795)          (16)
Operating cash flows before movements in working capital                     3,034            2,498
Increase in inventories                                                      (1,229)          (2,439)
(Increase)/decrease in receivables                                           (2,020)          382
(Decrease)/increase in payables                                              (841)            2,290
Cash (absorbed by)/generated from operations                                 (1,056)          2,731
Interest paid                                                                (4)              (1)
Income taxes paid                                                            (1,141)          (306)
Net cash from operating activities                                           (2,201)          2,424
Investing activities
Dividend received from associate                                             83               -
Interest received                                                            132              304
Proceeds on disposal of property, plant and equipment                        2,257            32
Purchase of property, plant and equipment                                    (1,379)          (1,676)
Purchase of intangible fixed assets                                          (157)            (607)
Purchase of treasury shares                                                  -                (302)
Purchase of equity interest                                                  -                (40)
Net cash inflow/(outflow) from investing activities                          936              (2,289)
Financing activities
Equity dividends paid                                                        (1,398)          (1,305)
Shares issued under employee share schemes                                   168              79
Net cash outflow from financing activities                                   (1,230)          (1,226)
Net decrease in cash and cash equivalents                                    (2,495)          (1,091)
Cash and cash equivalents at beginning of year                               5,203            6,294
Cash and cash equivalents at end of year                                     2,708            5,203




CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the year ended 31 December 2007

                                                                             2007             2006
                                                                             £'000            £'000


Exchange differences on translation of foreign operations                     41              (498)
Actuarial gain/(loss) on defined benefit pension scheme                      2,988            (1,858)
Deferred tax on pension deficit                                              (951)            557
Net expense recognised directly in equity                                    2,078            (1,799)


Transfers
Transferred to profit or loss on cash flow hedges                            6                125
Tax on transfers to profit or loss on cash flow hedges                       (2)              (37)
                                                                             2,082            (1,711)
Profit for the year                                                          3,026            1,749
Total recognised income and expense for the year                             5,108            38

attributable to equity holders of the parent




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1.   This announcement was approved by the Board of Directors on 1 April 2008.
     

1.1  The financial information set out above does not constitute the Company's 
     statutory accounts for the years ended 31 December 2007 and 2006 but is 
     derived from those accounts.  Statutory accounts for 2006 which 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 31 December 2007 
     on which the auditors have given an unqualified opinion and which 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.

1.2  Prior to 2007 the Group prepared its audited financial statements under 
     United Kingdom Generally Accepted Accounting Principles (UK GAAP).  For
     the year ended 31 December 2007 the Group has prepared its annual 
     consolidated financial statements in accordance with accounting standards 
     adopted for use in the European Union (International Financial Reporting 
     Standards (IFRS)).

These financial statements have been prepared in accordance with the accounting
policies stated in the Interim Statement for the six months ended 30 June 2007,
taking into account the requirements and options in IFRS 1 'First-time adoption
of International Financial Reporting Standards'.  The transition date for the
Group's application of IFRS is 1 January 2006 and the comparative figures for 31
December 2006 have been restated accordingly.

The financial statements have been prepared on the historic basis, except that
derivative financial instruments are stated at their fair value.



2.   Exceptional items

Included in exceptional items are profit or loss on the sale of land and
buildings and costs associated with leasehold property not yet operational or no
longer required by the business including rent-free periods granted on
sub-letting.  Additional labour costs incurred in moving to and setting up the
new warehouse and redundancy costs have also been included as exceptional.  The
analysis of exceptional items is as follows:

                                                                    2007             2006
                                                                    £'000            £'000

Profit on sale of freehold land & buildings                         1,783            -
Costs associated with assignment of leasehold property              (126)            -
Redundancy costs                                                    (108)            (277)
Costs associated with implementation of new warehouse               (541)            -
                                                                    1,008            (277)



3.   Earnings per share

The calculation of the basic and diluted earnings per share is based on the
following data:


                                   Earnings         2007    Earnings       Earnings               2006         Earnings
                                          £     Weighted   Per Share              £           Weighted        Per Share
                                               Number of     (Pence)                         Number of          (Pence)
                                                  Shares                                        Shares

Basic earnings per share          3,026,000    9,832,804       30.77      1,749,000          9,818,990            17.81
Effect of dilutive securities:
   employee share options                 -      408,463           -              -            131,701                -
Diluted earnings per share        3,026,000   10,241,267       29.55      1,749,000          9,950,691            17.58


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Continued





4.    Segmental analysis



The following table provides an analysis of the Group's revenue by geographical
market, irrespective of the origin of the products:


                                                                    2007             2006
                                                                    £'000            £'000

United Kingdom                                                      9,337            8,457
United States                                                       12,181           11,009
South Korea                                                         5,526            5,590
Rest of the World                                                   4,973            3,366
                                                                    32,017           28,422





5.    Profit before tax reconciliation
                                                                    2007             2006
                                                                    £'000            £'000

Pre-tax profit before exceptional items                             3,411            2,964
Exceptional items (note 2)                                          1,008            (277)
Pre-tax profit after exceptional items                              4,419            2,687





6.    Taxation on profit on ordinary activities
                                                                2007              2006
                                                                £'000             £'000


United Kingdom corporation tax at 30% (2006 - 30%)              814               545
Adjustment to corporation tax in respect of prior               4                 56
years
Overseas taxation                                               341               377
Double tax relief                                               (143)             (134)
Current taxation                                                1,016             844


Deferred taxation origination and reversal of timing            376               38
differences
Adjustment to deferred taxation in respect of prior             (61)              (30)
years
Pension scheme                                                  62                86
Deferred taxation                                               377               94
                                                                1,393             938



Corporation tax is calculated at 30% (2006 - 30%) of the estimated assessable
profit for the year.  Taxation for other jurisdictions is calculated at the
rates prevailing in the respective jurisdictions.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Continued




7.    Dividends


The Directors recommend that a final dividend of 11.15p (2006 10.70p) per
Ordinary share be paid on 23 May 2008 to shareholders on the register on 25
April 2008. The total dividend proposed and paid for the year is 14.70p (2006 -
14.00p) per share.

The accounts for the year ended 31 December 2007 will be posted out to
shareholders on or before 21 April 2008 and laid before the Company at the
Annual General Meeting on 20 May 2008.  Copies will be available from the
Company Secretary at Portmeirion Group PLC, London Road, Stoke-on-Trent,
Staffs., ST4 7QQ, or from the website, www.portmeirion.com following posting to
shareholders.


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