Ceramics maker Portmeirion warns on profits
Ceramics maker Portmeirion warned that profits would be lower than expected this year after export sales plunged due to weakening demand in South Korea.
In a trading update this morning the company said “significant historic demand” for its classic Botanic Garden ranges had led to other countries shipping in to South Korea, resulting in overstocking in the market.
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Shares in the London-listed pottery company plunged 17.76 per cent to 699p after the group posted its second profit warning of the year.
In a bid to rectify the issues in South Korea the Stoke-on-Trent based company has developed new products to introduce to the market, increased due diligence of distributors and signed a new distribution deal with a major South Korean retailer.
“Whilst we are confident that the strategic investments outlined above will result in improved manufacturing efficiencies and sales growth in 2020, these will inevitably impact 2019,” the company said.
“As such, we now expect that the profit for 2019 will be materially behind current market expectations.”
Portmeirion, which also sells the Spode, Royal Worcester and Pimpernal brands, said it has made good progress with its transition to online, the expansion of its home fragrance division and new product development.
Chief executive Mike Raybould said: “Since being appointed in September, I have reviewed all of our markets and our teams have invested a huge amount of resources to resolve the issues we have faced in South Korea, which were more challenging that we had anticipated earlier in the year.
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“The group has a long and consistent track record of growth, leveraging our heritage portfolio of homeware brands around the world.
“We believe that the recent actions we have taken will be successful in protecting our brands and export markets in the long term.”