A Stoke-on-Trent pottery firm is planning to spend more than £1 million upgrading its machinery and software – despite revenue and profits taking a hit in the first half of the year.
Portmeirion will invest the cash at its Stoke-based factory and distribution centre as part of efforts to ‘provide additional throughput and efficiency.’
The investment will see the company purchase a new lithograph application machine, new cranes and software and, in a separate project, build a new manufacturing line at its Wax Lyrical manufacturing site in Cumbria.
The move comes despite the company – which owns brands including Spode, Royal Worcester, Pimpernal, Wax Lyrical and Nambe – reporting a decline in revenue and profits for the first six months of 2020.
Revenue fell from £34.9 million in 2019 to £32 million between January and June – a decline of more than eight per cent.
At the same time, pre-tax losses were recorded as £2.7 million, this compares to pre-tax profit of £0.5 million for the same period last year.
In a joint statement to the Stock Exchange, Portmeirion chief executive Mike Raybould said: “Set against the backdrop of retail closures around the world for over three months, we are pleased with our sales performance in the first half of the year and are encouraged by the improving trends we saw towards the end of the period. Our teams have responded admirably to the challenges of Covid-19 and our priority remains the health and safety of our staff, customers and suppliers.
“The global Covid-19 pandemic significantly impacted the Group’s sales during the first half of 2020, notably in the UK and USA where retailers were closed for the majority of the second quarter. The closure of retail stores around the world from mid-March resulted in most major customer orders being either cancelled or delayed.
“This impact was partially negated by significant growth in online sales and by converting some of our production capabilities at our Wax Lyrical home fragrance factory in Cumbria to making hand sanitiser. As our key markets began to re-open, we continued to see improving positive sales trends, and like-for-like sales in June were only nine per cent down on the same period last year.
“Despite the disruption to the business caused by Covid-19, we have achieved considerable improvements in our capabilities with significant investment in our brands and people. This strategic progress and investment will stand the business in good stead for the future.”
Last month, BusinessLive reported how Portmeirion purchased the remaining 50 per cent share capital in its Canadian operations.
It also made a major changes to its board with the appointments of Jacqui Gale, Bill Robedee and Clare Askem.
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Mr Raybould said: “We have reacted quickly to the substantial challenges posed by Covid-19 and the subsequent retail shutdowns around the world. We have seen significant growth from our online channels and shown exceptional agility in keeping our operations working in a safe environment.
“We are encouraged by the improving sales trend we saw in June and are pleased to see this continue since the period end, and therefore expect to return to profitability during the second half of the year.
“However, we remain mindful of the limited visibility in the Covid-19 environment and wider macroeconomic backdrop as we head into the important and profitable part of the trading year around Christmas.”
He added: “During this pandemic we have not stood still and have continued to increase our investment behind our online growth strategy, new product pipeline and making our operations more efficient.
“We believe this investment, together with our strong balance sheet, underpins future growth and we remain confident in our ability to generate shareholder value. Portmeirion is well positioned over the medium to long term and we are positive that we can continue to exploit the accelerating trends of online shopping and the demand for homeware products.”