Shattered: Pottery maker Portmeirion Group shares plunge 25 per cent after profit warning
Shares in pottery maker Portmeirion Group collapsed this morning after the firm issued a profit warning.
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Shares fell more than 25 per cent to 910p as the country garden-themed pottery company told investors that sales were down 10 per cent for the first four months of 2019 compared to the same period last year.
That will have a knock-on effect on pre-tax profits for the full year, which will be “significantly below market expectations”.
It pointed to UK sales climbing five per cent year on year and US sales rising eight per cent but admitted Korean sales have fallen lower than anticipated.
Measures to improve its fortunes in Korea will take time to optimise, the manufacturer warned.
Portmeirion said the 10 per cent gap in year-on-year sales will narrow over the full financial year and maintained its dividend guidance of , but this was not enough to satisfy shareholders.
They sold out of the AIM-listed crockery company despite analyst predictions that it can recover.
Aim broker Finncap said in a note: “While this profit warning will unsettle investors, we predict that Portmeirion will bounce back, based on an acceleration of their five-pronged growth strategy as well as the strong possibility of strategic acquisition.”
Research director Peter Smedley added: “The negative development in Korea is in stark contrast from their position in 2018, where the country had been highlighted as having ‘stabilised and now growing again’.
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“Investors will be quick to draw comparisons to Portmeirion’s torrid 2016, which was driven by declines in key markets, including Korea.
He said strategic M&A will “rise up Portmeirion’s agenda” as it seeks to add digital capability to boost online sales, its largest area of growth.
Portmeirion added: “We believe our long term strategy is the right one and are pleased with the progress we are making in other areas to protect and grow our brand portfolio.”