Potter Portmeirion throws up sales and profits improvement

Manufacturing News, Source : TheManufacturer.com
Published : 15 Mar 2007 13:39

Outsourcing product manufacture and an improvement in UK manufacturing efficiency helped once troubled potter Portmeirion to increased sales and profits for 2006.

Annual sales of £28.4 million were up 3.2 per cent above the previous year, with secondhalf sales increased by 11 per cent above the previous year's second half. Total pre-tax profit for the year was £2.6 million compared with £1.4 million the previous year, an

increase of 87 per cent.

The company said that 2006 had been a year when its strategy of transformation to a supplier of designer-branded homeware and giftware, rather than solely a ceramic manufacturer, had delivered excellent results.

During 2006, Portmeirion acquired the Pimpernel brand of placemats, coasters and trays and had started to exploit the potential for incremental sales, with complementary designs and new channels of

distribution. All Pimpernel products are sourced in the Far East, and together with the increasing programme of Portmeirion branded products also sourced, US dollar purchases would increase very considerably in 2007 and beyond, according to chairman Arthur Ralley. “Since some 40 per cent of group sales are in US dollars, the result is an increasing natural hedge against adverse exchange rate movements,” he added.

In the UK, the consolidation of two manufacturing sites into one was completed during 2005, and 2006 saw the first full year of subsequent benefits. The estimated annual operating cost reduction of £0.5 million was turned out to be closer to £1 million a year. The manufacturing gross margin in 2006 increased by three percentage points following a similar improvement the previous year, despite significant increases in energy costs in 2006.

Ralley said the group would continue to provide the necessary investment to ensure further improvements in manufacturing productivity at its UK site and, therefore, in gross margins, and

can expect to at least maintain the gross margins on sourced products.

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