Portmeirion Group PLC Annual Report 2023

FY2023 Annual Report · Portmeirion Group PLC

Loading PDF…

Report and Accounts
for the year ended 31 December 2023

Stock code: PMP

Timeless Design

Our vision

Our vision is to be a leading force in the global homeware
sector focused on growing our great brands. We aim to
achieve this strategically through sustainable revenue
growth and continued product development across our
six established homeware brands.

Our Brands pages 4 and 5

Strategic Report
Headlines
1
At a Glance
2
Our Brands
4
Chairman’s Statement
6
Chief Executive’s Statement
8
12 Markets
14
16 Our Strategy
18
20 Our Commitment to ESG
27

Section 172 (1) Statement

Business Model

The Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022 Report
Non-Financial and Sustainability Statement
Financial Review
Risk Management
Principal Risks and Uncertainties
Key Performance Indicators
Going Concern and Outlook

31
32
34
35
36
37

Corporate Governance
38
40
46
48
50
58
61
62

Board of Directors and Company Secretary
Corporate Governance Statement
Audit Committee Report
Nomination Committee Report
Directors’ Remuneration Report
Report of the Directors
Statement of Directors’ Responsibilities
Independent Auditor’s Report

Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements

Financial Statements
67
68
69
70
71
72
73
74
75
102 Five-year Summary
BC Company Information and Financial Calendar

Headlines

Financial
• Group revenue of £102.7 million in the
year to 31 December 2023 (2022: £110.8
million), in line with market expectations
and a resilient performance against
tough trading conditions in the US and
South Korea.

• Headline EBITDA1 of £9.2 million (2022:
£13.2 million) and headline operating
margin1 of 4.7% (2022: 7.8%) reflecting
reduced revenue and operational gearing.

• Headline profit before tax1 of £3.0 million
(2022: £8.0 million) in line with market
expectations.

• Good Christmas trading period with robust
demand across our portfolio of consumer
goods brands.

• Return to sales growth in Wax Lyrical
division and further 16% growth in
ROW sales markets, in line with our
diversification strategy.

• Inventory levels successfully reduced by

13% to £36.0 million (2022: £41.1 million) as
part of medium-term plan to return to 2021
volume level.

• Balance sheet remains robust with net

debt improved to £7.9 million (2022: £10.1
million) and significant headroom within
current borrowing facilities.

• Final dividend proposed of 2.00p per

share reflects prudence given the ongoing
macro-economic uncertainty and continued
prioritisation of further reduction to net debt.
Total dividends paid and proposed of 5.50p
per share (2022: 15.50p).

• Non-cash impairment of £10.9 million in
home fragrance division driven by higher
cost of capital at 17.5% (2022: 8.6%)
and trading performance failing to return
to pre-Covid levels, although underlying
performance of the division has improved.

• Much improved free cash flow generation of
£4.4 million (2022: free cash outflow of £8.7
million).

(1) Headline EBITDA, headline profit before tax,

headline operating margin and headline basic
earnings per share exclude exceptional items –
see notes 6 and 13.

from the acquisition of the AromaWorks
London brand.

• Positive reaction to 2024 product launches

at trade fairs with strong opening
customer orders.

• Launch of new sustainability strategy

‘Crafting a Better Future’ demonstrates
the Group’s commitment to becoming a
more sustainable business. Energy usage
reduced by 8% compared to the prior year.

down on the previous year, before returning
to growth in H2 although sales performance
remains difficult to predict.

• In the US and UK, we expect a modestly
improved performance during the year
and anticipate further progress in ROW
markets and continued sales growth in
our home fragrance division, Wax Lyrical.
Encouragingly, our current US Christmas
advance orders are significantly ahead as at
the same point last year.

Operational

• Improved gross margin performance of 130
bps in US market – a key part of our long
term goal for improving operating margins.

• Improving productivity in Stoke-on-

Trent ceramic factory driven by ongoing
automation programme.

• Spode brand continues to grow, led by

Spode Christmas Tree range and benefit
from new collaboration with Kit Kemp
Design Studio.

• Home fragrance sales grew by 24% due to
new listing wins in the UK grocery channel
in Asda and Tesco and full year impact

Current Trading & Outlook
• We are on track to achieve the Board’s

profit expectations for the year, supported
by the reorganisation and restructuring
of our cost base in the last few months to
provide a significantly leaner operating
model going forward. As a result of these
measures, we anticipate overhead costs will
be approximately 10% lower (£4 million) in
2024 than the prior year.

• As set out in January trading update, we

expect 2024 to be a challenging year due to
ongoing macro uncertainty with customers
remaining cautious in relation to H1 order
flow. This is particularly noticeable in the
South Korean market which we expect to
remain subdued as Asian markets continue
to suffer from difficult economic conditions.
Accordingly, we expect in H1, our
traditionally quieter half, Group sales to be

Visit our website at
portmeiriongroup.com

Pictured front cover: Spode Kit Kemp Tall Trees

Pictured contents page: Spode Pure Morris

Revenue (£’000)

£102,743

102,743

110,820

106,018

87,854

92,816

Headline profit before tax (£’000)

£3,033

3,033

1,391

8,004

7,195

7,415

Headline basic EPS (p)

21.36p

21.36

4.96

46.59

38.85

56.32

Dividends paid and
proposed per share (p)

5.50p

15.50

13.00

5.50

Nil

8.00

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportAt a Glance

Driving profitable sales
growth in our global brands

Who we are

Our vision is to be a leading force in the global homeware sector
focused on growing our great brands. To achieve this, we aim for
consistent sales growth by developing new channels including
online, new geographies and through new product launches. In
conjunction with sales growth, we are focused on continuous
improvement of our operating efficiency and capabilities across
the Group.

We have 802 valued employees and sell around the world where
our brands and products are enjoyed by millions of consumers. Our
diversified channels and offering bring considerable opportunity
for growth and development for the future.

Our Brands

Business Model pages 14 and 15

Pictured: Spode Blue Italian

Our Commitment to ESG pages 20 to 26

What we do
Established sales channels
The Group sells into over 80 countries
worldwide and has sales offices in the UK,
US, Canada, Europe, The Middle East and
the Far East.

We sell our product increasingly via
online channels including our own UK and
US websites and through a network of
distributors, agents and own-retail stores.

The increase in consumer demand for online
has been further impacted by our focus to
grow this channel, and 44% of total sales in
our core UK and US markets are made via an
online platform, whether our own ecommerce
store, pureplay web stores or omnichannel
retailer websites.

We serve our customers from our
warehouses in the UK, the US and Canada.
We also direct ship from sourced suppliers
to maximise efficiency and lead times where
appropriate to do so.

Product design and development
The Group’s key economic driver is its
six global brands and the designs which
underpin them. Collectively these brands
have over 750 years of history, and some of
our major homeware ranges are also brand
names in their own right. Portmeirion Botanic
Garden, which was first launched in 1972,
still sells in significant volume around the
world today and Spode Christmas Tree, first
introduced in 1938, continues to sell strongly
particularly in our key US market.

Design and quality are key to our business
model. We continue to develop, extend,
refresh and refine our existing collections, as
well as launching new ranges and products
in order to retain and improve our customer
appeal. Our design studios are the creative
hub for new product development.

Production and sourcing
We manufacture earthenware from our
factory in Stoke-on-Trent and home
fragrance at our factory in the Lake District.
We also source a range of product from
around the world to the same exacting
quality standards; this includes bone china
and porcelain tableware, wood, glass and
metal alloy giftware and other associated
homeware products. In 2023, our mix of sales
was 45% manufactured product and 55%
sourced product. With this diversified supply
model, we are less exposed to the current
supply chain issues faced by many of our
competitors.

The Group continues to invest in our
manufacturing sites and have completed a
number of capital expenditure projects during
2023 in order to improve our cost efficiency
and output capacity. This included the latest
stage of automation investment in our Stoke-
on-Trent factory.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report
Where we operate

Geographical revenue split

S. Korea

ROW

NORTH AMERICA

UNITED KINGDOM

SOUTH KOREA

REST OF THE WORLD

£42.4m

£30.8m

£21.5m

£8.1m

of sales, 41% of Group revenue

of sales, 30% of Group revenue

of sales, 21% of Group revenue

of sales, 8% of Group revenue

Investment case

Global brands loved
around the world

Online sales and capability
to grow this channel

Strong operational
capabilities

The Group owns six major
brands which are sold into over
80 countries around the world
and have a combined history of
more than 750 years.

We are committed to
developing and expanding
the reach of our brands, with
particular focus on growing our
digital marketing strengths.

Portmeirion Botanic Garden
celebrated its 50th year in 2022
and Spode Christmas Tree, first
launched in 1938, remains a
perennial US market favourite.

Our online channels remain a
key part of our growth strategy.
Reflecting the change in
consumer behaviour to digital,
we continue to invest in our
online platforms, fulfilment and
capabilities.

We place strong focus on the
growth of our own ecommerce,
D2C for retail customers and
building partnerships with
distributors/retailers who have
a like-minded approach to
digital growth.

The Group maintains two
factories in the UK, these
factories made up 45% of the
revenue generated in 2023,
with the remaining 55% coming
from sourced product sales.
Product from our six global
brands is shipped mainly via
our distribution centres in the
UK, US and Canada.

We continue to build
capabilities and capacity in
our operations including the
finalisation of our mezzanine
floor project at our main UK
distribution centre to enhance
D2C order fulfilment.

We have further investment
planned for our D2C capabilities
at our UK, US and Canada
distribution centres.

Robust balance sheet
and facility headroom to
support growth

The Group maintains a robust
strong balance sheet in light of
external inflationary pressures
and at 31 December 2023 had
£17.6 million of headroom via
cash and bank facilities
available.

We have continued to focus on
working capital efficiency and
have seen a £5.2 million (13%)
reduction in inventory, and
expect further benefits in 2024.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportOur Brands

The art of the everyday
Beautiful designs built for the
real world, taking inspiration from
the beauty of nature.

www.portmeirion.co.uk

Portmeirion UK

Pictured: Spode Christmas Tree

Timelessly Designed
Bringing refined design and
heritage to your table.

www.portmeirion.co.uk/brands/
royal-worcester

Annual Report and Accounts 2023 • Portmeirion Group PLC

Pictured: Portmeirion Minerals

Unmistakably Spode
design
Unmistakable homeware design,
standing the test of time for over
250 years.

www.spode.co.uk

Spode

Pictured: Royal Worcester Wrendale Designs

Strategic Report

Nambé. Design your life
Sophisticated in a way that only
good design can be, Nambé’s
iconic mid-century modern design
offers a distinct originality and
freshness of thinking that has
stood the test of time.

www.portmeirion.co.uk/brands/
nambe

Nambe UK

Accessories for every
home
The premier brand for placemats
and coasters, carefully curated to
make your home your own.

www.portmeirion.co.uk/brands/
pimpernel

Pictured: Nambe barware

Be at one with nature
Consciously created, ethically
sourced, and sustainably produced
home fragrance and body care –
inspired by our home in the English
Lake District.

www.portmeirion.co.uk/
collections/wax-lyrical

Pictured: Wax Lyrical home fragrance

Wax Lyrical

Pictured: Pimpernel Pure Morris

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report

Chairman’s Statement

Resilient trading performance
despite significant macro-
economic challenges

“The resilience of the Group
is underpinned by the
diversity of our products,
markets and processes.”

Dick Steele
Non-executive Chairman

Summary
•

Third consecutive year of sales
above £100 million.

•

Profit before tax impacted by
7% sales reduction and higher
finance costs.

Ongoing initiatives in ESG
result in 8% reduction
in energy consumption
during the year.

Introduction
The long term success of Portmeirion
depends on doing things better today than
we did yesterday, and in maintaining the
same attitude tomorrow.

In 2023, we reported a third consecutive
year of revenue in excess of £100 million,
albeit a 7% reduction over the record sales
performance delivered in 2022. Revenue
remains 11% ahead of pre Covid-19 levels.
This reduced revenue performance, combined
with an increase in finance costs due to
interest rates rises, means we have reported
a reduction in profit before taxation.

Our business and strategy
We design, manufacture, source and sell
consumer products worldwide. Our business
is built around six international homeware
brands: Portmeirion, Spode, Wax Lyrical,
Royal Worcester, Pimpernel and Nambé,
which collectively have more than 750 years
of heritage. As such we have a huge amount
of expertise in design and manufacturing
within our categories and we are fortunate
to own brands and product ranges that have
timeless appeal and that are much loved in
homes around the world.

We will continue to develop our brands,
reaching an ever wider customer base across
the world. Intellectual property and design
are at the heart of our business, manifesting
in the sustainable nature of our revenue.

We trade in over 80 countries worldwide
and have manufacturing and warehousing
facilities in the UK and warehouses in the US
and Canada. Our Group headquarters are
in Stoke-on-Trent in the UK, with additional
offices in the Lake District, Canada and the
US. Our revenue is increasingly being earned
from digital channels, through our own web
sites and those of third parties, some of
which we fulfil directly to the consumer. We
continue to sell through third party retailers,
wholesalers, agents and distributors. We
have 12 of our own retail outlets in the UK
and the US.

The Group’s strategy is set out in more detail
on pages 16 and 17.

The Principal Risks and Uncertainties which
face the Group are set out on page 35. It is an
integral part of our management approach
that we continually identify, evaluate and
mitigate risks where appropriate and
reasonable.

The Group continues to monitor ongoing risks
to supply chains and inflationary impact on
consumer spending. Whilst we cannot fully
remove all external risk factors, we remain a
diversified and well-funded business.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportS
t
r
a
t
e
g

R
e
p
o
r
t

Pictured: Portmeirion Botanic Garden

Governance
The Group is a committed member of the
Quoted Companies Alliance (“QCA”) and
has chosen to apply the QCA Corporate
Governance Code as the most appropriate
for our size and structure. We have complied
with the principles of the QCA code
throughout 2023 and continue to do so.
Further details of our approach to governance
can be found on our website and on pages
40 to 45 of this report. The Board considers
our governance procedures to be appropriate
for a company of our size, however we
continually look to further improve and
welcome feedback and engagement from
shareholders. Shareholders are encouraged
to contact us via the email address
shareholderenquiries@portmeiriongroup.com.

The Board
In June 2023, the Board appointed Jeremy
Wilson as a Non-executive Director. Jeremy
is a qualified chartered accountant with
30 years’ experience in senior finance roles
in a wide range of industries including
consumer products.

At the conclusion of the AGM on 21 May 2024
Andrew Andrea will retire from the Board and
hand over the Chair of the Audit Committee
to Jeremy. Andrew has been a Non-executive
Director since June 2017 and has made an
invaluable contribution to the Board; we wish
him well for the future.

The Board keeps its composition and
performance under constant review so as to
ensure that we have the appropriate skills,

experience and resources to deliver on our
four main board requirements of: setting
strategy, reviewing progress against strategy,
monitoring the resources required to deliver
the strategy and complying with relevant
regulatory or governance requirements be
they legal or otherwise. We undertake a
formal board effectiveness review each year.

Our people continue to show outstanding
commitment to the Group in their ability
to adapt and deliver in difficult market
conditions whilst developing readiness for
future growth. The Board is proud to be part
of a team that drives us forward and thanks
all of our colleagues for their efforts.

Our people, culture and
environmental impact
We promote an open culture in the business
which is achieved from effective employee
engagement, people development and
diligent resource management. We are a
caring employer with an excellent health
and safety record, fair and balanced equality
policies, a wide diversity in our workforce and
management structures and a consultative
approach with our people.

In order to safeguard our future profitability
we have undertaken headcount reductions
across the Group, this process has been
handled carefully and sensitively.

We continue to advance our ESG agenda,
and in 2023 published our new sustainable
business strategy and roadmap ‘Crafting a
Better Future’. This remains a key focus of the
Board going forward.

Further details can be found in the Our
commitment to ESG section on pages 20
to 26 and the Corporate Governance
Statement on pages 40 to 45 of this report.

Dividend
The Board remains committed to a
sustainable dividend policy with an
appropriate level of cover. Our policy will
ensure that we retain and invest sufficient
capital in our business to drive long-term
growth in our brands. We currently consider
that a level of cover at or close to three times
the dividends paid and proposed for the
year is the appropriate rate for the medium-
term to allow increased investment whilst
providing a return for shareholders.

Prudently, given the ongoing macro-economic
uncertainty and the continued prioritisation
of further reduction to net debt, the Board
is recommending a final dividend of 2.00p
(2022: 12.00p). Total dividends paid and
proposed for the year would therefore be
5.50p per share (2022: 15.50p). The Board
continues to monitor its dividend outlook
and looks forward to increasing shareholder
returns as the trading environment improves.

Dick Steele
Chairman

25 March 2024

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report

Chief Executive’s Statement

Resilient sales performance
against backdrop of weaker
global consumer spending

“We continue to work on
unleashing the full potential
of our brand portfolio and
believe we are well placed to
return to growth as consumer
markets recover.”

Mike Raybould
Chief Executive

Summary
•

Sales fall 7% against a tough
comp of record 2022 sales
levels and a much tougher
consumer market backdrop
but remain 11% above
pre-Covid levels.

•

Rest of world sales grew 16%
representing key part of long
term growth plan and home
fragrance division returns to
growth with sales up by 24%.

Ongoing investments in
factory automation and
productivity gains have helped
offset input cost inflation.

Opportunity to both grow
sales and improve operating
margins back to historic levels
over next 3-5 years.

Energy usage down 8%
although Carbon/ tonne
saleable product increases by
9% as we reduce output and
stock levels.

Financial Highlights
2023 was the third consecutive year the
Group had exceeded £100 million of sales,
albeit North America and South Korea sales
were slightly down year-on-year due to the
impact of weaker consumer sentiment and
de-stocking by our major retail customers.

Group sales reduced by 7% compared to the
record figures reported for 2022.

We experienced another strong Q4 trading
period particularly for our key Christmas
ranges. Sales from our Spode brand
continued to grow, with Spode Christmas
Tree sales again increasing, driven by both
additional store space and extensions to
the range.

We also saw growth in our rest of world
markets which were up 16% over the
prior year.

In Wax Lyrical, our home fragrance division,
sales were up 24% driven by new listing
wins in the UK grocery channel and the
full year impact from the acquisition of the
AromaWorks London brand in August 2022
which has delivered cost synergies and
cross-selling opportunities.

Operational Overview
Revenue for the Group decreased by 7% to
£102.7 million (2022: £110.8 million).

The Group’s largest geographical market,
North America (the US and Canada),
accounted for 41% of total Group revenue.
In translated figures, sales in this market
decreased by 13% to £42.4 million
(2022: £48.9 million) due to previously
highlighted customer destocking and tougher
macro-economic conditions. However, we
are pleased to have seen an improved gross
margin performance of 130 bps in the US
market – a key part of our long term goal for
improving operating margins.

Our second largest market is the UK which
accounted for 30% of Group sales at
£30.8 million (2022: £28.3 million), an increase
of 9% over the prior year. UK ceramic sales
were broadly flat, with the growth coming
from a rebound in home fragrance sales.

Sales into South Korea slowed down in
the second half resulting in a 19% full
year reduction to £21.5 million (2022:
£26.7 million) as consumers reacted to
inflationary pressures and the resulting
impact of retailers reducing stock holding.

Rest of World sales have grown strongly to
£8.1 million (2022: £7.0 million), an increase
of 16%, and remain a key area of focus in our

Annual Report and Accounts 2023 • Portmeirion Group PLC

strategy as we continue to diversify our end
consumer markets.

well-known brands and global sales
infrastructure.

In addition, as part of our year end process
we have made an impairment into our home
fragrance division which was acquired
in 2016. We have seen an improved
performance from this division during the year
but applying a much higher discount rate to
expected future cash flows at this lower level
of profitability has resulted in an impairment.
We remain committed to improving the
profitability of this division in line with the
sales growth delivered in FY23.

Products and brands
Our brands and product ranges are a major
economic asset for the Group. Our six major
brands – Portmeirion, Spode, Wax Lyrical,
Nambé, Royal Worcester and Pimpernel
together have over 750 years of combined
history. Their designs are well recognised and
loved by consumers around the world.

We have a number of product ranges that
have huge longevity and long running
customer repeat purchase. Portmeirion
Botanic Garden was first launched in 1972
and continues to sell well around the world
today. Spode Christmas Tree launched in
1938 is a top US Christmas tableware range.
We continue to design new extensions to
ensure these ranges remain relevant for
consumers and to extend their appeal around
the world. Together the two ranges account
for approximately 40% of sales and are two of
the most successful global tableware ranges.

We are proud of our growing portfolio of
contemporary product ranges, including
Sophie Conran for Portmeirion, and have an
exciting roadmap of targeted new product
planned for launch over the next 18 months.
We are focused on growing both our heritage
range sales footprint and increasing our
contemporary market share through new
product development, increasing online sale
channel penetration and developing new
geographical markets.

A list of our current ranges can be
found at www.portmeirion.co.uk and
www.spode.co.uk. Customers in the United
States should go to www.portmeirion.com
and www.nambe.com.

Group Strategy
We see a strong opportunity to grow our
sales as sales markets around the world
normalise following a period of inflation and
interest rate shocks on consumer spending.

We remain focused on:

Developing our key heritage ranges that
are well known around the world through
new product extensions, new sales
channels and new geography.

Increasing our market share in
contemporary and giftware markets.
We intend to drive this via new product
development and leveraging our

Executing our growth strategy
1. Geography - building and growing
sales markets outside of our three
core markets of North America,
UK and South Korea
Rest of World tableware sales markets
grew by 16% in 2023, for the third year of
successive growth, reflecting successful
implementation of our diversification
strategy. Our products are well known
and sold in more than 80 countries
around the world.

Our three core markets of UK,
North America and South Korea account
for 92% of Group sales and we see
a significant opportunity to continue
to grow the contribution from ‘Rest of
World’ sales markets.

We continue to work with existing
partners as well as appointing new
distributors to grow our customer reach
around the world.

2. Online – further developing online
sales channels in our core markets
reaching more potential customers
on more occasions
We continue to invest in building long
term direct-to-consumer relationships
through our own ecommerce sites in
the UK and US. In 2023, we moved to a
global ecommerce team structure which
led to improved levels of profitability and
provides a good platform for growth in
the medium and long term.

In 2023, in our core UK and US markets,
sales through online channels represented
44% of revenue (2022: 51%, 2019: 30%)
as customers continued to return to
physical retail channels. In South Korea we
have increased online channel presence in
2023 driving sales growth in this market.

In 2023, our own ecommerce sales
represented 12.4% of total sales in the
UK and US (2022: 14.2%, 2019: 9.7%),
the reduction representing a more
normalised shopping environment as
consumers continued to return to physical
stores. Notwithstanding this post-Covid
correction, we expect the longer term
trend towards a greater ecommerce mix
of sales to continue.

We saw an excellent sell through of
our key Christmas lines across online
channels and were encouraged by an
improving trend in the UK with our own
ecommerce orders up 9% YOY in the
last 8 weeks of the year. We continue to
expand the availability of our Christmas
ranges in online space around the world
and the strong sell through in 2023
should drive good sales momentum
through our online channels for 2024.

3. Designing and launching new
product - widening the appeal
with our existing customer base
and taking market share
Sales from new product launches and
extensions to existing ranges continued
to drive a healthy return, contributing over
10% of the Group’s sales in 2023.

New product is critical to our customers
and our growth strategy. It enables us
to refresh key heritage ranges, allowing
consumers to add to collections as
well as providing us with opportunities
to target market share gains in new
areas of the market. We have a strong,
experienced global product development
team and rolling roadmap of new
launches for the next 24 months.

In 2023, our product extensions to our key
Spode Christmas Tree range sold through
well – and we see considerable further
opportunity to grow this range in its core
US market but also around the world.

Again under our Spode brand, we
successfully launched a collaboration
with renowned British interior designer,
Kit Kemp. This new range gained listings
in store and online and featured in
Bloomingdales stores in the run up to
the seasonal holiday period. It has also
started to be rolled out in Firmdale Hotel
Group’s sites in London with New York to
follow in 2024.

In our home fragrance division,
Wax Lyrical, we developed a new range
that went into Asda in the second half
of the year and will roll out to further
national store chains in 2024.

We have a number of important new
product launches planned for 2024. This
includes a beautiful new stoneware
range ‘Portmeirion Minerals’ that we are
excited to launch in John Lewis in the UK
and will target similar in store and online
listings around the world.

We will expand our Spode Blue Italian
heritage range (first launched over 200
years ago) with a new tie-in blue and white
stripe pattern that works as a stand-alone
tableware range or can be mix and
matched with the original Blue Italian.

We will continue to expand our licensed
tableware and giftware collaborations
including Sophie Conran for Portmeirion,
Royal Worcester Wrendale Designs and
Portmeirion Sara Miller London.

In our home fragrance division, we will
continue to expand our new ‘Wax Lyrical
England’ candle and diffuser range into
new fragrances and will be launching
a stronger Christmas product line up as
well as new gifting formats.

Annual Report and Accounts 2023 • Portmeirion Group PLC

9
9

Strategic ReportPictured: Spode Blue Italian and Steccato layered

4. Leveraging our brands

Our brands are well known across
our key markets and we see a strong
opportunity to leverage our portfolio
across different markets.

can purchase their favourite products.
Our Spode collection can be found in
The Covent Garden, Number 16 and The
Knightsbridge in London and The Warren
Street in New York.

Portmeirion Botanic Garden remains one
of the top tableware brands in South
Korea and consistently features in the
top 2 brands in online searches. We
are excited by opportunities to leverage
this brand awareness across our other
existing ranges and into new potential
categories. This will include launching
our first range of Botanic Garden bed
linen in 2024.

We will continue to focus on
opportunities to grow our Spode
Christmas Tree tableware and giftware
ranges outside of its core US market.

Similarly, our US centred brand, Nambé is
now on sale in South Korea and Rest of
World markets.

As well as leveraging our brands across
geographic regions we have also been
diversifying into new market segments.
During the year we launched our new
Spode range with British designer Kit
Kemp with the new range featuring
across many of Firmdale Group’s
premium hotels in London and New
York. This is an exciting development
for the Group as we continue to build
visibility across our markets. This
partnership will also see our Spode
range being accessible to guests within
their hotel room brochure where they

Opportunity to improve our
operating margins in medium
and long term
We are focused on the opportunity to
improve our operating margins to a medium
term target of 10% and in the long term back
to historic highs of 12.5% (2023: 4.7%, 2022:
7.8%). Although operating margins fell in
2023 on reduced sales, we are confident the
action taken below will result in a meaningful
improvement in the future.

There are a number of drivers of this
improvement:

1. Improving productivity and

efficiency in our UK factories
through capital investment and
process improvement
We are proud to manufacture around
50% of our tableware sales in our factory
in Stoke-on-Trent and believe that ‘Made
in UK’ carries a significant premium in
certain markets, particularly Asia.

We have accelerated capital investment
in the site over the last 3 years investing
in automation, reducing manual handling
so that we can increase productivity and
capabilities.

In December 2023 we installed two new
major pieces of capex – an automated

Annual Report and Accounts 2023 • Portmeirion Group PLC

dipping line and a new glaze line. As
these projects come fully on stream in
early 2024, they will further improve
productivity and reduce energy
consumption. During 2023 we also
commenced roll out of a new real time
production data system that will drive
reduced downtime across key machines.

We are also delighted that ongoing
project work to reduce our energy
consumption and carbon footprint
resulted in 8% lower energy used in our
UK factories vs 2022.

We believe that in the medium term,
factory productivity improvements have
the potential to add 1-2% to Group
operating margins.

2. Leveraging our fixed cost base as

we grow top line sales
As a business with two UK factories
and significant infrastructure in key
sales markets, we have the opportunity
to leverage our spare capacity and
distribution networks by growing our top
line sales.

We have taken the opportunity in the last
few months to restructure our cost base
to provide a significantly leaner operating
model that should allow operating
margins to improve more quickly
once sales markets around the world
normalise. As a result, we anticipate
overhead costs will be around 10% (£4m)
lower in 2024 than the prior year.

S
t
r
a
t
e
g

R
e
p
o
r
t

Pictured: Sara Miller for Portmeirion

Over the long term we see an opportunity
to grow our global sales base by 30-50%
over 2023 levels and believe this would
contribute a 3-4% improvement in
operating margins over recent years.
Our capex investments over the last
few years put us in a good position to
grow the business from an efficient and
dynamic cost base as and when global
markets improve.

3. Improving the profitability of our
home fragrance division back to
pre-Covid levels
Wax Lyrical, our home fragrance
division, that manufactures fragranced
candles, diffusers and hand and body
products in our factory in Cumbria was
significantly impacted by the closure of
much of its customer base due to Covid.
Concentrated in physical retail, the nature
of the product meant there was a much
lower transition to online sales channels
than with our core tableware business.
As a result sales fell in 2021/22 leading to
the division making a loss.

We are pleased that the business
returned to growth in 2023, with sales up
24% and a reduced loss to prior year.

We expect the division to continue
to improve sales and profitability in
2024 and 2025 and this will help grow
overall Group operating margins. We
estimate that this could add 1-2% to
operating margins.

Environmental, Social and
Governance (ESG)
We are focused on being an ethical and
sustainable business and recognise our
responsibility to our shareholders, employees,
customers, communities and the people
that bring our products into their homes.
We believe that operating in a sustainable
way across the environment, people and
communities is critical to the long-term health
of our business and the world we operate in.

In May 2023, the Group launched a new
sustainability roadmap entitled ‘Crafting a
Better Future’ which outlines the Group’s
commitment to becoming a more sustainable
business. The launch represents the next
level of ambition for the Group – to ensure
that we continue to reduce our impact on the
environment and support our colleagues and
communities.

The Group has a long history of innovation
and a strong track record of continual
improvements in sustainability. Focusing
on our operation with the highest energy
usage, being the Stoke-on-Trent tableware
manufacturing facility, we were pleased
to see a further reduction in energy use of
8% over 2022 levels. We are dedicated to
delivering further significant improvements in
energy consumption and carbon emissions in
the coming years.

Our commitment to our people, ethics and
governance is unfaltering, supported by our
policies and processes. Further details about
our corporate culture and its integration

within the Group can be found on our
website, www.portmeiriongroup.com, and
in our Section 172(1) statement – Engaging
with key stakeholders to deliver long term
success on pages 18 and 19, in the Our
Commitment to ESG section on pages 20 to
26 and the Corporate Governance Statement
on pages 40 to 45.

The commitment of our employees to making
beautiful products ethically is valued by the
Board and we thank them for their efforts. Our
culture and staff well-being initiatives support
our ethos to be an employer of choice. This is
demonstrated by both our UK businesses being
Investor in People Platinum level accredited.

Mike Raybould
Chief Executive
25 March 2024

Annual Report and Accounts 2023 • Portmeirion Group PLC 11

Markets

Expanding international markets

Portmeirion Group sells into over 80 countries around the world.

United Kingdom

North America

Pictured: AromaWorks London Light

Pictured: Nambé wood and seasonal

SALES

£30.8 million

SALES

£42.4 million

The UK was the second largest market for the Group in
2023, with sales of £30.8 million (2022: £28.3 million) or
30% of the Group’s total revenue.

North America (US and Canada) was the largest market
for the Group at £42.4 million of sales (2022: £48.9 million)
or 41% of the Group’s total revenue.

Market implications
Consumer spending in the UK was negatively impacted
by high inflation and rising interest rates but we saw
growth in this market as we benefit from additional sales
in our home fragrance division from our new grocery
channel relationship and the AromaWorks London brand
acquired in August 2022.

Following the Covid-19 pandemic there has been a notable
shift to omnichannel retail with the importance of servicing
customers both in physical retail stores and online.

Response
We continue to react to market trends in our brands and
online capabilities. We have invested significantly in our
websites, teams and fulfilment capacity to ensure we
can satisfy the increased direct to consumer demand.

New customer relationships have created an opportunity
to drive UK sales growth despite the tough economic
backdrop.

Link to strategy
1 2 4 5

12 Annual Report and Accounts 2023 • Portmeirion Group PLC

Market implications
The North American market was impacted by aggressive
destocking by major retailers ahead of anticipated fears
of a slowdown in consumer spending. Where we have
retailer sales out data this evidences that demand remains
robust and will result in improved trading once this
destocking exercise is complete.

Response
We continue to leverage our brand heritage in order to
provide further growth in this important market. Spode
Christmas Tree, first introduced in 1938, remains a US
market favourite and our Nambé brand (acquired in 2019)
has added additional scale to our operations.

As sales have reduced during the year we have focused
on operational efficiencies and this will allow a strong
rebound once sales in this market stabilize.

Link to strategy
1 2 4 5

Strategic ReportLink to strategy

1 Developing online sales channels
2 Leveraging our brands
3 Building new markets/geography

4 Developing and launching successful new product
5 Operating and procurement efficiency and capabilities

South Korea

Rest of the World

Pictured: Portmeirion Botanic Garden

Pictured: Spode Kit Kemp

SALES

£21.5 million

COUNTRIES

Sales into South Korea were £21.5 million (2022:
£26.7 million) or 21% of total Group sales in the year.

Market implications
The South Korean market was negatively impacted by
high inflation, rising interest rates and the impact of foreign
exchanges on consumer goods prices.

This resulted in a fall in demand from the end consumer and
then via our distribution network.

Response
We continue to launch new products and broaden our range
of brands and distribution routes into South Korea in order to
reduce the market reliance on core ranges like Portmeirion
Botanic Garden.

We also continue to build our online presence in this market.

Link to strategy
1 2 4 5

The Group sells into more than 80 countries around the
world which accounts for 8% of the Group’s revenue.
Sales increased to £8.1 million during the year (2022:
£7.0 million).

Market implications
New distribution partners in Asia have helped to offset the
worldwide challenging retail markets, with the majority
of our sales markets impacted to some extent by inflation
which suppressed consumer spending and retailers
destocked.

Response
We continue to invest in our international design and
sales teams, and develop market specific products to meet
local demands.

We have seen strong performance during the year
in Malaysia, and we aim to continue to build new
sales markets.

Link to strategy
1 2 3 4 5

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportBusiness Model

Diversified routes to market
and product offering

Our enablers

Value creation

Custo m

e r s

Sourcin

g a

Creating
value

1 2
4 3
s a n d Innovatio

B r

rket

Brands portfolio

• Strong, separate identities.

• Revenue generation and growth

across all six brands.

• Numerous opportunities to leverage
brands for enhancement of earnings.

• Combined over 750 years of

collective history.

Exceptional people

• Experienced leadership team in place.

• Strong focus on investing in and
developing our 802 employees.

• Teams based in various locations to

ensure strategy is in line with localised
requirements/trends. These locations
include the UK, North America,
Republic of Ireland, Germany, Dubai,
South Korea and China.

Innovation and design

• Customer centric approach

to strategy.

• Innovation and design is the heart of

our business model.

Operational excellence

• Factories in the UK (2 sites).

• Distribution centres in the UK and

North America. We also direct ship
from suppliers where appropriate to
reduce shipping costs and lead times.

• Significant ongoing investment
in operational efficiency and
capability projects.

Finance

• Low financial gearing.

• Strong focus on operating

profit margin.

• Commitment to sustainable

dividend policy.

14 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report

Value creation

Stakeholders

For Shareholders

Value is delivered by dividend payments and capital
appreciation.

Customer centric – diversified product offering

FOR THE YEAR ENDED 31 DECEMBER 2023:

• Diversified customer base.

• Omni-channel and Geographical.

• Tableware, Serve-ware and Gifting.

• Home Fragrance.

Diversified inward supply chain

• Operational excellence, focus on sustainability.

• In 2023, 45% of products sold were manufactured in our
own UK factories. The remaining 55% sold were sourced
from various locations around the world.

Innovative products

• Opportunities for growth in new and existing markets.

• Innovative products launched reflect current consumer

requirements. Price point is in line with competing brands.

Routes to market

• Brand identities are separate and strong routes to market
are led by customer requirements. A growth in digital has
been long predicted and internal investment, alongside
market trend, has resulted in significant growth.

5.50p

For Customers

dividends paid and proposed per share.

Excellent customer insight and fulfilment capabilities have
enabled us to effectively grow.

DURING 2023:

44% of sales in our core UK and US markets were

made via online channels.

For people and our local communities

The successful execution of our business model and strategy
provides additional employment opportunities within our
local communities and long-term career development for our
existing employees.

802 employees across the world.

For the environment

We strive for operational excellence whilst reducing
environmental impact.

Over 58% of Wax lyrical energy was

generated by wind turbine.

Our Commitment to ESG pages 20 to 26

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report
Our Strategy

Driving sustainable growth

Our strategy is built around reaching ever more potential customers for our brands whilst
focusing on further efficiency in everything we do. We expect this to deliver sustainable
sales growth and improve operating margins, thereby driving increased profitability.

1
Developing online
sales channels

2
Leveraging
our brands

3
Building new
markets/geography

Progress

• Global online markets have seen

• Strong performance of our key

• Rest of world sales improved to

the negative impact of inflation and
consumer demand. This has been
leveraged with continued operational
efficiencies and platform alignment
throughout the Group.

• Customer list growth has reduced

reliance on traffic acquisition spend
and drives an improved operating
margin performance for our
online sales.

• Total online channel sales account for
44% of UK/US markets (2022: 51%,
2019: 30%).

Future outlook

• Ongoing investment in our own

websites and digital/online presence
across all platforms.

• Further utilisation of exclusive new

product for online customers.

• Continue focus on deepening

relationship with the end consumer
and building lifetime value
of customer.

The Board’s governance role

• The Board approves the long-term
objectives and strategy, monitors
performance and where necessary,
ensures corrective action is taken.

heritage range Spode Christmas
Tree and the successful launch of the
Spode Kit Kemp range, new to 2023.

8% of total Group sales (2022: 6%)
despite widespread disruption in
sales markets.

• Strong progress in growth markets.

• Road map of new product

development to enhance customer
offering in international markets.

Future outlook

• Long term aim to double rest of world

sales against 2020 base.

• Target to build three new

sizeable markets.

• Leverage our brands further with
international growth in home
fragrance and Nambé.

The Board’s governance role

• The Board reviews the financial
performance of the Group in
major markets.

• Resilient performance across our
brands notably Spode despite
macro-economic headwinds.

• Improved digital assets have helped to
drive better online sales performance.

Future outlook

• Comprehensive roadmaps completed
for all brands to provide detailed plan
for new product launches.

• Development of heritage product

ranges and new collections which are
brand focused and target both our
traditional customer base and new
consumers.

• Key digital assets planned for our new
product launches to improve sales
execution.

The Board’s governance role

• The Board oversees the Group’s
operations to ensure competent
and prudent management by the
Executive Directors and the senior
management team.

Link to KPIs

1 2 3 4 5 6

Link to Risks

1 2 3 5

Link to KPIs

1 2 3 4 5 6

Link to Risks

1 3 4 5

Link to KPIs

1 2 4 5 6

Link to Risks

1 2 3 5

16 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report4
Developing and launching
successful new product

5
Operating and procurement
efficiency and capabilities

Progress

• Strong new product performance
including the new Spode Kit Kemp
collection.

• New product launches continue to
contribute over 10% to total Group
sales per annum.

• UK factories continue to improve

efficiency with ongoing investment.

• Automation schemes in Stoke-on-

Trent factory implemented continue to
enhance capacity and efficiency.

Key to KPIs

1 Revenue
2 Headline operating profit margin
3 Own ecommerce sales
4 Headline basic EPS
5 Operating cash generation
6 Dividend cover

• Successful uplift of AromaWorks

Key to Risks

• Robust pipeline of new product
developed for future launch.

manufacturing to provide additional
throughput in home fragrance factory.

Future outlook

• Strong pipeline of new product for
launch in 2024 including the new
Portmeirion Minerals range.

• Continue to manage supply chains
despite ongoing disruption and
inflation.

Future outlook

• Ongoing product extensions in

• Ongoing investment in factory

heritage ranges including highly
successful Spode Christmas Tree.

efficiency projects will add output and
improve efficiency.

1 Economic environment
2 Competitors
3 People
4 Suppliers
5 Financial risk

• Home Fragrance growth including

AromaWorks London brand acquired
in August 2022 and new Wax Lyrical
England range offering through
grocery and national retailers.

The Board’s governance role

• The Board regularly reviews

commercial sales information to
ensure the Group has a sustainable
growth model.

• Further procurement savings available
as we globalise our teams and obtain
economies of scale.

• Ensure capacity in manufacturing and
distribution to drive further sales and
operating margin growth.

The Board’s governance role

• The Board approves the annual
expenditure budgets and any
material changes to them. Capital
and operational expenditure over
£250,000 must also be approved by
the Board.

KPIs page 36

Risk Management page 34

Corporate Governance Statement
pages 40 to 45

Link to KPIs

1 2 3 4 5 6

Link to Risks

1 3 4 5

Link to KPIs

1 2 3 4 5 6

Link to Risks

3 4 5

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportSection 172 (1) Statement

Engaging with our stakeholders

The Board is committed to delivering sustainable value to shareholders and other stakeholders. To do so it is
imperative we engage meaningfully to deliver better outcomes for our business and all people who come into
contact with it. The Board recognises the importance of considering all stakeholders in its decision making.

The below sets out our Companies Act 2006
Section 172 (1) Statement which provides
details of the Board’s engagement with our
key stakeholders during the year and how
stakeholder considerations have helped
shape Board decisions and outcomes. This
statement focuses on matters material to
shareholders. The Group’s key resources and
relationships are detailed in the Business
Model on pages 14 and 15.

The Board’s understanding of the interests
of the Group’s stakeholders is informed
by the Board’s programme of stakeholder
engagement. The Board appreciates that
in some circumstances conflicts between
different stakeholders may arise and
therefore will endeavour to understand and
evaluate the requirements and priorities
of each group when making its decisions
and resolutions will be sought in a manner
that benefits the long-term success of
the business.

Our Strategy pages 16 and 17

Our Commitment to ESG pages 20 to 26

Shareholders

Customers

Link to strategy

1 2 3 4 5

Link to strategy

1 2 3 4 5

Overview
Our shareholders are vital to the future
success of our business, business growth and
the generation of sustainable returns.

Overview
Listening to our customers helps us to
better understand their needs and provide
suitable products.

It is important to our shareholders that
they are kept up to date with strategy and
business performance; that we deliver
shareholder value and that they receive timely
and relevant communication on all aspects of
the business including that of remuneration
policy and management incentivisation.

How we engage
• Regular reporting content, delivered

through the annual report and accounts
and half year report;

• direct Q&A sessions at results

presentations with analysts, investors and
potential investors. Feedback shared with
the Board;

Our customers expect excellent quality,
innovative products that meet their
requirements whilst being able to order
easily at a competitive price with exceptional
service and delivery. Brands that they
recognise and love are important to them.

How we engage
• Customers’ needs are considered at every
level of the business, from the Board to the
service desk;

• commercial teams engage regularly

with strategic and national customers
to build trust and collaborative working
relationships. Key accounts are overseen
by Board or function heads;

• Chief Executive and Group Finance Director
present to retail shareholders through the
Investor Meet Company forum;

• we use support statistics analysis to
identify ways to improve customer
experience; and

• Chairman writes to institutional and large

• direct to consumer engagement

via customer services, emails and
social media;

Considerations and outcomes
• Feedback from key national customers
in the US and UK and international
distributors led to customer specific new
products; and

• During 2023, we made further

enhancements to our Stoke-on-Trent
factory to deliver efficiencies which will
ultimately enhance our capabilities to
react to customer demand with shorter
lead times.

holding shareholders annually; and

• questions from shareholders encouraged

prior to and at the AGM.

Considerations and outcomes
• The Group takes advice and guidance
from its advisers on what is important
to shareholders in planning all
communications to ensure it addresses any
emerging key topics;

• for the first time in 2023, a video

presentation of the 2022 Preliminary
Results was made available on our
corporate website;

• in March and September 2023, live

presentations to institutional investors and
to retail investors via the Investor Meet
Company platform; and

• at the 2023 AGM, shareholder proxy votes

lodged for each resolution were, at a
minimum, 99% in favour.

18 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportLink to strategy

1 Developing online sales channels
2 Leveraging our brands
3 Building new markets/geography

4 Developing and launching successful new product
5 Operating and procurement efficiency and capabilities

Suppliers

Employees

Communities and the environment

Link to strategy

2 4 5

Link to strategy

1 2 3 4 5

Link to strategy

2 4 5

Overview
Engaging with our people enables us to
create an inclusive Group culture and a
positive working environment.

Our colleagues need a safe place to work;
engagement with the business and its overall
purpose, wellbeing and work-life balance; to
feel valued, trusted and empowered; and to
be fairly rewarded and incentivised.

How we engage
• Briefings, newsletters, team meetings,

opinion surveys and opportunity to engage
with Chief Executive directly;

• Innovation Scheme rewarding ideas
leading to operational efficiencies;

• focus groups e.g. health and safety

meetings, green team, UK energy team;

• providing training and community

involvement;

• our UK businesses are Investors in People
Platinum accredited in recognition of our
commitment to leading, supporting and
improving our workforce; and

• Board visits to manufacturing sites to

provide opportunities for first hand visibility
of staff morale and working arrangements.

Considerations and outcomes
During 2023, our employee engagement led to:

• outreach projects in local schools and

a hospice;

• continued wellbeing awareness campaigns
including access to occupational health
specialists and Mental Health First
Aiders; and

• significant progress in collaboration

between Global teams resulting in Global
reporting structures and efficiencies in cost
and consistent management.

Overview
Treating our suppliers fairly and having positive,
proactive interaction with them allows us to
drive higher standards and reduce risk in our
supply chain whilst seeking cost efficiencies
and positive environmental outcomes.

It is important to our suppliers to have visibility of
future projects and workload; to share financial
risks and rewards appropriately with us; to drive
operational efficiency; and for them to receive
timely payment and support to allow them to
conduct their business ethically and sustainably.

How we engage
• Our collaborative approach ensures all

parties have a shared long-term objective of
working together, reducing risk, maintaining
high standards of business conduct and
delivering to time and cost;

• continuous engagement which is both

formal but also informal from day to day
dialogue between our teams;

• we conduct due diligence checks on
suppliers of agency labour to ensure
compliance with labour law and reduce the
risk of modern slavery; and

• our sourced product suppliers are required
to comply with our ethical trading code of
conduct and complete SEDEX audits to help
us proactively assess, manage and mitigate
business and supply chain risks. We work
proactively and positively with our suppliers
to address any action points arising out
of audits.

Considerations and outcomes
• Our highly experienced teams continue to

manage costs and successfully navigate the
challenges of global supply chain disruption
and the ongoing effects of the war in
Ukraine on utility and raw material costs;
• we continue to work with our suppliers to

remove or reduce single use plastics within
the supply chain. Where elimination is not
possible our suppliers are working towards
using at least 30% recycled materials; and

• targeted initiatives with suppliers,

particularly those providing services, has led
to cost savings during 2023.

Overview
Contributing positively to wider society
enables us to create stronger communities
locally and have a more positive
environmental impact.

It is important that we understand the
likely consequences of our decisions in
the long term on the environment and our
communities. We want to reduce the negative
impact of climate change whilst continuing to
provide our high quality, durable products.

How we engage
Within our business sector and local
communities we:

• as a business and through our staff we
continually consider ways to reduce our
environmental impact;

• explore opportunities to make a difference

through our charitable programmes;

• our employees proactively engage in

volunteering activities;

• are continuing to develop a programme

to engage with strategic partners to build
employability skills; and

• see Our Commitment to ESG section on

pages 20 to 26.

Considerations and outcomes
• In May 2023, we launched our new

sustainability strategy and roadmap,
“Crafting a Better Future” which outlines
our engagement on three specific fronts of
environmental impact, nurturing the best
from our employees and being a positive
part of our community family. For more
details see: www.portmeiriongroup.com/
sustainability; and

• the Board has completed its first year
of The Companies (Strategic Report)
(Climate-related Financial Disclosure)
Regulations 2022 reporting, recognising
the importance of climate related issues
as part of its ESG agenda and continually
assessing the Group’s progress and
goals to become net zero by 2040; see
pages 27 to 30.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportOur Commitment to ESG

Inspired by our Heritage to Craft a
Better Future for our environment,
people and communities

“ Portmeirion Group
is a purpose-
driven business
with heritage and
community at
our core.”

Mike Raybould
Chief Executive

We have a responsibility to our employees,
customers, communities and the people that
bring our products into their homes, and
we work hard to reflect this in everything
that we do.

Launched in 2023, our new Crafting a
Better Future strategy outlines the Group’s
commitment to reduce its impact on climate
change and develop as a positive force for
the environment, the people that work across
our operations and our local communities.

We are clear that we must continue to play
our part in tackling global pressures such as
climate change and support our extended
community families whilst continuing to
meet the expectations of our investors,
stakeholders and customers as they
work to deliver their own commitments.

20 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportCommit 2040

Portmeirion Group is committed to achieving
Net Zero emissions across Scope 1 and
2 by 2040, aligning with global efforts to
combat climate change. This long-term
objective is being pursued through a strategic
approach, monitored and realised through
various stages.

Waste reduction
The Group has achieved a 15% reduction
in total waste generated in 2023 compared
to 2022. Of this, 59% is recycled and the
remaining waste is repurposed, contributing
to our 0% landfill rate. Ongoing efforts
focus on reducing single-use plastics and
minimising overall plastic consumption.

Supplier collaboration
Initiatives to reduce emissions across our
value chain have recently commenced.
Collaborative efforts with suppliers will play
a crucial role in achieving our Net Zero goal,
with ongoing evaluations and strategic
partnerships anticipated in the coming years.

Energy reduction
Energy consumption across UK operations
is being reduced. Key initiatives include
the installation of modulating burners
on kilns, the retirement of poor energy-
efficient processes and improved visibility
of consumption data, facilitated by the
Sustainability Ambassador scheme.

Targets and measures
implemented
Our current objective is a significant
reduction in combined energy demand for
UK operations by 2025. As of 2023, a 8%
reduction has been achieved. Measures
include the retirement of energy-inefficient
kilns, increased use of renewable energy and
process optimisations.

Renewable energy
In 2023, 58% of Wax Lyrical’s electricity
demand was met by wind-sourced
renewable energy. As part of our plans to
transition towards more renewable energy, in
2024 our plans include the evaluation of the
use of solar technology at our Stoke-on-Trent
production and distribution centre sites.

Innovation and change to meet
environmental challenges
Collaborating within our industry, Portmeirion
Group is exploring the use of alternative fuels,
such as hydrogen, and fuel reduction, and at
the potential to reduce firing temperatures.
Given the energy-intensive nature of
ceramics, decarbonisation presents many
challenges, particularly with the limited
availability of alternative fuels. The Group is
actively exploring technological and material
advancements to address this challenge.

Reducing CO2

During 2023, we continued with our external
review of our current ESG baseline to inform
future strategy for improvements.

+8.5%*

UK Ceramics – tonnes of CO2e per tonne of
saleable product. This rise is largely due to the
average product weight increasing by 3% on the
previous year.

-26.0%*

UK Home Fragrance – tonnes of CO2e per tonne
of saleable product. This decrease is primarily
due to the retirement of energy inefficient
equipment.

+6%*

UK Operations (exc. Retail) – tonnes of CO2e per
tonne of saleable product. Despite being less
efficient, the UK sites consumed 9% less energy
in 2023 (vs 2022).

58%

of energy used at Wax Lyrical operation in 2023
was provided by wind turbine

*2023 compared to 2022.

There is

0% waste

going to landfill from the Stoke-on-Trent operation

59%

of the 857 tonnes of waste generated is recycled and
usually repurposed into a secondary use with the rest
being incinerated (waste to energy). The total volume
of waste generated by UK operations decreased by
15% in 2023 (vs 2022)

All UK operations are accredited at Investor in People
Platinum status; a level only held by the top 4% of
accredited organisations.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report
Our Commitment to ESG continued

Streamlined Energy and Carbon
Reporting (SECR)
From a regulatory perspective the Group
continues to report on its annual UK energy
use, associated greenhouse gas (GHG)
emissions and information relating to our
energy efficiency action, in accordance
with the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018. In the
interests of transparency, we have split out
our reporting for our two manufacturing sites
– our ceramics factory site in Stoke-on-Trent
and home fragrance site in the Lake District.

SECR Methodology Statement
The methodology to calculate
energy and GHG emissions data is in
accordance with the GHG Reporting
Protocol – Corporate Standard and SECR
guidelines.

The following data sources have been
used for the report:

• Electricity and Gas – metered kWh
consumption taken from supplier
invoices;

• Transport Scope 1 – emissions have
been calculated based on mileage
expense claim records and relevant
UK Government GHG conversion
factors depending on fuel type and
assumption of medium sized car; and

• Transport Scope 3 – emissions have
been calculated based on mileage
expense claim records, average UK
Government GHG Conversion factors
and assumption of medium sized
car and UK Government Advisory
fuel rates.

Stoke-on-Trent (ceramics) GHG Emissions and Energy Use Data

Energy consumption used to calculate emissions

kWh

Year ended
31 December 2023

Year ended
31 December 2022

Electricity

Natural gas

Transport

5,966,898

6,408,768

34,633,526

37,798,740

316,487

354,780

Total energy consumption (kWh)

40,916,910

44,562,288

Emissions

Scope 1 emissions

Natural gas

Company owned/leased vehicles

Scope 2 emissions

Electricity

Scope 3 emissions

Year ended
31 December 2023

Year ended
31 December 2022

tonnes CO2e

6,670.5

77.1

7,084.1

88.1

1,266.4

1,274.2

Employee owned car travel (grey fleet)

12.3

7.7

Total SECR emissions (tonnes CO2e)
Intensity metric: tonnes of CO2e per tonne of
saleable product

3.66

3.37

Lake District (home fragrance and personal care) GHG Emissions and Energy
Use Data

Energy consumption used to calculate emissions

Electricity

Natural gas

Transport

Year ended
31 December 2023

Year ended
31 December 2022

kWh

440,993

877,110

9,640

kWh

421,759

1,272,532

7,538

Total energy consumption (kWh)

1,327,742

1,701,829

Emissions

Scope 1 emissions

Natural gas

Company owned/leased vehicles

Scope 2 emissions

Electricity

Scope 3 emissions

Employee owned car travel (grey fleet)

Total SECR emissions (tonnes CO2e)
Intensity metric: tonnes of CO2e per tonne of
saleable product

Year ended
31 December 2023

Year ended
31 December 2022

tonnes CO2e

164.8

2.3

92.4

14.3

237.2

1.8

83.4

21.1

0.19

0.25

22 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportNurturing the best

Our focus on social impact – our people,
our communities and beyond is key to the
success of our organisation.

The Group directly employs 802 employees
worldwide. We are invested in our people;
they are our core asset. From our latest
engagement survey, most respondents
(69%) either agreed or strongly agreed that
Portmeirion Group is an excellent workplace.
Regarding morale, 46% of participants
reported a medium level, while an impressive
38% indicated high morale in their roles at
the Group.

Gender split
Portmeirion Group strives to eliminate
any gender bias in our pay and
employment policies and practices; at
31st December 2023, 64% of managerial
positions held throughout the Group, were
held by female colleagues.

As a Group we recognise all forms of diversity
in our employees and endeavour to promote
a culture of inclusiveness in our workplace to
enhance the success of our business.

Incorporating sustainable
business principles whilst
improving employee engagement,
support and wellbeing
2023 saw the launch of a quarterly Chief
Executive Podcast business update alongside
more regular communications such as
the weekly electronic newsletters for UK
employees. The rollout of digital signage
has begun along with the development of
an intranet that will house Group news,
supporting documents, policies, learning and
development information and much more.
From highlighting individual achievements to
unveiling strategic initiatives and reporting
on our many community projects and
fundraising activities, these news channels
encourage two-way conversations about
the subjects covered. It is part of the
communication evolution at Portmeirion
Group that strives to be an insightful
and engagement-boosting function for
the business.

Learning and development
In our ongoing commitment to nurture our
management team, a series of targeted
training sessions have been delivered. These
sessions encompass a spectrum of vital skills,
including appraisal training, an introduction
to leadership, effective change management,
communication skills and the recognition of
the inherent value within one’s team.

Throughout 2023, our colleagues have
actively pursued their professional growth
through apprenticeship standards ranging
from level 2 to level 7. These endeavours
span diverse roles such as HR, payroll and
sustainability business specialisation. Our
support extends to the progression of our
apprentices, ensuring they continue to refine
and enhance their skills as they navigate their
apprenticeship learning journey.

The year 2023 witnessed the completion of
2,044 training courses, covering an array of
essential topics. Notable courses included
neurodiversity and menopause awareness.
Emphasising our commitment to equality,
diversity and inclusion, every new monthly
paid staff member in the UK is required
to complete the module upon joining our
organisation; this is being extended to the US
in 2024. Additionally, our US warehouse staff
have been assigned the manual handling
module to fortify their safety practices.

Ensuring the continuous proficiency of our
staff is pivotal and this involves reviewing
and updating our existing standard operating
procedures. This initiative guarantees that
our team operates at the requisite level
of skill, competence and compliance. Our
overarching goal is to cultivate a multi-skilled
workforce, fostering agility and adaptability
within our organisational framework.

Health and safety standards
Staff members undergo periodic skill
refreshers to align with the latest versions
of our standard operating procedures. This
ensures adherence to correct processes,
up-to-date health and safety protocols
and compliance with our rigorous quality
standards. Through these proactive
measures, we remain steadfast in our
commitment to excellence and the continual
enhancement of our workforce.

Accreditations
We remain committed to our UK Investors in
People Platinum accreditation by delivering
excellent employee support programmes and
continue to place colleague wellbeing and
development at our core.

Health and wellbeing
Portmeirion Group understand the
importance of employee wellbeing. By
partnering with Westfield Health for UK
colleagues, the Group aims to fortify its
commitment to nurturing a healthy and
supportive work environment.

There are a range of services available,
covering everything from access to mental
health professionals, counselling services,
wellness resources to dental, optical
and podiatry. The goal is to establish a
comprehensive support system that meets
the various needs of staff at all levels within
the business.

Portmeirion Group wish to ensure that
their commitment to employee wellbeing
is not just a checkbox; it is an ongoing and
evolving process. Through the collaboration
with Westfield Health, the company is
dedicated to staying at the forefront of
employee wellness practices, continuously
exploring new ways to enhance the support
structures in place.

To further champion the well-being of our
team, four colleagues have successfully
completed the Domestic Abuse Champions
training. This specialised session empowers
staff to identify signs of domestic abuse,
providing them with the knowledge and skills
to appropriately guide individuals to support
and advice resources.

Partnerships with Mind and other local
organisations, along with plans to facilitate
health and wellbeing workshops and
events through the coming year will bolster
improvement within this area.

Supply chain
Improving supply chain transparency
and supporting our suppliers in applying
Portmeirion Group people principles across
our value chain including opportunities for
training and Health, Safety and Environment
practices remain an important part of
our strategic plans. During 2024, we will
explore opportunities that support beyond
existing legal requirements for our supply
chain. Existing procedures include an ethical
trading supplier code of conduct and regular
compliance audits.

Supporting community
fundraising
In 2023, we made 53 product donations to
local charities, embodying our commitment to
positively impacting our community. In addition,
our collective fundraising efforts have resulted
in over £10,000 donated to local causes, raised
at several staff events throughout the year. We
donated 50 Portmeirion mugs to the brand-new
Dementia Cafe in Uttoxeter. Christmas jumper
day raised funds for local charities at both
Stoke-on-Trent and Lake District locations.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportOur Commitment to ESG continued

Our community family

Connecting with local education
establishments

In line with our global strategy and community
family, we have linked with The Careers &
Enterprise Company to help forge connections
with local education establishments in the
Stoke-on-Trent area to develop employability
and work skills. This has led to a collaboration
with Clayton High School to develop an
awareness and understanding of the ceramic
industry and to highlight career opportunities
within the business.

Students have worked on an Art, Design
and Digital Marketing project to embed
real work skills, develop problem solving
and to showcase their work from design
to conception. The feedback from the
students was positive and the impact on
their confidence and transferrable skills will
support them moving into the world of work.

Supported internships
We are also pleased to collaborate with
Abbey Hill School and College by providing
a supported internship placement for a
student at our Stoke-on-Trent distribution
centre. This initiative is geared towards
offering vital support, equipping the student
with the necessary tools and skills essential
for independent work, thereby facilitating a
smooth transition into gainful employment.
Through this program, we aim to empower

Pictured: Festive cheer and fundraising at our sites during 2023.

and prepare the student for the challenges of
the professional world while fostering their
growth and independence.

Valuable work experiences for
students within our communities
As a business, we have dedicated our efforts
to supporting students by providing them with
valuable work experiences that span a diverse
range of fields within our organisation. This
inclusive approach involves offering hands-on
opportunities for personal and professional
development in various departments.

In the dynamic field of engineering, students
benefit from immersive experiences, gaining
practical insights into engineering practices,
project management and collaborative
problem solving.

In the vibrant world of retail, students
engage in tasks that contribute to the
smooth operation of our retail teams. This
includes customer interactions, inventory
management and first-hand understanding
of the intricacies of retail operations. Through
these experiences, students develop
customer service skills, teamwork, and a keen
understanding of the retail landscape.

By working closely with financial
professionals, students gain insights into
budgeting, financial analysis, and other
crucial aspects of financial management. This
exposure not only enriches their academic
knowledge but also provides a practical
foundation for future endeavours in the
financial sector.

Students are given the chance to work
alongside legal professionals, providing
them with exposure to legal processes,
documentation and the broader legal
framework to foster an appreciation for
the importance of legal compliance in
organisational operations.

We believe that by offering such diverse
opportunities, we are supporting our local
communities to nurture talent, to create
positive futures.

Pictured: As part of our global purpose and sustainability strategy to ‘Craft a Better Future’, we launched a
new project linking with Clayton Hall Academy, a school situated near our Stoke-on-Trent head office.

24 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportCommunity partnership
Hospice wellbeing craft workshops

Bullers rings, known for their role during the
firing of ceramics, have found an unexpected
second act as the star attractions of wellbeing
craft workshops at Douglas Macmillan
Hospice based near our factory and offices
in Stoke-on-Trent. What was once destined
for disposal are turned into a source of joy,
creativity and wellbeing for the hospice
community. As repurposed bullers rings
find their way into the hands of workshop
participants, they symbolise a beautiful blend
of sustainability and creativity.

In 2023, Portmeirion Group North America
initiated collaborations with the New Mexico
Ramp Organisation, a non-profit dedicated
to a mission of providing tools, materials and
infrastructure for constructing wheelchair
ramps across the state. Our volunteer
employees will be involved in the assembly
and construction of wheelchair ramps on a
quarterly basis. By allocating our resources
and manpower to support this cause, we
are not only fulfilling our corporate social
responsibility but also fostering a sense
of community engagement among our
employees.

Recognition and engagement

Key to the retention of our employees is
recognising and rewarding their hard work.
Our reward strategy aims to provide a
package that offers competitive pay and

Pictured: Retirement afternoon tea celebrations.

distinctive benefits. We are committed
to paying the National Living Wage and
within our manufacturing sites we have
implemented high performance working
incentives to recognise and reward
performance within the teams.

Within the UK, all employees are offered
membership to our Group personal pension
plans, which provide employer contributions
for all members, and are included in generous
life cover and healthcare policies. In the
US, all employees are offered benefits
under a 401K employer sponsored defined
contribution pension plan and in Canada
through a Canada Pension Plan to which the
company contributes.

Our UK Division operates employee
recognition schemes including discretionary
incentive schemes, VIP “family and friends”
shopping promotions, retirement afternoon
teas and long service awards. The North
America division operates annual sales
incentive schemes for sales executives and
discretionary bonuses for all employees.

Our employee appraisal process involves
performance measures against a series of
core objectives which are aligned to each
operating unit’s strategic aims.

We’ve distributed 361 thank-you cards to
colleagues across the UK, recognising and
appreciating the outstanding contributions
of each member of our Portmeirion
Group family.

Our UK Division operates Employee and
Team of the Quarter Awards to recognise and
celebrate employee successes. Celebrating
success is a vital component to create a
positive and motivating work environment.
These awards serve as a powerful mechanism
for recognising the outstanding contributions
of individuals and teams, reinforcing a culture
of achievement, and enhancing overall
employee engagement.

Pictured: Creative uses for worn factory materials
as part of the Group’s engagement with a
local hospice.

Pictured: 10 UK colleagues celebrated their long service at a dedicated awards event.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportOur Commitment to ESG continued

Governance

Our sustainability commitments are underpinned by a clear Governance structure. As set out in our “Crafting a Better Future” strategy,
launched in 2023, we are focusing on initiatives to ensure that we maintain sound Governance. These are outlined below.

Initiatives include:

Incorporating sustainability
into responsibilities and
accountabilities at all levels
of the business

Devolve accountability
across the Group

Aligning our commitments
with our risks

Ensure our decision-making
processes reflect our
commitments

Our targets:

• Introduce new sustainability

KPIs in personal
development plans.

• Develop business unit level
environmental and social
targets which align with the
Group commitments; and

• Deliver engagement and

training programme to ensure
all of the Portmeirion Group
community understand how
our commitments relate to their
own roles.

• Ensure all Crafting a Better

• Ensure all our policies,

Future commitments reflect and
are reflected on our corporate
risk register.

procedures and decision-
making check points reflect
our Crafting a Better Future
commitments, including energy
reduction; and

• Continuously review the

external environment to ensure
we fully understand how we
can create the optimum value
for the Group and wider society.

Our progress:

Within personal objectives of the
Chief Executive. For 2024, this
has been extended to the Group
Operations Director.

Working with the Energy Team
from representatives across the
UK business, we are working
to develop targets and drive
engagement.

The Board reviews the corporate
risk register at each board
meeting. Further details on
climate risk are in The Companies
(Strategic Report) (Climate-related
Financial Disclosure) Regulations
2022 Report on pages 27 to 30.

Further details on climate risk
and opportunities are in The
Companies (Strategic Report)
(Climate-related Financial
Disclosure) Regulations 2022
Report on pages 27 to 30.

We understand that our Governance needs to reflect and react to the environment in which we operate.

Our Corporate Governance Statement pages 40 to 45

Section 172(1) Statement pages 18 to 19

Risk Management page 34

Principal Risks and Uncertainties page 35

The Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022 Report pages 27
to 30

26 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report

The Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022 Report

Crafting a Better Future –
our journey to Commit 2040

Our business and brands have a global
footprint and strong history. They are grounded
in family values, craft and a commitment to
making beautiful products that bring people
together and are passed from generation to
generation. We must build our global business
in a way that evolves this heritage to safeguard
the next generation; combining the best of the
past with today’s innovations and designs to
make our business as good as it possibly can
be and create a positive legacy for the future -
for our employees, communities, customers and
the planet.

During 2023, we published our new
sustainable business strategy and roadmap
– Crafting a Better Future - which is aligned
to our commercial strategy to ensure
that sustainability sits at the core of our
business model. Underpinning our strategy
is a clear governance structure led by the
Chief Executive and supported by the
Board in order to effectively manage the
Group’s transition to a net-zero emissions
business by 2040 across our Scope 1 and
2 emissions. More details can be found at
https://www.portmeiriongroup.com/
sustainability and in the Our Commitment to
ESG report on pages 20 to 26.

https://www.portmeiriongroup.com/
sustainability

Our Commitment to ESG
pages 20 to 26

The Task Force on Climate-related Financial
Disclosures (‘TCFD’) requires companies
to identify, measure, quantify and report
on the risks and opportunities of climate
change. This year we present our first
TCFD disclosures in compliance with The

Companies (Strategic Report) (Climate-
related Financial Disclosure) Regulations
2022, Sections 414C, 414A and 414CB of
the Companies Act 2006. Our approach to
TCFD has looked to identify the potential
climate related risks and opportunities that
may impact our business and the plans we
have in place to deal with any risks identified.

Governance
The Group’s business sustainability strategy
and its focus on climate-related matters is
led by the Chief Executive and supported by
the Board who are all accountable for the
sustainability commitments of the Group. The
Board has oversight of climate-related issues
through various channels and initiatives: our
Business Sustainability Committee (including
reviewing the risks and opportunities of climate
change), a UK multi-departmental Energy
Team to assess energy saving opportunities
within our operations and a ‘UK monthly utility
consumption’ report containing cumulative
energy usage of manufacturing sites and
regular SECR reporting. Each of these channels
and reporting mechanisms enable oversight
and the ability to ensure the consideration
and integration of climate issues into business
decisions at top level. Senior management are
also part of the British Ceramic Confederation’s
(rebranded Ceramics-UK) Energy & Emissions
sub group which meets with UK ceramic
manufacturers of goods from homewares to
heavy clay. The group meets on a quarterly
basis to discuss developments and issues
facing the ceramic industry and how risks can
be possibly mitigated.

The Board is ultimately responsible for the
risk management framework of the Group
which includes the climate-related risks and
associated metrics which are reviewed by
the Business Sustainability Committee. The

risks and opportunities in relation to climate
change are identified by senior management
and ultimately reported to the Board
through various means and channels as
detailed above.

The Business Sustainability Committee,
set up during 2023, is chaired by the Chief
Executive and its membership includes
the Group Operations Director, Global HR
Director, Group Company Secretary, UK Head
of Environmental and Global divisional level
management covering human resources,
operations, production, quality, technical,
environmental, finance and governance.
The Committee seeks expertise from all
departments and functions within the
business and is responsible for reviewing and
implementing the Group’s strategy including
its commitment and success to achieving
Net Zero Greenhouse Gas emissions across
Scopes 1 and 2 by 2040 as well as setting
KPIs and monitoring progress against the KPIs.

We have produced disclosures in line with the
current TCFD, but recognise that further work
is required for full TCFD disclosures to be met.
As we develop our understanding of the risks
and opportunities facing the Group we will
consider where appropriate enhancements to
our current disclosures. Our disclosures follow
the recommendations of the TCFD to report
on Governance, Strategy, Risk Management
and Metrics and Targets and in particular the
8 disclosure requirements as prescribed by
the Companies Act.

For more information on our sustainability
strategy and roadmap to Commit 2040 please
see pages 27 and 28

For more information on our Scope 1 and 2
emissions please see pages 21 and 22

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportStrategy
Our sustainable business strategy and
roadmap – Crafting a Better Future – focuses
on three strategic commitments as set out
on pages 20 to 26: Commit 2040, Nurturing
the best and Our Community Family. Our
Commit 2040 pledge has in particular helped
us to identify climate-related risks and
opportunities over three time horizons which
are defined below:

Short-term:

up to five years

Medium-term:

five to ten years; and

Long-term:

beyond ten years

Our identification, understanding and regular
monitoring of our risks and opportunities
means that we are able to engage with our
stakeholders in a fully transparent manner
whilst being able to track our progress so
that we can continue to achieve our climate-
related goals. Figure 1 illustrates our journey
to achieving Net Zero by 2040 based on
Emissions tracked from our existing ESG
exercises as we look to significantly reduce
our Scope 1 & 2 Emissions over the medium
and long-term. Further details can be found
in Our Commitment to ESG report on pages
20 to 26.

During 2023, our senior management team
completed a risks and opportunities register
including a scenario based analysis to better
understand the impact of climate related
risks on our business strategy, over relevant
time horizons. The risks identified in the
Climate Risk Register are centred on the
ceramics production function of the Group.
The decision to focus on this area is due to
ceramic production accounting for the most
significant CO2 emissions and highest raw
material requirement for the Group.

Portmeirion Group considers transitional risks
of climate change a principal risk therefore
our analyses for the current financial year
covers only transition risks as they pose
varying levels of risk in the short, medium
and long term. Whilst Portmeirion Group
recognises physical risks that may be caused
by the effects of climate change leading to
extreme weather events such as excessive
heat, wildfires, drought, changes in water
availability and food security, these risks are
expected to manifest more slowly, most likely
in the long term and beyond for Portmeirion
Group. Therefore, the main focus of the
climate risk register for this financial year was
transition risks and opportunities.

We believe that a scenario analysis is useful
in analysing our climate-related risks and
opportunities to better understand the critical
dependencies of climate change on our
business however, they are not predictions or
forecasts. Our strategy and the potential to
pursue certain opportunities available to the
business may change over time as climate
change trends continue to change. Therefore,
the risks impacting the business may evolve or
change over time and Portmeirion Group will
continue to adapt its strategy as required so
that we can continue on our journey towards
achieving net-zero emissions by 2040.

Our material climate-related risks and
opportunities are outlined on page 29. For
each we have provided an indication of their
potential impact and how they have or may
affect our business, strategy and financial
planning. We have also provided an overview
of possible mitigations available to us. This is
not an exhaustive list and there may be risks
and uncertainties that the Board is not aware
of, or are believed to be immaterial, which
could have an adverse effect on the Group.

The Group has continued its work to define
the roadmap to Commit 2040 as part it’s the
business sustainability strategy.

Figure 1 below: Net Zero 2040 journey based on emissions tracked from our existing ESG exercises

100%

80%

60%

40%

20%

2019:

Baseline

2023:

2024:

Increased awareness
of energy consumption
(behavioural).

Identification of key
focus areas, kiln burner
modifications

Retirement of
energy inefficient
kilns, completion of
process optimisation
projects, installation
of renewable & smart
technology

2035:

Replacement of
aged kilns.

Introduction of 20%
blended hydrogen into
regional gas network,
implementation of
carbon capture,
utilisation and
storage system

2040:

Net Zero Target

28 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportTransition impact -
Risk (description)

Scenario

Time horizon

Impacts assuming
no mitigation

Mitigation of Risk

Opportunities

Transition risk: Market Risk

Raw Materials -
availability of ground
based raw materials

Global
temperature rises
more than 2°C+

Short to
medium term

Transition risk: Market

Energy price volatility

Fuel supply
interruptions

Global
temperature rises
more than 2°C+

Short to
medium term

Increased cost due to
fewer alternative suppliers
and reduced competition.
Potentially longer lead time
if we are forced to purchase
from markets further from
our factories, hindering
our ability to make agile
decisions.

• Researching clay recipe to
reduce the energy required
to fire it;

• investigating ways of

securing raw materials
closer to production sites;
and

• working with suppliers to

secure long term supply of
materials.

• Collaborative approach

with suppliers to develop
more energy efficient
products; and

• substitution of materials
that are identified with
high risk, broadening
our supply options and
reducing reliance on
existing suppliers.

Forecasting production
output and cost of
production will be subject
to greater uncertainty, with
the possibility of factory
shutdowns. Efficiencies
could be lost due to sporadic
shutdowns.

Continuous energy
interruptions may damage
plant and machinery,
reducing their value in use.

Transition risk: Market

Supply Chain: Country
of manufacture may
change to reflect
emissions optimisation
opportunities

Global
temperature rises
more than 2°C+

Medium
Term

Unable to use supplier due
to lack of energy saving
initiatives or capabilities.
Increasing costs to move to
alternative supply.

Transition risk: Policy and legal

Committing to
Net Zero

Medium to
Long-term

Increasing requirements can
increase compliance costs
and so reduce profitability.

Mandatory participation in
Emission Trading Schemes.

Potential increase in
materials and utilities
may impact operating
capacity

Increased threat of
imports replacing UK
made products (Scope 1
and 2 emissions would
be moved to Scope 3)

• Implementation of smart

• Preparation to expand

technology in non-
production areas of the
business;

renewable energy capacity
in advance of DNO
upgrade.

• installation of renewable
technology systems; and

• identifying methods
of electrification via
renewables.

• Review of existing supply
chains to identify high risk
channels;

• collaboration with couriers
with a validated carbon
offset certification;

• engaging with

downstream suppliers
to commit to Portmeirion
Group’s Sustainability
Strategy; and

• engaging with Ceramics
UK and DESNZ to better
understand Government
policy.

• Engaging with Ceramics
UK and DESNZ to better
understand Government
policy;

• identifying high energy
processes/products and
assessing future viability;

• better understanding of

energy efficiencies of new
equipment at the CAPEX
stage; and

• investigating methods of
decreasing kiln thermal
outputs to mitigate risk
of inclusion of Emissions
Trading Schemes.

• Educate supply chain

in energy saving
opportunities.

• Continue holistic approach

to global operations;

• review energy efficiency of

hybrid working;

• improve visibility of scope 3
emissions associated with
employee commutes; and

• identify methods to better

utilise waste streams.

For more information on our sustainability strategy and roadmap to Commit 2040 please see pages 27 and 28

For more information on our Scope 1 and 2 emissions please see pages 21 and 22

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportRisk Management
The Board has overall responsibility for
reviewing the risk management processes
and controls in place within the Group and
ensuring that they are appropriate, which
includes climate-related and ESG risk. The
Group is exposed to a number of climate-
related risks across the markets it operates
in internationally. Risk management is a key
focus of the Board and it is assessed at all
board meetings. The process for identifying,
assessing and managing climate-related
risks is closely integrated with the Group’s
overall risk management process.

The Group has a system of internal controls
monitored by senior management/executive
directors for identification of climate risk
and for taking appropriate action to prevent,
mitigate and manage these risks. The Board
and Business Sustainability Committee
assess and review the external environment
in order to identify any new risks for
consideration. As new risks are identified
during the normal course of business, these
are communicated to the Executive Directors
who meet at least monthly to review ongoing
trading performance. Changes to climate
risks discussed at these meetings are then
provided to the Board. Assessment of risks
takes place at Board meetings, where
a detailed schedule of risks (Group Risk
Register) is considered and updated as
necessary. Risks are graded against a criteria

of likelihood and potential impact in order to
identify the key risks impacting the Group,
including from a climate risk perspective.
Consideration is given to impact, probability
of occurrence, the need to add new risks
or remove previously identified risks, and
finally if the controls in place are sufficient
to mitigate the climate related risks to the
business. The Group Risk Register also
identifies and monitors existing and emerging
regulatory requirements related to climate
change (e.g. limits on emissions) as well as
other relevant factors that may impact the
Group and its strategy.

The Board and Committee will continue to
review existing controls in place to mitigate
risks. As the climate changes with time,
controls that were once appropriate may
need adapting or replacing completely. By
keeping controls up to date, it is ensured
that the Group will be protected, as far as
possible, from the harmful impact of climate
related risks occurring.

For more information on Risk Management and
Principle Risks and Uncertainties see pages 34
to 35

To measure progress against our target
to become net zero by 2040 we have Key
Performance Indicators (KPI) in place and
we have identified tonnes of CO2 per ton of
saleable product as the most suitable metric

for reporting emissions ( across Scope 1 and
2 emissions) as this removes the influence
of externalities not related to operational
processes. This metric of using tonnes of
saleable product also mirrors that used for
determining the Specific Energy Consumption
of our processes. Our climate-related KPIs
also includes the Group’s target to reduce
energy consumption by 30% in 2025.

Data is reviewed annually and tracked
against the objectives set out within our
Commit 2040 objectives (as part of the
Crafting a Better Future strategy).

The Board appreciates and recognises that
further work is required on our mid-term
targets by carrying out in-depth analysis of
the existing data so that these targets remain
meaningfully linked to the Group’s long-term
target. The Group aims to provide further
information on these mid-term targets in the
Company’s next Annual report.

Targets

Time horizon

Our Progress so far

Achieve carbon neutrality by 2040 across our Scope
1 and 2 emissions, defining a pathway that focuses
on maximising the proportion of our energy use from
renewable sources.

Long-term

Project is in place to reduce Scope 1 and 2 emissions for UK operations by 30% by
2025. Collaborations with third parties are being initiated so that opportunities to
reduce emissions can be investigated fully.

All new company vehicles will be fully electric where
possible.

Short term

Since 1 January 2023, all new company vehicles are fully electric. Those not electric
are due to range requirements or lack of charging infrastructure.

Work with our supply chain manufacturing partners
to ensure they support our Commit 2040 plan.

Short to medium
term

Sustainability Code of Conduct drafted and sent out to tier 1 suppliers. This
document details the objectives of the Commit 2040 plan and will allow us to
identify key focus areas within our supply chains.

Develop the role of Global Energy Teams to drive
energy reduction within our operations through
innovation and ‘green thinking’ throughout our Group.

Short term

Sustainability Ambassador successfully introduced in 2023 to allow UK management
and action periods of increased energy consumption. A global dashboard is in
development for rollout to Global representatives of the ESG committee.

Achieve ‘0% to landfill’ across entire UK business,
building on target already achieved in our Stoke-on-
Trent ceramic manufacturing site.

Short term

As of 2023, waste to landfill for all UK production processes is 0%. Waste streams
dashboards are in development to help improve visibility of all waste.

Eliminate single use plastics throughout our
operations.

Short term

Projects are currently underway investigating the potential to replace single use
plastic materials within our operations. These include, substitution of plastic as
packaging or fill material and alternative materials for reed diffuser refills.

Understand our global nature footprint and develop a
Group wide biodiversity plan.

Medium term

Discussions with tier 1 raw material suppliers are currently underway; the objective
is for tier 1 suppliers to fully understand biodiversity risks.

Enhance our materiality assessment to understand
more about our Scope 3 emissions.

Long term

Visibility of scope 3 emissions linked to UK and ROW is currently being monitored
and fed into the business. Methods of better capturing and improved accuracy are
in development to facilitate a cyclic approach to capturing data.

30 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportNon-Financial and Sustainability Statement

Reporting requirement

Relevant information

Policies and standards

Information necessary to understand the Company’s
development, performance and position and the impact of
its activity relating to:

Environmental matters (including the impact of the
Company's business on the environment).

Pages 20 to 31

Page 29

2. The Company’s employees.

Pages 19, 23 to 25 and 35

Page 35

3. Social matters.

Pages 19, 23 to 26 and 60

Pages 23 and 41

4. Respect for human rights.

Pages 35 and 60

Pages 19, 23, 41 and 60

5. Anti-corruption and anti-bribery matters.

Pages 35, 41 and 60

Pages 41 and 60

Required information

6. Description of the Company's business model.

Pages 14 and 15

Description of policies (and any due diligence process
implemented pursuant to those policies) pursued by the
Company in respect of items 1 to 5 above and a description
of the outcome of those policies.

See the sections referred to
above

A clear and reasoned explanation if the Company does not
pursue any policies in respect of the above matters.

Not applicable

Description of the principal risks relating to items 1 to 5
above where relevant and proportionate, a description of
the business relationships, products and services which are
likely to cause adverse impacts in those areas of risk and a
description of how it manages such risks.

Page 35

10. Description of the non-financial key performance indicators

Not applicable

relevant to the Company's business.

11. Where appropriate, references to and additional

explanations of the amounts included in the accounts.

The accounts are produced in
accordance with UK-adopted
international accounting
standards and applicable law.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportFinancial Review

Trading performance impacted
by consumer spending pressures
particularly in US and South Korea

“With sales markets under
pressure the Group focused on
operating cost reduction and
efficiency in working capital,
reducing both inventory levels
and net debt by year end.”

David Sproston
Group Finance Director

Summary
•

Reduced net debt position
due to strong working capital
management.

•

Inventory reduced by
£5.2 million (13%) to
£36.0 million.

Retained significant headroom
within available borrowing
facilities.

In 2023, macro-economic challenges
impacted most of the sales markets the
Group operates in.

Around the world most consumer markets
were impacted by rising inflation and higher
interest rates which reduced consumer
disposable income. Against this backdrop, we
quickly pivoted to reduce operating costs and
drive efficiencies.

We also focused on working capital and net
debt levels during the year and were able to
reduce both in a difficult trading environment.

Revenue
Revenue for the year ended 31 December
2023 totalled £102.7 million, a decrease of
7% over the prior year (2022: £110.8 million).

In North America, our largest sales market,
sales fell by 13% to £42.4 million (2022:
£48.9 million). This reduction was driven by
destocking by major retailers in response to
falling consumer demand due to inflation cost
pressures.

UK sales grew by 9% as we benefitted from
additional home fragrance sales through our
new grocery channel partners and the full
year benefit of sales from the AromaWorks
London brand purchased in August 2022.

In South Korea, sales decreased by 19%
to £21.5 million (2022: £26.7 million) as
consumers reacted to inflation and interest
rate rises, compounded by currency
devaluation against the US dollar.

Rest of World markets increased to
£8.1 million (2022: £7.0 million). We saw
strong growth from our new distribution
relationship in Malaysia which offset weaker
consumer demand in other markets.

Profit
Headline profit before taxation1 was
£3.0 million, a 62% decrease over the 2022
level of £8.0 million. Statutory loss before
taxation was £8.5 million (2022: profit before
taxation of £7.0 million); this was driven by a
£10.9 million non-cash impairment charge on
the home fragrance division.

The profit outturn was negatively impacted
by the reduced sales performance of 7%,
which lowered our operational profit due
to high operational gearing and higher
interest costs.

We were able to reduce our operating cost
base during the year due to headcount
reduction and efficiency savings which
resulted in staff cost savings of £1.9 million,
and following a restructuring exercise over

32 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportEmployees’ Share Trust. These shares have
a book value of £2.7 million, having been
bought at an average cost of £11.58 each.
The balance of these shares did not move
during the year.

As part of our year end processes we
have completed an annual impairment
assessment of our home fragrance division
which was acquired in 2016 for £17.5 million.
The performance of this division has been
materially impacted by Covid and footfall
has shifted from its traditional customer
base to the grocery channel. We have seen
an improved performance from this division
during the year but applying a higher
discount rate to future cash flows (17.5%;
2022: 8.6%), combined with the division
making a lower level of profitability compared
to its original acquisition case, has resulted
in a £10.9 million impairment. The majority
of this impairment sits across goodwill and
intangible assets acquired.

The balance of other intangible assets has
increased during the year particularly in the
US where we completed a major project to
upgrade our main ERP system which allowed
us to integrate our two business units onto
one accounting and operating system.

Treasury and risk management
The impact of transactional currency flows on
the Group’s profit is not material due to the
natural matching of revenue and costs across
our global businesses. In the year sterling
strengthened against both the US dollar and
euro, which decreases our sterling revenue
upon retranslation but this had no material
impact on Group profit.

When any anticipated exposure arises,
our policy is to use appropriate hedging
instruments to mitigate that risk. We have a
robust approach to managing risk to deliver
our strategy as explained on page 34.

David Sproston
Group Finance Director

25 March 2024

the last 3 months we expect to obtain further
significant savings in 2024 to achieve a
reduction of 10% year on year (£4 million).

(1)

Headline profit before taxation excludes

exceptional items – see note 6.

Interest and financing costs
Finance costs for the Group increased by
£0.8 million to £1.8 million (2022: £1.0 million)
as interest rates rose significantly, which
increased the cost of borrowing.

With UK interest rates remaining at higher
levels we expect a similar charge in 2024
before falling back to lower levels as net
debt reduces.

Bank facilities
The Group has agreed debt facilities with
Lloyds Bank which totalled £25.5 million
at the balance sheet date. These facilities
consist of a £10.0 million revolving credit
facility available until February 2025,
a £5.0 million overdraft and a £7.5 million
trade finance facility on annual renewal
cycles, and a £10 million term loan repayable
by January 2025 of which £3.0 million was
outstanding at the year end. Subsequent to
the year end Lloyds extended the revolving
credit facility agreement to September 2025
with a 1+1 annual renewal extension option
(at their discretion) to extend to September
2026 and then September 2027.

Taxation
There was a tax credit for the year of
£0.1 million (2022: tax charge of £1.4 million).
This was mainly due to a deferred taxation
credit due to the non-cash impairment
charge on the home fragrance division.
The underlying corporation tax charge was
£0.3 million.

Our business remains seasonal due to
the second half weighting of our sales.
Consistent with previous years, we
experienced a working capital swing of
around £10.0 million during the year as we
built inventory to match our sales demand.
At the year end we had available cash and
borrowing headroom of £17.6 million.

Dividends
The Board proposes a final dividend of
2.00p per share (2022: 12.00p) giving a
total dividend for the year of 5.50p per share
(2022: 15.50p). The final dividend is expected
to be paid on 31 May 2024 to shareholders
on the register on 26 April 2024, with an ex-
dividend date of 25 April 2024.

Prudently, given the ongoing macro-
economic uncertainty and the continued
prioritisation of further reduction to net debt,
we are paying a dividend covered 3.88 times.
In the medium term we continue to consider
that a dividend at a cover of three times is
appropriate in order to balance our ongoing
investment behind our growth strategy with
providing a positive return to shareholders.

Cash generation and net debt
At 31 December 2023, the Group had
net debt of £7.9 million (comprising cash
and cash equivalents of £0.9 million less
borrowings of £8.8 million). This compares to
net debt of £10.1 million at the prior year end.

Operating cash flow was strong during
the year; operating cash generated was
£10.8 million (2022: £1.6 million), driven
by an improved working capital position
particularly inventory which reduced by
£5.2 million.

Following a period of higher capital
expenditure in recent years we spent
£2.9 million during the year (2022:
£6.0 million). This included the upgrade of
our US ERP system and the installation of a
new automated dipping line and glaze spray
booth in our Stoke-on-Trent factory.

We believe our committed funding lines more
than adequately addresses this seasonal
dynamic and are prudent.

Assets and liabilities
We had a net working capital inflow of
£3.4 million driven by an inventory reduction
over the prior year, partially offset by a lower
payables figure.

We had previously stated our aim to reduce
inventory having seen a significant increase
during 2022, and were pleased to achieve
a reduction of 13% from £41.1 million to
£36.0 million. This was achieved through
stricter inventory planning and selling
through surplus lines.

We expect to see further reductions in
inventory during 2024 with a medium-term
target to get back to 2021 year end volumes.

We have made further contributions to our
closed defined benefit pension scheme and
paid £0.3 million during the year. At the
year end we had an accounting surplus of
£1.1 million, which was an increase from
the surplus of £0.3 million reported in 2021
largely driven by further contributions
and demographic changes. At a gross
level, assets and liabilities remained fairly
consistent following recent volatility. We
continue to evaluate ways to de-risk the
volatility in the scheme, with a medium-term
aim to reach low-dependency.

At 31 December 2023 we held treasury
shares with a book value of £0.4 million
in order to satisfy employee share option
schemes, which had been bought at an
average price of £1.87 per share, equating
to 210,282 shares. In addition, we also
hold 234,523 shares in The Portmeirion

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportRisk Management

Managing risk in order
to deliver our strategy

The Group is exposed to a number of risks in the markets it operates across. The Board considers the risks to
the business and the adequacy of internal controls with regard to the risks identified at every
Board meeting. It formally reviews and documents the principal risks to the business at least annually.

Risk management structure and process

1. Identify risk

3. Mitigate risk

The Board has overall responsibility for
monitoring the Group’s systems of internal
control, for identification of risks and for taking
appropriate action to prevent, mitigate or
manage those risks. The Board will continually
assess and review the business and operating
environment to identify any new risks for
consideration.

2. Assess risk

A detailed schedule of risks is considered
at each Board meeting under the following
categories: macro-economic and political,
continuity and disruption, trading and product,
operational and supplier, accounting and
internal controls, legal and regulatory and
external investment and performance. These
risks are graded against a criteria of likelihood
and potential impact in order to identify
the key risks impacting the Group (see heat
map below).

The Board seeks to ensure that the Group’s
activities do not expose it to significant risk.
The Group’s aim is to diversify sufficiently
to ensure it is not exposed to risk of
concentration in product, market or channel.

4. Update risk register

The risk register is updated at each Board
meeting. The Board meets formally at least
five times each year.

5. Review and evaluate risks

The Board and senior managers are all
responsible for reviewing and evaluating risk.
The Executive Directors meet at least monthly
to review ongoing trading performance,
discuss budgets and forecasts and consider
new risks associated with ongoing trading.

Feedback from these meetings regarding
changes to existing risks or the emergence of
new risks is then provided to the Board.

1.
Identify risk

Risk
management
process

5.
Review
and
evaluate
risks

2.
Assess
risk

4.
Update risk
register

3.
Mitigate
risk

Risk heat map

A graphical representation
of the principal risks and
uncertainties of the Group.

E Economic environment

C Competitors

P People

S Suppliers

F Financial risk

Link to strategy

1 Developing online sales channels

T
C
A
P
M

2 Leveraging our brands

3 Building new markets/geography

4 Developing and launching successful

new product

5 Operating and procurement efficiency

and capabilities

LIKELIHOOD

34 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report
Principal Risks and Uncertainties

Risk

Mitigation

Outlook

Economic environment

Our sales markets around the world
have been impacted by inflationary
pressures, with rising energy costs and
interest rates reducing discretionary
consumer spending.

This has created a difficult trading
environment in our major sales markets.

Competitors

The Group faces strong competition in
most of the major markets in which we
operate. This presents a risk of losing
market share, revenue and profit.

People

Skilled senior managers and personnel
are essential in order to achieve the
strategic objectives of the Group.
Failure to recruit and retain key staff
would present significant operational
difficulties for the Group.

Suppliers

The Group sells into more than 80 countries around the world,
although the majority of sales are concentrated into three key
markets. We continue to monitor the impact of global events in these
markets and any material impact on our business.

The Group maintains close relationships with our key customers
and suppliers to identify any signs of financial difficulties in order
to prevent or limit any potential losses. Customer orders and sales
trends in major markets are constantly reviewed to enable early
action to be taken in the event of declining sales.

The Group continues to invest in our online and digital capabilities
and capacity in order to provide an increasingly direct to consumer
element for product fulfilment.

The Group will continue to monitor
sales trends in our major markets
around the world and ensure we
respond accordingly to any threats
or opportunities.

Link to strategy
1 2 3 4

The risk is managed by ensuring that high quality and innovative
products are brought to market, maintaining strong relationships
with key customers and ensuring the Group is aware of local market
conditions, trends and industry-specific issues and initiatives. This
enables the Group to identify and address any specific matters
within the overall business strategy.

We are increasingly working with partners in our key UK and US
markets on direct to consumer fulfilment, and ensuring we have the
capabilities to meet required service levels.

The Group continues to invest in
both its strong brands and new
product development to provide a
point of difference, whilst working
closely with key customers to
provide a reliable and timely
service.

Link to strategy
1 3

Management seeks to ensure that employees are appropriately
remunerated and good performance is recognised and rewarded.
Staff are also provided with relevant training for their roles and
career progression to improve motivation.

The Group remains committed to
hiring and retaining key personnel
in order for the business to achieve
our strategic objectives.

The Group has a clearly defined recruitment policy which ensures
that new employees meet the required standard and experience for
each position.

Link to strategy
1 2 3 4 5

The Group’s purchasing activities could
expose it to overreliance in certain key
suppliers or markets.

The Group both manufactures and sources product from a range of
suppliers which reduces the impact of inflation or disruption in one
market or supplier.

The lingering impact of Covid-19 to
supply chains has created significant
inflationary cost increases and
disruption through additional lead
times.

Suppliers may not reflect the Group’s
high ethical standards.

Financial risk

Financial risk is wide-ranging and
covers capital management, credit risk,
currency risk and liquidity risk.

The risks presented in these areas
include the failure to achieve business
goals, potential financial loss caused
by default, reduction in profit due to
currency fluctuations, insufficient funds
to continue trading and going concern
threat.

Cyber threats are a key financial risk
the Group faces across our global
business.

For the manufacturing processes in the UK, the Group ensures that
key raw materials are available from more than one source to ensure
continuity and competitive pricing.

For the sourcing process, suppliers are carefully selected to ensure a
sufficient breadth in supply base.

The Group also ensures that all intellectual property rights are retained
and easily transferable should an alternative supplier be required.

All major suppliers are subject to ethics due diligence.

The Group’s approach to risk management and mitigating systems
are covered in the financial risk management objectives in note 32
on pages 98 to 100.

The Group remains profitable and has sufficient headroom within
current borrowings facilities.

The Board have a detailed and robust budget review process and
assess performance, including cash flow and liquidity, as part of
regular management information reviews.

Regular currency forecasts are reviewed in order to ensure the
Group is not detrimentally impacted by any major exchange rate
fluctuations.

We remain vigilant to cyber risks and have a robust framework
in place including external audit to ensure our systems are well
protected.

The Group continues to closely
monitor global supply chains to
ensure our flow of products around
the world is not disrupted.

Link to strategy
2 4 5

The Group has significant
headroom within ongoing
borrowing facilities. The Group
also has a strong natural currency
hedge and continues to monitor
currency fluctuations.

Link to strategy
1 2 3 4 5

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportKey Performance Indicators

Revenue
(£’000)

£102,743

102,743

110,820

106,018

87,854

92,816

Headline operating profit margin
(%)

Own ecommerce sales as a
percentage of UK/US sales (%)

4.7%

4.7

2.5

7.8

7.2

8.4

12.4%

12.4

14.2

14.5

14.6

9.7

Group revenue decreased by 7% in
the year but remains 11% ahead of
pre-pandemic levels.

The Group’s operating margin decreased
to 4.7% due to the reduction in
Group revenue.

Own ecommerce sales fell in 2023 as
consumers in the UK and US felt inflationary
pressures on energy and interest costs,
although through operational efficiencies we
improved contribution from ecommerce sales.

Why we measure it

Revenue growth is the key driver of
business performance and profit growth.

Why we measure it
Operating margin compares all
operating costs incurred against total
revenue, which allows the Group to
assess how effective it has been at
converting costs into revenue.

Why we measure it
Part of the Group’s strategic aim is to
grow our own ecommerce platform sales
as a percentage of total sales, which
translates into both improved gross and
operating margins.

Link to strategy
1 2 3 4 5

Link to strategy
1 2 4 5

Headline basic EPS (p)

Operating cash generation (£’000)

Dividend cover (x)

21.36p

46.59

38.85

4.96

56.32

£10,781

10,781

1,646

8,683

8,722

2,653

3.88

3.00

Nil

6.82

The Group’s headline profit before tax
declined in 2023, which resulted in a
fall in EPS.

Operating cash generation was strong
during the year, benefitting from a positive
working capital movement driven by
inventory reduction.

The Group continues to believe that a
dividend cover of three times is appropriate
to balance return to shareholders with
investment for future growth.

Dividend cover is defined as headline profit
after tax divided by dividends paid and
proposed for the current financial year.

Why we measure it
Headline earnings per share is a shorthand
measure of profitability, as it divides the
post-tax profit in the year by the number of
active shares in issue. As a listed business,
this allows comparability between the
Group and other listed companies.

Why we measure it
Operating cash generation demonstrates
the Group’s ability to ensure operating profit
is translated into operating cash, and that
working capital is appropriately controlled in
order to ensure sufficient cash is available to
provide a return to shareholders.

Link to strategy
1 2 3 4 5

Link to strategy

Link to strategy
1 2 3 4 5

Link to strategy

1 2 3 4 5

1 Developing online sales channels
2 Leveraging our brands
3 Building new markets/geography

4 Developing and launching successful new product
5 Operating and procurement efficiency and capabilities

36 Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic Report

Going Concern and Outlook

Going Concern
The financial statements have been prepared
on a going concern basis. The Group reported
a headline profit before taxation of £3.0 million
(2022: £8.0 million) and a statutory loss before
taxation of £8.5 million after non-underlying
items for the financial year to 31 December 2023,
although the majority of the non-underlying items
was a non-cash impairment charge (2022: profit
before taxation of £7.0 million).
The business activities of the Group, its current
operations and factors likely to affect its future
development, performance and position are set
out in the Chief Executive’s Statement on pages
8 to 11 and in the Financial Review on pages
32 and 33.
In addition, note 32 on pages 98 to 100
includes an analysis of the Group’s financial risk
management objectives, details of its financial
instruments and hedging activities and its
exposures to credit and liquidity risk.
The Group has a formalised process of monthly
budgeting, reporting and review, and information
is provided to the Board of Directors in order to
allow sufficient review to be performed to enable
the Board to ensure the adequacy of resources
available for the Group to achieve its business
objectives.
At the year end the Group had net debt of £7.9
million (comprising cash and cash equivalents
of £0.9 million less borrowings of £8.8 million)
with unutilised bank facilities with available
funding of £16.7 million. This was a reduction in
net debt of £2.2 million since the prior year end.
Operating cash generation was positive during
the year, with cash flow from operations of
£10.8 million (2022: £1.6 million) driven by lower
inventory levels.
The Group has the following bank facilities
available with Lloyds Bank plc:
1. An uncommitted general export finance

facility of £7.5 million on an annual renewal
cycle, available until 30 September 2024.
2. An uncommitted overdraft facility of £5.0

million on an annual renewal cycle, available
until 30 September 2024.

3. A £10 million revolving credit facility available
until 28 February 2025. Subsequent to the
year end, this facility was extended to 30
September 2025, with a further 1+1 option at
Lloyds discretion to extend to 30 September
2026 and then to 30 September 2027.
4. A £10 million term loan repayable in equal
quarterly instalments, followed by a final
instalment on 12 January 2025. At the year
end £3.0 million was remaining on the loan.
Based upon the revolving credit facility renewal
we expect an extension decision in September
2024 which coincides with the general export
finance and overdraft facility renewals.
The Group sells into over 80 countries worldwide
and has a spread of customers and sales channels
within its major UK and US markets with adequate
credit insurance cover in export markets where
required. The Group manufactures approximately
45% of its products and sources the remainder
from a range of third-party suppliers.
There remains ongoing challenges in our sales
markets around the world caused by the negative
impact of inflationary pressures on consumer
spending, but the Group’s performance continues
to remain resilient and we are well diversified with

significant funding headroom available.
The Group has also produced a sensitivity
analysis to its cash flow forecast based upon
possible downside scenarios. We have modelled
a 10% sales reduction to assess the potential
impact of a significant downturn in trading
performance similar to the reduction experienced
in 2020 during the Covid-19 pandemic. This
demonstrated the Group still has sufficient
headroom within borrowing facilities and loan
covenants in light of the overhead reduction
measures already undertaken to reduce
overheads by 10% (£4 million) over 2023.
We have also considered a reverse stress-tested
scenario to try and assess the amount of sales
reduction required before the Group begins
to approach maximum facility and covenant
headroom. This demonstrated that sales could
reduce by approximately 10% before we breached
facility limits or any covenants, assuming no further
mitigating cost actions were undertaken. A number
of additional cost mitigating actions are available
to the Group and are closely monitored in the event
of a sales downturn, and therefore we consider an
event where sales reduce by 10% and no further
cost mitigation is undertaken to be implausible.
These cost savings include headcount reductions
and eliminating non-essential expenditure –
assuming these were undertaken promptly then
sales could reduce by 18% before we breached
facility limits or any covenants. As the sales
downturn during the Covid pandemic in 2020
was only 11% and external market data on the
homeware sector does not forecast a contraction of
this magnitude, we do not consider the likelihood of
an 18% sales reduction to be plausible.
Conclusion – Going concern
assumption appropriate with a
material uncertainty
After making enquiries and reviewing budgets
and forecasts for the Group, the Directors have
a reasonable expectation that the Company
and the Group have adequate resources
to continue in operational existence for the
foreseeable future.
The Directors recognise that the current bank
facilities, which include both a committed
revolving credit facility of £10 million available
until September 2025 and an uncommitted
facility element of £12.5 million available until
September 2024, are all required under both
a base case and downside scenario in order
to provide the Group with sufficient liquidity to
continue trading. Under an unlikely but plausible
scenario by September 2024 Lloyds could decline
their option to extend the committed revolving
credit facility beyond September 2025 and
therefore decide not to renew the uncommitted
facilities at the same date. Under this scenario
alternative third party funding would need to be
secured in order for the Group to meet liabilities
as they fall due and therefore continue as a
going concern.
The Group has a positive and long-standing
relationship with our lenders however, if the
Group could not secure alternative funding by
this date, then the Directors acknowledge that
this represents a material uncertainty which may
cast significant doubt on the Group’s ability to
continue as a going concern.
The Board considers the likelihood of lenders
removing facilities at this date and not being

able to secure an alternative source of funding
to be low, and therefore the Directors have a
reasonable expectation that the Group has
adequate resources to meet its liabilities over a
period of at least twelve months from the date
of signing the financial statements. Accordingly,
they continue to adopt the going concern basis in
preparing the annual report and accounts.
Current Trading & Outlook
In the short-term, we remain cautious about the
ongoing impact of inflation and high interest rates
on consumer spending across our key markets.

We are a geographically diversified business with
around 30% of our annual sales in the UK, 40%
in the US and the remainder across international
markets including Asia.

We expect the US and UK to perform well
and return to modest levels of sales growth
across FY24 with improving gross margins. We
anticipate further progress in ROW markets, a key
part of our long term strategic growth plan. We
also expect significant sales growth in our home
fragrance division, Wax Lyrical, as the business
continues to recover and rebuild post Covid.

We expect sales in our South Korean market to
remain subdued, particularly in the first half as
Asian markets continue to suffer from sluggish
economic conditions. Consumer sentiment in
these markets remains difficult, particularly
in premium department stores and whilst our
brands maintain their market share and remain
highly valued, it will take time for stock levels in
the distribution channels to sell through.

As a result we expect H1 sales to be down on the
previous year, before returning to growth in H2.

We remain focused on our medium and long
term commitment to improve operating margins
with a long term ambition of 12.5%. We have
taken the opportunity in the last few months
to reorganise and restructure our cost base to
provide a significantly leaner operating model to
allow profits and operating margins to improve
more quickly once sales markets around the
world stabilize. As a result, we anticipate
overhead costs will be around 10% (£4 million)
lower in 2024 than the prior year.

We also expect to further reduce inventory and
net debt levels following the good progress
delivered in 2023 generating positive net
cash inflows.

In summary, whilst there are short-term
challenges that we continue to navigate, the
Board remains confident in the long term
prospects for the Group.

Dick Steele
Non-executive Chairman

Mike Raybould
Chief Executive

25 March 2024

Annual Report and Accounts 2023 • Portmeirion Group PLC

Strategic ReportBoard of Directors and Company Secretary

Dick Steele
Non-executive Chairman

Angela Luger
Senior Non-executive Director

Andrew Andrea
Non-executive Director

Responsible for leading the Board and
promoting communication with shareholders.
He is a Fellow of the Institute of Chartered
Accountants in England and Wales and also
a member of the Institute of Taxation.

Other appointments
None.

Key skills

Contributes general management experience
with retail, digital and customer focus.

Other appointments
Angela is Non-executive Director of JD Sports
Fashion Plc, Jet2 plc and Trustee at The Pennies
Foundation. Formerly, she held positions as Non-
executive Director of ScS Group plc, New Look
Retail Holdings Limited, Distribuidora Internacional
de Alimentacion, S.A. (DIA Group) and Manchester
Airport Group. Her previous executive positions
included Chief Executive of N Brown plc, CEO
of The Original Factory Shop Limited and senior
executive positions at Debenhams PLC, ASDA
Group Limited and Mars Corporation.

A qualified Chartered Accountant. He has a
wealth of experience gained in financial and
commercial roles across diverse businesses
including hospitality and retailing. Andrew is
retiring from the Board at the May 2024 AGM.

Other appointments
Andrew is Chief Financial Officer and Executive
Director of C&C Group plc. Formerly he was
the Chief Executive Officer for Marston’s PLC,
having previously held positions as Chief
Financial and Corporate Development Officer.

Prior to joining Marston’s he worked in various
roles with Guinness Brewing Worldwide, Bass
Brewers Limited and Dollond & Aitchison.

Key skills

Clare Askem
Non-executive Director

Jeremy Wilson
Non-executive Director

Moira MacDonald
Group Company Secretary

Contributes a wealth of experience in business
change and digital transformation.

Other appointments
Clare is Senior Independent Director of The
Law Debenture Corporation p.l.c. and Non-
executive Director of IG Design Group PLC.
She has previously held executive roles at
Sainsbury’s (including being the Managing
Director of Habitat), Home Retail Group plc
and Dixons PLC.

Key skills

A qualified chartered accountant with around 30
years’ experience in senior finance roles in a wide
range of industries including support services,
logistics, software and consumer products. From
2010 to 2021 he was Chief Financial Officer in
three international groups of companies, delivering
substantial shareholder value in each. Jeremy
will take over as Chair of the Audit Committee on
Andrew’s retirement at the May 2024 AGM.

Other appointments
Jeremy’s previous executive roles have included
being the Chief Financial Officer at Focusrite plc,
Atex Group Ltd and Regenersis plc. Prior to these
businesses, he had senior finance roles at DHL
Express (UK) Ltd and Electrocomponents plc.

Key skills

Annual Report and Accounts 2023 • Portmeirion Group PLC

A Fellow of The Chartered Governance Institute.
Prior to joining the Group as Deputy Group
Secretary in 2007, Moira was Assistant Company
Secretary at Legal & General Group plc and
at BPB plc.

Other appointments
None.

Key skills

Corporate Governance

Mike Raybould
Chief Executive

David Sproston
Group Finance Director

Oversees the Group’s business and is responsible
for formulating the Group’s objectives and
strategy. Mike is a qualified Chartered Accountant
and was previously the Group Finance Director.
Before joining the Group in 2017, he was the
Chief Financial Officer of the Europe, Middle
East and Africa (EMEA) Floorcare Division of
Techtronic Industries Company Limited, a public
company listed on The Stock Exchange of Hong
Kong Limited.

Other appointments
None.

Key skills

Responsible for all aspects of financial control
and sits on all subsidiary boards. David is a
qualified Chartered Accountant and joined the
Group from Deloitte in 2008. He was previously
Group Financial Controller and Finance Director of
Portmeirion Group UK Limited, the Group’s main
trading subsidiary.

Other appointments
None.

Key skills

Mick Knapper
Group Operations Director

Responsible for Group sourcing, production,
information systems and logistics functions.
Mick joined the Group in 1998 and has been a
member of the board of the Company’s main
operating subsidiary, Portmeirion Group UK
Limited, since 2011.

Other appointments
None.

Key skills

Bill Robedee
Global Sales Director and President,
North America

Bill is responsible for growing the Group’s
key sales markets in the US, UK and South
Korea and heads up the Portmeirion North
America Division. Before joining Nambé as
Chief Executive Officer in 2014, Bill was Chief
Legal Officer at Lenox Holdings Inc. and
General Counsel at Waterford Wedgwood
Royal Doulton.

Other appointments
None.

Key skills

Essential skills and
experience our Board
delivers:

Strategy and
leadership

Brand and
product
development

Operational
expertise

E-commerce,
sales and
marketing

Technology
development

Risk
management

Financial

Governance
and legal

Mergers and
acquisitions

Committee key

R Remuneration Committee
A Audit Committee
N Nomination Committee

Denotes Committee Chairman

Annual Report and Accounts 2023 • Portmeirion Group PLC 39

Corporate Governance

Corporate Governance Statement

“Maintaining good
governance is
fundamental, particularly
in a challenging macro-
economic environment.”

Dick Steele
Non-executive Chairman

Summary
•

Complied with all
principles of the QCA Code
throughout 2023.

•

No significant challenges or
changes to our governance
arrangements.

Good governance remains at
the heart of our business and
we aim to consistently achieve
this across our Global teams.

On 22 March 2023, Angela
Luger took on additional
responsibility as our Senior
Non-executive Director.

On 1 June 2023, we appointed
a new Non-executive Director,
Jeremy Wilson.

Chairman’s introduction

Dear shareholder,

On behalf of the Board, I am pleased to
present Portmeirion Group PLC’s Corporate
Governance Statement for the year ended
31 December 2023. The Board is committed
to ensuring high standards of governance for
the Company and considers that the Quoted
Companies Alliance Corporate Governance
Code 2018 (the “QCA Code”) provides the
most appropriate framework of governance
arrangements for a public company of our
size and complexity. We have complied with
all principles of the QCA Code throughout
the year. Where not already compliant, we
are reviewing our procedures to incorporate
the principles of the new QCA Code 2023
(effective from 1 April 2024) so that we
continue to achieve good practice.

2023 delivered a tough economic
environment that leads us into 2024. Despite
these challenges, we continue to strive to
achieving our strategy, always maintaining
good governance. The continued success of
the Group depends on constantly improving
our brands, products, markets, people and
processes over the years, decades and
centuries.

The Board remains committed to effective
corporate governance as the basis for
promoting the long-term growth and
sustainability of the business for the benefit
of our shareholders and wider stakeholders.
As Chairman of the Board, I am responsible
for ensuring that the Company has corporate
governance arrangements in place which are
appropriate for the size and complexity of
the Company and that these arrangements
are followed in practice. We are committed
to delivering growth in the long term, building
trust through open dialogue and maintaining
a dynamic management framework.

We have sought to ensure that we have a
dynamic governance environment which
allows the business the opportunity to
thrive in the long term, where the Group
works towards its agreed strategy mindful
of its impact on others and the threats and
opportunities faced but is confident in its
robust system of risk management and
internal control. An environment where
open dialogue is encouraged to build trust
and ensure the legitimate motivations and
expectations of both shareholders and
stakeholders are recognised and met and
where a skilled Board sets the culture of the
Company by supporting the Group’s vision
and values.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceShareholder engagement throughout 2023

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Trading
update

Governance letter
to institutional
and larger
shareholders

Annual report and
accounts delivered
to shareholders
and available
on website

Full-year results
announcement and
investor presentation
available on website

Investor Meet
Company engagement
for retail investors

Launch of new
sustainability strategy
and roadmap

Trading update

Annual General Meeting

Trading
update

Interim Results
Announcement and
investor presentation
available on website

Interim report delivered
to shareholders and
available on website

Throughout the year
Updates to corporate website at www.portmeiriongroup.com

Stock exchange announcements on non-financial developments
such as market initiatives

Whilst we have chosen to apply the QCA
Code, we also continue to have regard to the
UK Corporate Governance Code 2018 (the
“UK Corporate Governance Code”) as best
practice guidance and seek to comply with
the UK Corporate Governance Code wherever
this is appropriate for the Company.

the Section 172 (1) Statement on page 18
and 19), the monitoring of the development
of risks to the business and the external
awards and accreditations we receive from
organisations such as Investors in People; of
which both our UK businesses are Platinum
accredited.

As a Board, we are committed to providing
the robust leadership and oversight of the
business required in setting and monitoring
the Company’s culture to ensure that
behaviours align with our purpose, values
and strategy. The Board is very aware that
the tone and culture set by the Board will
greatly impact all aspects of the Group as a
whole and the way that employees behave.
We have a number of policies and procedures
in place to ensure the culture the Board
wants to foster is embedded throughout the
business; these include our Anti-bribery and
Corruption Policy, Whistleblowing Policy
and Modern Slavery Statement (available
at www.portmeiriongroup.com). Where
we acquire a new business or brand, we
are clear to communicate our expectations
to all who work for or in our business.
Further information can be found within
the Our Commitment to ESG section on
pages 20 to 26.

A healthy corporate culture is promoted
within the business in various ways
including by linking employees’ appraisal
objectives and reward and recognition
schemes to our vision and values. The Board
assesses the culture of the Group through
engagement with employees and other
stakeholders (further details can be found in

The Board is satisfied that a culture of
openness, honesty and integrity exists within
the business and is one that is consistent
with our vision to be a leading force in the
global homewares sector. Our business
model and mitigation of our principal risks
rely on positive relationships with key
stakeholders which can only occur if a culture
of openness and integrity exists. We promote
knowledge of our whistle-blowing policies
with employees and suppliers to ensure such
openness is always available.

Our governance framework is kept under
review and was robustly maintained
throughout 2023. We are mindful of and not
complacent to the continued challenging
market environment.

Maintaining a skilled, well-balanced and
experienced Board is of fundamental
importance to the long-term success of
the business. Jeremy Wilson joined us as
a Non-executive Director on 1 June 2023
strengthening the Board with his experience
and expertise in performance management,
business transformation and international
growth. Jeremy will become chair of the Audit
Committee on 21 May 2024 as Andrew
Andrea retires from the Board on that date
at the AGM.

We currently have five Non-executive Directors
alongside four Executive Directors. We have
in place a Board that is extremely capable,
energetic and focused on delivering our
strategy for the benefit of all our stakeholders.
We are of the view that the Board is a balanced
team with constructive scrutiny and challenge
from the Non-executive Directors.

None of the Non-executive Directors have
a material financial, familial or other current
relationship with the company, its Executive
Directors, its independent auditor or other
Board members, except for service on the
Board and standard fees paid for that service
as disclosed in the Directors’ emolument
table on page 55.

2023 results are not where we would like
them to be, however we have achieved sales
which are 11% above pre-Covid 19 levels.
Whilst, the first half of 2024 is likely to remain
challenging due to market conditions, we
expect to see growth across the full year and
we are confident in our long-term strategic
progress and the market share gains we
are achieving. Your Board is determined to
continue to make progress on Portmeirion
Group’s strategic objectives.

Dick Steele

Chairman

25 March 2024

Annual Report and Accounts 2023 • Portmeirion Group PLC 41

Corporate GovernanceCorporate Governance Statement continued

Board of Directors
The Board develops strategy and leads Portmeirion Group to achieve long-term success. It provides leadership and governance to
the Group as a whole, having regard to the views of shareholders and other stakeholders. The formal schedule of matters reserved
to the Board covers, amongst other things: approval of major capital expenditure projects, material contracts, Group policies and
transactions, changes to the Group’s capital, corporate and control structure; approval of the Annual Report and Accounts, financial
reporting, dividend policy and terms of reference; determining the Board’s membership, structure and composition; communication
with shareholders and corporate governance matters; oversight of risk management and internal control systems; and determining
the Group’s strategy, culture, objectives, remuneration policy and budgets.

Audit Committee
Oversees financial and narrative
reporting, provides assurances on
the effectiveness of internal control,
risk management systems and audit
process, and reviews the effectiveness
and objectivity of the external auditors.

Nomination Committee
In reference to skills, knowledge,
experience and diversity required, leads
process for Board appointments and
succession planning for Board and other
senior managers to ensure that they
operate effectively and deliver strategy.

Remuneration Committee
Approves the Remuneration Policy and
total remuneration including long-term
performance objectives and awards for
the Executive Directors and Chairman.

Audit Committee Report
pages 46 and 47

Nomination Committee Report
pages 48 and 49

Directors’ Remuneration Report
pages 50 to 57

Chief Executive
Overall responsibility for day to day management of the business and implementation of approved strategy lies with the Chief
Executive with financial matters managed by the Group Finance Director.

Executive Directors Management Team
Manages all operational aspects of the Group under the direction and leadership of the Chief Executive.

Attendance at meetings

The following table shows the attendance of the Directors at meetings of the Board during 2023:

Total meetings held

Meetings attended

R.J. Steele (Non-executive chairman)

M.T. Raybould (Chief Executive)

A.A. Andrea (Non-executive Director)

C.V. Askem (Non-executive Director)

M.J. Knapper (Group Operations Director)

A.L. Luger (Senior Non-executive Director)

W.J. Robedee (Global Sales Director and President, North America)

D. Sproston (Group Finance Director)

J.M.C. Wilson (Non-executive Director) (appointed 1 June 2023)

Attended

Did not attend

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate Governance

Corporate Governance Statement
This statement describes key features of the
Group’s corporate governance framework,
the work of the Board, its Committees and
management, and how we have applied
our chosen corporate governance code,
the QCA Code.

Delivering growth in the long term
As explained fully within our Strategic Report
on pages 2 to 37 our strategy is focused
around five key areas: developing online sales
channels, leveraging our brands, building new
markets/geography, developing and launching
successful new product and operating and
procurement efficiency and capabilities.
How the Company’s corporate governance
arrangements support our strategy is detailed
within the Our Strategy section on pages 16
and 17. Information on our Business Model
can be found on pages 14 and 15.

Our Strategy pages 16 and 17

Business Model pages 14 and 15

Risk management and internal controls
As with all companies, the Group faces
challenges in the execution and delivery of its
strategy and business model. The environment
in which the Company operates is continually
changing and evolving which presents both
opportunities and risks.

To ensure the Company can capitalise on
these developments whilst protecting the
Group from significant risk, the Company
has a comprehensive risk management and
internal control system in place. Details of
the Group’s principal risks and how these are
addressed can be found on page 35 of the
Strategic Report.

Principal Risks and Uncertainties page 35

The process by which the Board identifies,
assesses and mitigates external business
risks and principal internal control risks and
how the Board gains assurance that the risk
management system is effective is detailed
in the Risk Management section on page 34.
The Board monitors the increasing cyber risk
that the Group faces as with all companies.
This risk and the Group’s mitigation strategy is
overseen by the Board and reviewed at each
Board meeting.

Risk Management page 34

The Board has an established internal control
system for identifying internal control risks.
As might be expected in a Group of this size,
a key control procedure is the day to day
supervision of the business by the Executive
Directors, supported by the senior managers

with responsibility for key operations. The
Executive Directors are involved in the
budget setting process, constantly monitor
key performance indicators and review
management accounts on a monthly basis,
noting and investigating major variances.
Where a new risk is identified, it will be
assessed and then mitigated through the
implementation of an appropriate control. The
adequacy of the systems for internal control is
reviewed at every Board meeting.

Furthermore, the Audit Committee review the
adequacy and effectiveness of the Group’s
internal controls and reports its findings to
the Board on an annual basis. During the
course of these reviews in 2023, no failings
or weaknesses were identified nor have
any been advised to the Board which the
Board has determined to be significant.
The Group’s system of internal control is
designed to identify fraud or material error
and manage, rather than eliminate, the risk
of failure to achieve business objectives,
and so can only provide reasonable and
not absolute assurance against material
misstatement or loss.

The Board has considered the impact of the
values and culture of the Group and ensures
that, through staff communication and
training, the Board’s expectations and attitude
to risk and internal control are embedded in
the business.

Building trust through
open dialogue
Understanding the motivations and
expectations of our shareholders and
stakeholders is imperative. The Board
acknowledges that effective engagement can
only be realised through:

• the opportunity for all shareholders and

stakeholders to feed back their views to the
Company based upon their understanding
of the Group’s strategy and objectives; and

• the presentation of a fair, balanced and

understandable assessment of the Group’s
position and prospects.

During 2023, the Group made progress in
a number of key areas as set out in Our
Strategy section on pages 16 to 17, despite
the challenging macro-economic environment.
Throughout the year, the Board was
committed to ensuring that both shareholders
and stakeholders were regularly updated on
the Group’s progress.

provided in the Section 172 (1) Statement on
pages 18 and 19.

Section 172 (1) Statement pages 18 and 19

The Group provides information about
its progress and strategy through its
Annual and Interim Reports and Accounts,
trading updates, results presentations and
investor roadshows. Investor site visits
allow shareholders to learn more about the
operation of the business.

Key announcements are made through the
London Stock Exchange Regulatory News
Service and on the Announcements section
of the Company’s Investor Relations website.
The Chief Executive and Group Finance
Director engage with retail investors through
the Investor Meet Company forum.

The Chairman, with the support of the
Chief Executive and Group Finance Director,
is responsible for shareholder liaison.
The Chairman talks regularly with the Group’s
major shareholders and ensures that their
views are communicated fully to the Board.
The Chairman writes annually to significant
shareholders offering a meeting to discuss
corporate governance matters. In addition,
meetings with the Chairs of our Committees is
offered. No concerns were raised following this
communication in 2023. The Non-executive
Directors are also offered the opportunity to
attend meetings with major shareholders.

The Board recognises the AGM as an
important opportunity to meet private
shareholders and, as such, normally, all
Directors are and will be in attendance.
The Directors are available to listen to the
views of shareholders informally immediately
following the AGM. If voting decisions at
the AGM are not in line with the Company’s
expectations the Board will engage with
those shareholders to understand and
address any issues. The Chairman and the
Company Secretary are the main points of
contact for such matters. At the AGM held on
23 May 2023, all resolutions were passed with
a significant majority.

The Board understands that dividend income
is important to our shareholders and is
committed to sustainable dividend payments
where this is appropriate. The Board is
recommending a final dividend for the
financial year 2023 as detailed on page 7.

Our Strategy pages 16 to 17

Chairman’s Statement pages 6 and 7

Shareholder engagement
A programme of two-way communication
with both institutional and private investors
takes place each year. Further detail is

Annual Report and Accounts 2023 • Portmeirion Group PLC 43

Corporate Governance

Corporate Governance Statement continued

Building trust through open
dialogue continued
Stakeholder engagement
Our programme of stakeholder engagement
is designed around our assessment of the
materiality and impact of our stakeholders on
the achievement of the Company’s strategy.
Our key stakeholders have been identified via
an assessment of the Group’s business model.
Please refer to Section 172 (1) Statement –
Engaging with key stakeholders to deliver
long-term success on pages 18 and 19, which
forms part of this statement.

Section 172 (1) Statement pages 18 and 19

Maintaining a dynamic
management framework
Board composition and roles
The Board is responsible for the overall
leadership and management of the Group.
The Board comprises four Executive Directors
and five Non-executive Directors. Biographies
of all the Directors appear on pages
38 and 39.

Board of Directors pages 38 and 39

Dick Steele, the Non-executive Chairman, is
responsible for leadership of the Board and
ensuring its effectiveness in all aspects of its
role. Angela Luger, the Senior Non-executive
Director, supports the Non-executive
Chairman in his role; acts as an intermediary
for other Non-executive Directors when
necessary and leads the Non-executive
Directors in the oversight of the Chairman. The
Board believes that there is good opportunity
for shareholders to raise any concerns they
may have with the Non-executive Chairman,
the Senior Non-executive Director, the Chief
Executive, the Group Finance Director, the
other three Non-executive Directors or the
Company Secretary.

The Board delegates day to day responsibility
for managing the business to the Executive
Directors and the senior management team.
Mike Raybould, the Chief Executive, has
executive responsibility for running the Group’s
business and implementing Group strategy.
To ensure suitably defined separation of
the responsibilities of the Board and the
running of the Group’s business, the Board
has a formal schedule of matters reserved
to it (available on the Company’s website at
www.portmeiriongroup.com). The schedule
is reviewed annually and updated when
necessary to ensure its appropriateness.

www.portmeiriongroup.com/our-business/
Corporate-governance/board-responsibilities

Board Committees
The Board has three main Committees which
assist in the discharge of its responsibilities –
the Audit, Nomination and Remuneration
Committees. The Committees are Chaired
by the independent Non-executive Directors
as set out on pages 38 and 39. The terms of
reference for each Committee are reviewed
annually and are available on the Company’s
website at www.portmeiriongroup.com.

Audit Committee Report pages 46 and 47

Nomination Committee Report
pages 48 and 49

Directors’ Remuneration Report
pages 50 to 57

www.portmeiriongroup.com/our-business/
corporate-governance/board-committees

Independence
The expertise and wealth of experience from
across different industries which are brought
by our Non-executive Directors is considered
invaluable to the Company. The Board after
careful review, considers that each Non-
executive Director is independent and brings
an unbiased critical insight, gained from their
experience in high performing companies
completely distinct to our own, to bear
notwithstanding their length of service.
The Board accepts that the Non-executive
Chairman of the Company may not be
considered independent by third parties due
to tenure but is fully satisfied that he provides
the unbiased, critical challenge to the Board
that is required. The Board has considered the
need for progressive refreshing of the Board in
evaluating independence.

All Non-executive Directors have contracts
which expire on the completion of one year’s
notice. These are available for inspection
at the Company’s registered office and at
the AGM. All continuing Directors stand for
re-election on an annual basis in line with
the Company’s articles of association and
recommendations of the UK Corporate
Governance Code. All Directors undergo
a performance evaluation before being
proposed for election/re-election to ensure
that their performance is and continues to
be effective, that where appropriate they
maintain their independence and that they are
demonstrating continued commitment to the
role. Further details of the Board evaluation
process can be found on page 45.

www.portmeiriongroup.com/investors/
aim-rule-26 - see Documents, articles of
association.

For a Board to be successful, it must make
decisions which are in the best interests of the
Company without reference to the interests of

the Directors. In line with the requirements of
the Companies Act 2006, the Directors have
put in place a policy and process for notifying
and recording the nature and extent of their
interests, together with those of connected
persons, in organisations and companies
outside the Group. Each Director must formally
notify the Company if there is potential for
these interests to conflict with their duties as a
Director of the Company. All such notifications
are regularly reviewed by the Board.

Time commitments and meetings
All Non-executive Directors are expected
to devote such time as is necessary for the
proper performance of their duties. This
includes considering all relevant papers
before each meeting and attendance at a
minimum of five Board meetings per year,
separate strategy sessions, the AGM and
such other meetings which are necessary.
The Nomination Committee annually reviews
the time required from Non-executive
Directors, which includes assessing
whether sufficient time is being spent by the
Non-executive Directors to fulfil their duties.

All Directors receive regular and timely
information on the Group’s operational
and financial performance. Relevant
information is circulated to the Directors in
advance of meetings. In addition, minutes
of the meetings of the Directors of the main
operating UK subsidiary, Portmeirion Group
UK Limited, are circulated to the Board.

Skills and experience
Details of each Director’s skills and
experience can be found in the biographies
of the Directors on pages 38 and 39.
The requirement for the Board to have
an appropriate mix of personal qualities
(including diversity and gender balance) and
capabilities is considered in respect of new
Board appointments (further details can be
found in the Nomination Committee Report
on pages 48 and 49), as part of the Board
evaluation process and when addressing
training and development needs of Directors.

Board of Directors and Company Secretary
pages 38 and 39

Nomination Committee Report
pages 48 and 49

www.portmeiriongroup.com/investors/
aim-rule-26 - see Documents, articles of
association.

All Directors have direct access to the advice
and services of the Company Secretary and are
able to take independent professional advice
in the furtherance of their duties, if necessary,
at the Company’s expense. The Company
Secretary’s role includes providing guidance to
the Board on its duties and ensuring that the

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate Governance
Board complies with relevant legislation and the
Articles of Association of the Company.

External advice was sought in relation to
remuneration matters, share schemes and
operational matters.

Board effectiveness
Each year the Board carries out an evaluation
of its own performance in the first quarter
looking at performance in the prior year.
All recommendations arising from the Board’s
evaluations of its performance in 2022 have
been addressed.

Board evaluation process below

As part of the evaluation of 2023
performance, each Director reviewed Board
performance against set criteria covering
areas such as the Board’s approach to risk,
the effectiveness of each Director and Board
communication, as well as reviewing Board
performance in respect of key events in 2023.

Each year, the Board also considers the need
for an external evaluation of its performance.
No external evaluation was conducted in
2023 and none is planned for 2024.

The Audit Committee, Remuneration
Committee and Nomination Committee’s
performance is considered annually as part
of the Board evaluation process outlined
above. Furthermore, the terms of reference
for each Committee are reviewed on an
annual basis against good practice and
appropriate guidelines. As part of this review,
the Committees assess their performance to
ensure they have fulfilled the responsibilities
outlined in the terms of reference. Each
Committee concluded that it had performed
effectively during the year and there were no
specific actions arising from the evaluations.

Audit Committee Report pages 46 and 47

Nomination Committee Report
pages 48 and 49

Specific actions and feedback arising from
the evaluation were:

Directors’ Remuneration Report
pages 50 to 57

1. in light of recommendations from the
Nomination Committee, appoint a
new Non-executive Director. This was
completed on 1 June 2023;

2. the enhanced regular strategic deep dive
sessions were highly rated by the Non-
executive Directors and will continue;

3. regular reporting on macro consumer

sentiment and spending in the Group’s
major markets to the wider Board.

Following the evaluation, the Board is satisfied
that it has a good balance of experience and
skills, which allows both strong collaborative
working and robust challenge.

www.portmeiriongroup.com/our-business/
corporate-governance/board-committees

Induction, training and development
Key to the effectiveness of Board decision
making is a detailed understanding of
the homeware market, our history and
products, the operating environment,
relevant legislation and regulation to which
the Group is subject and the challenges the
Group faces.

All new Directors undertake a comprehensive
induction process following their
appointment to the Board. The induction
would usually consist of main factory and

distribution centre tours, full briefings on the
operation and history of the business, the
role of the Director and the operation of the
Board together with meetings with the senior
management team and Executive Directors.

Existing Directors are provided with ongoing
training, as necessary, by the Company
to ensure they have the requisite skills to
discharge their duties. During 2023, the
Board received AIM compliance training
from its new Nominated Advisor and Broker
(appointed February 2023) and training
specific to roles within the Group including
anti-bribery, data protection and diversity
and inclusion. Tailored Director briefing
notes are provided throughout the year.
All Directors are encouraged to attend
relevant external training, seminars and
conferences to facilitate their continuing
professional development. Where specific
training needs are identified, including as a
result of the Board evaluation process and
individual Director appraisals, the Company
will organise the relevant training. The
Company Secretary supports the Chairman
in addressing the training and development
needs of Directors.

Approval
This report was approved by the Board and
signed on its behalf by:

Dick Steele

Chairman

25 March 2024

Board evaluation process

Preparation

Assessment

Analysis

Action

The Board reviews whether
external evaluation is
appropriate.

For internal evaluation,
as in respect of 2023, the
Chairman and Company
Secretary prepare a Board
evaluation questionnaire
following consideration of
the QCA Code, UK Corporate
Governance Code, industry
guidance and significant
events of the year.

The questionnaire is
circulated to the Board for
consideration with good
time and opportunity for
the whole Board to put
forward additional areas
for inclusion.

The Board is asked to
give feedback on Board
performance to Dick Steele
(Non-executive Chairman)
and to Angela Luger (Senior
Non-executive Director) in
respect of the Chairman.

Feedback from shareholder
engagement (further detail
on page 43) and from
corporate brokers collated
by Chief Executive.

Combined feedback is
discussed by the Board and
actions agreed.

Progress on agreed
actions monitored
throughout the year.

Board evaluation
undertaken each year

Annual Report and Accounts 2023 • Portmeirion Group PLC 45

Corporate GovernanceAudit Committee Report

“The Committee continued
to assist the Board in
fulfilling its commitment
to shareholders and other
stakeholders by monitoring
all aspects of reporting
and risk.”

Andrew Andrea
Chair of the Audit Committee & Non-executive Director

Key responsibilities
The key responsibilities of the
Audit Committee are:

•

monitoring the adequacy
and effectiveness of the
Group’s systems for internal
control, risk management and
compliance;

oversight of the external audit
process and management
of the relationship with the
external auditors;

monitoring the integrity of the
Group’s reporting, financial
statements and accounting
policies; and

reviewing the adequacy of
the Group’s whistle-blowing
arrangements.

The Committee acknowledges
and embraces its role in
protecting the interests of
shareholders and considering the
interests of other stakeholders.

Dear shareholder,

On behalf of the Board, I am pleased to
present the Audit Committee Report for the
year ended 31 December 2023.

Meetings and membership
Meetings are held no less than three times a
year. There is at least one meeting per year
(or part meeting) which the external auditors
attend without the Executive Directors or
management present.

Committee members are all independent
Non-executive Directors. Only members of
the Audit Committee have the right to attend
meetings. When appropriate and necessary,
other Directors and representatives from
the external auditors, Mazars LLP, attend
meetings (in whole or in part) by invitation.

As I retire at the AGM in 2024, I am pleased
to hand over the Chair of the Committee to
Jeremy Wilson with effect from 21 May 2024.
Jeremy has been a member of the Committee
since June 2023 and is a qualified chartered
accountant.

Experience of the Audit Committee
Biographies of each member of the
Committee, including their skills and
experience, can be found on pages 38
and 39. I have recent and relevant financial
experience and am a qualified Chartered

Accountant. We ensure Committee members
have the skills and knowledge relevant to
the remit of the Committee, as well as the
personal attributes to enable us to work with
management and auditors and challenge
matters if needed.

Role and responsibilities
The Audit Committee has terms of
reference in place which have been
approved by the Board and are available at
www.portmeiriongroup.com. The terms of
reference are reviewed annually against good
practice and appropriate guidelines.

Accounting policies and financial
reporting

The Audit Committee monitors the integrity
of the financial statements of the Company,
including the annual and half-yearly reports,
interim management statements and any
other formal announcements relating to the
Company’s financial performance, reviewing
and reporting to the Board on significant
financial reporting issues and judgements
which they contain. Reports provided by the
external auditors on the annual results, which
identify any concerns arising from the auditors’
work undertaken in respect of the year-end
audit, are also reviewed by the Committee.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceAuditors
Annually, the Audit Committee reviews
the relationship the Company has with the
external auditors including the scope of the
audit work, the audit process, fees and audit
independence. The last review, in November
2023, concluded that the Committee was
satisfied with the effectiveness of the
external audit. Mazars LLP have acted as the
Company’s auditors since 2009. The external
auditors are required to rotate the audit
partner responsible for the Company and
subsidiary audits every five years. Mazars
LLP are recommended for reappointment as
auditors at the Annual General Meeting on
21 May 2024.

Non-audit services
The Audit Committee is responsible for
keeping under review the nature and extent
of non-audit services provided by the
external auditors in order to ensure that
objectivity and independence are maintained.
For non-audit work, the Committee has
agreed a policy whereby the Group will not
use the external auditors unless they have
the necessary skills and experience to make
them the most suitable supplier. There are
appropriate safeguards in place to eliminate
or reduce to an acceptable level any threat
to the objectivity and independence of the
external auditors in the provision of non-audit
services. Fees paid to the auditors for
non-audit services are disclosed in note 8
on page 83.

The external auditors have in place processes
to ensure their independence is maintained
including safeguards to ensure that where
they do provide non-audit services their
independence is not threatened. They have
written to the Committee confirming that,
in their opinion, they are independent.

Internal audit
The Audit Committee has considered the
need for an internal audit function, but has
decided that, because of the size of the Group
and the systems and controls in place, it is
not appropriate at present. The Committee
will review this on a regular basis.

Key issues considered in 2023
The Audit Committee considered the
following issues, with management and the
external auditors, in relation to the financial
statements:

• going concern including cash flow
forecasts and banking facilities;

• internal controls;

• assumptions related to the defined benefit

pension scheme;

• impairment of goodwill and intangible

assets, particularly in relation to the home
fragrance division;

Internal control
The Audit Committee’s role in respect of
reviewing the adequacy and effectiveness
of the Group’s internal controls is detailed
in the Corporate Governance Statement on
pages 40 to 45.

Whistle-blowing
The Audit Committee reviews arrangements
by which employees of the Group may,
in confidence, raise concerns about possible
improprieties in matters of financial reporting
or other matters, so seeking to ensure that
appropriate arrangements are in place for the
proportionate and independent investigation
of such concerns and for appropriate
follow-up action.

• revenue and income recognition;

• stock valuation, inventory levels and

provisions;

• the presentation of exceptional items
to ensure consistency with Group’s
accounting policy;

• the data migration to the new accounting

system in the US division;

• recoverability of accounts receivable; and

• climate change and related disclosures.

Andrew Andrea

Chair of the Audit Committee
Non-executive Director

25 March 2024

Attendance at Audit Committee meetings during 2023:

Total meetings held

A.A Andrea (Chair of the Audit Committee)

C.V. Askem

A.L. Luger

J.M.C. Wilson (joined Committee on 1 June 2023)

Attended

Did not attend

Annual Report and Accounts 2023 • Portmeirion Group PLC 47

Corporate Governance

Nomination Committee Report

“Maintaining the right balance
of skills and experience.”

Angela Luger
Chair of the Nomination Committee & Senior Non-executive Director

Board composition and skills
The Committee considers that the current
Board membership provides effective
governance and oversight of the strategic
and significant operational decisions of
the business and performance monitoring.
Information on each of the Directors’ skills
and attributes is set out on pages 38 and 39.

Diversity and inclusion
Diversity and gender inclusiveness are
unequivocally expected in our whole Group.

The Committee recognises the value
of a diverse Board and will consider all
candidates with the necessary capabilities
in accordance with the Company’s policies
on equal opportunities, diversity and
inclusion. The Committee is mindful of the
diversity targets announced by the FCA for
all Main Market listed companies on the
London Stock Exchange.

Key responsibilities
The Committee reviews its terms
of reference on an annual basis.
These describe the Committee’s
responsibilities in detail and they
are available on the Company’s
website. Key responsibilities are:

•

regular review of the
structure, size and
composition (including the
skills, knowledge, experience
and diversity) required of
the Board compared to its
current position and making
recommendations to the Board
with regard to changes;

succession planning for
Directors and other senior
managers taking into
account the challenges and
opportunities facing the Group,
and what skills and expertise
are therefore needed on the
Board in the future; and

prior to any appointment being
made by the Board, evaluating
the composition of the Board
and, in light of this evaluation,
identifying the requirements
of the role and capabilities
required for the appointment.

Dear shareholder,

I am pleased to present our report for the
year ended 31 December 2023 which
summarises our membership and activities
during the year.

Membership and meetings
Only members of the Nomination Committee
have the right to attend meetings. In line
with our conflicts of interest policy, Directors
are asked to absent themselves from any
discussion relating to their own reappointment
or succession.

Meetings are held no less than once per year,
but more frequently when changes to the
Board are planned or in progress.

Roles and responsibilities
The key responsibilities of the Committee
are summarised on this page. Board
composition is a key focus for the Committee,
ensuring that we are maintaining the right
balance of skills and experience to direct the
Company in the successful execution of its
strategy. The Nomination Committee has
terms of reference in place which have been
approved by the Board and are available at
www.portmeiriongroup.com. The terms of
reference are reviewed annually against good
practice and appropriate guidelines.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceDirector training and development
All Directors have the opportunity for ongoing
development and support via:

Focus during 2023
Succession planning continued to be an area
of focus for the Committee during the year.

• a programme of visits to our sites;

• reviews to identify any training and

development needs;

• access to the Company Secretary for
advice on governance, regulatory and
legislative changes affecting the business
or their duties as Director; and

• access to independent professional advice

at the Company’s expense.

Process for new Board appointments
Where new appointments are being
considered, the Committee uses the
services of external advisers to facilitate the
search for external candidates for Board
positions and considers all candidates on
merit and against objective criteria. Prior
to drawing up a specification for a new
appointment, the Committee assesses the
balance of skills, knowledge and experience
required on the Board. It then draws up a
specification against which all candidates are
judged on merit.

Board changes during the year
On 1 June 2023, Jeremy Wilson was
appointed as a Non-executive Director
bringing his expertise in performance
management, business transformation and
international growth to the Board.

Details on our Board evaluation process can
be found within the Corporate Governance
Statement on pages 40 to 45. This informs
our succession planning arrangements.

Looking ahead
The Committee is satisfied that an
appropriate succession plan is in place
for the Board and key members of the
Executive Committee, including emergency
replacements over the short term. Over the
longer term, the Committee will continue
further work to ensure appropriate
appointments are made when current
tenures are approaching and as the
organisation grows and evolves. These will
be considered on a case-by-case basis,
including internal candidates where available.

In 2024, the Committee will undertake a
succession planning pipeline review to
evaluate the gaps and opportunities in our
pool of internal candidates for succession,
in time, to the Board.

Angela Luger

Chair of the Nomination Committee and
Senior Non-executive Director

25 March 2024

Attendance at Nomination Committee meetings during 2023:

Total meetings held

A.L. Luger (Chair of the Nomination Committee)

A.A Andrea

C.V. Askem

R.J.Steele

M.T. Raybould

J.M.C. Wilson (joined Committee on 1 June 2023)

Attended

Did not attend

Annual Report and Accounts 2023 • Portmeirion Group PLC 49

Corporate Governance

Directors’ Remuneration Report

“The Remuneration
Committee sets the overall
policy on remuneration within
the wider business and
stakeholder context.”

Clare Askem
Chair of the Remuneration Committee & Non-executive Director

Key responsibilities
The key responsibilities of the
Remuneration Committee are:

•

review the market competitiveness
of the Remuneration Policy and
the remuneration of the Executive
Directors in context with the pay
policies and practices across the
wider workforce;

agree the incentive policy and
payments for the Executive Directors;

agree the individual share option
and long-term share awards for the
forthcoming financial period;

review the performance measures,
targets and achievement thereof in
relation to share scheme awards;

•

approve the Directors’ Remuneration
Report; and

•

administer the Group’s share schemes.

This report is on the activities of the
Remuneration Committee for the year
ended 31 December 2023 and sets out
the Remuneration Policy and remuneration
details for the Executive and Non-executive
Directors of the Company. As a company
listed on AIM, the Company is not required
to comply with Schedule 8 of the Large
and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 as
amended in August 2013 (the “Regulations”),
nor is it required to comply with the principles
relating to directors’ remuneration in the
UK Corporate Governance Code 2018. The
Committee has considered the principles
set out in the Quoted Companies Alliance
Corporate Governance Code 2018 (the
“QCA Code”) and evolving best practice in
preparing this report. This report has not
been audited. This report, excluding the
Remuneration Policy section, will be subject
to an advisory shareholder vote at the Annual
General Meeting (“AGM”) on 21 May 2024 at
which approval of the financial statements
will be sought.

Attendance at Remuneration Committee meetings during 2023:

Total meetings held

C.V. Askem (Chair of the Remuneration Committee)

A.A Andrea

A.L. Luger

J.M.C. Wilson (joined committee on 1 June 2023)

Attended

Did not attend

Annual Report and Accounts 2023 • Portmeirion Group PLC

Dear shareholder,
I am pleased to present the Directors’
Remuneration Report for the year ended
31 December 2023. This report is split into
four sections: my overview; details of the
Remuneration Committee; the Remuneration
Policy; and the annual report on the application
of Remuneration Policy for the year ended
31 December 2023.

Our Remuneration Policy is designed to be
simple and transparent. This report aims to
provide shareholders with the information to
understand our Remuneration Policy, its linkage
to the Group’s financial performance and
delivery of long-term strategy.

The Remuneration Committee has taken into
consideration the overall performance of the
Group when determining remuneration matters
for 2023 and 2024. The Group’s financial
performance in 2023 is reported in the Strategic
Report on pages 2 to 37. Performance of our
Executive Directors is assessed against a range
of financial and operational measures ensuring
value is delivered to shareholders.

In considering outcomes, the Remuneration
Committee sought to maintain a fair balance
between stakeholders, shareholders, employees
and Executive Directors.

The Group actively supports employees
including through Company funded health and
wellbeing programmes such as that offered by
Westfield Health to all UK employees that are
not in a Group funded private medical scheme.

The Committee monitors employee engagement
and was pleased to see that in the October
2023 survey, 69% of global employee
respondents agreed that Portmeirion Group is
an excellent place to work.

Incentive payments
As a Committee, for 2023, we set challenging
annual incentive targets to provide the
opportunity for the Executive Directors to earn
up to 100% of base salary as a bonus with
70% based on a demanding proﬁt before tax

Corporate Governance

but is also a factor kept under review by the
Committee in determining remuneration policy.

The Committee operates the various incentive
plans according to their respective rules and in
accordance with HMRC rules where relevant.
To ensure the efficient administration of the
plans the Committee has certain operational
powers. These include the determination of
the participants in the plans on an annual
basis; the timing of grants of awards and/or
payments; the quantum of an award and/or
payment; the extent of vesting based on the
assessment of performance; determination of
leaver status and appropriate treatment under
the plans; and annual performance measures
and targets.

The Company has a Shareholding Policy
which requires Executive Directors to build up
(to the extent they have not already done so)
and maintain an ownership of the Company’s
shares to the value of one times annual
basic salary.

The Company recognises that Executive
Directors may be invited to become
Non- executive Directors of other companies
and that this can help broaden the skills
and experience of a Director. All such
appointments must be approved by
the Chairman.

The Committee has reviewed the policy for the
year ahead and has concluded that the key
features of the Remuneration Policy remain
appropriate.

and exceptional items target and 30% based
on personal objectives directly related to
delivering strategic objectives. As reflected in
both the Chairman’s Statement on pages 6
and 7 and the Chief Executive’s Statement on
pages 8 to 11, 2023 was a challenging year
for the business. The Group’s results for 2023
did not reach the required minimum profit
threshold and consequently there will be no
annual incentive paid to Executive Directors
for the year ended 31 December 2023.

Salary and fee increases
Any increases for 2023 are set out in the
Emoluments table and notes to the table
on page 55 and explained on page 54. The
Committee has agreed that there will be
no Executive Director salary increases for
2024. Equally there will be no increases to
Non-executive Director fees for 2024.

Structural changes
There have been no structural changes to the
Remuneration Policy during 2023.

Shareholder engagement
We encourage shareholder feedback
proactively, including by the Chairman of
the Company writing annually to significant
shareholders offering a meeting with either
himself or any of the Chairs of our Committees
to discuss any corporate governance matters.
No concerns were raised on governance or
remuneration matters during this process in
2023, or to date.

Advisory vote
At the AGM to be held on 21 May 2024, this
report, excluding the remuneration policy
section, will again be subject to an “advisory”
shareholder vote (resolution 13).

Each year, we review how shareholders
voted on the Directors’ Remuneration Report,
together with any feedback received. We
were pleased to receive strong support for our
Directors’ Remuneration Report at the 2023
AGM, where 99.98% of the proxy votes lodged
were in favour.

I hope that you find this report a clear account
of the Committee’s approach and remuneration
outcomes for the year. We are committed to
maintaining an open and transparent dialogue
with shareholders. Please do contact me if you
have any comments or concerns regarding
Directors’ remuneration.

Clare Askem

Chair of the Remuneration Committee

25 March 2024

Remuneration Committee
The members of the Remuneration
Committee are set out on page 38. All are
independent Non-executive Directors. Jeremy
Wilson joined the Committee in June 2023.
The terms of reference of the Remuneration
Committee are reviewed annually and
available at www.portmeiriongroup.com.

None of the Committee members have any
personal financial interest (other than as
shareholders), conflicts of interest arising
from cross-directorships or day to day
involvement in running the business. No
Director plays a part in any discussion about
his or her own remuneration.

The Committee meets at least twice a
year. During 2023, the Committee held
three scheduled meetings. In addition, the
Committee held meetings to deal with share
option awards and other related matters.

Pinsent Masons LLP provided advice
on the administration of the Company’s
share schemes in 2023. In determining the
Directors’ remuneration for the year, the
Committee consulted the Chief Executive
about its proposals. The Remuneration
Committee believes that the presence of
the Chief Executive is important when
determining the remuneration of the other
Executive Directors. The Chief Executive does
not participate in discussions relating to his
personal remuneration.

Remuneration Policy
Executive remuneration packages are
prudently designed to attract, motivate and
retain Directors of high calibre and to reward
them for enhancing value to shareholders. The
performance measurement of the Executive
Directors and the determination of their annual
remuneration package is undertaken by the
Remuneration Committee. The remuneration
of the Non-executive Directors is determined
by the Executive Directors.

The Company’s policy is that a substantial
proportion of the remuneration of the
Executive Directors should be performance
related in order to encourage and reward
improving business performance and
shareholder returns.

There are five main elements of the
remuneration package for Executive Directors
and senior management:

• basic salary and benefits;
• pension arrangements;
• annual incentive payments;
• long-term incentives; and
• share option incentives.

In determining the remuneration
arrangements for Executive Directors, the
Committee is sensitive to pay and employment
conditions elsewhere in the Group, especially
when determining base salary increases and
pension arrangements. The culture of the
Group is overseen by the Board as a whole

Annual Report and Accounts 2023 • Portmeirion Group PLC 51

Corporate GovernanceDirectors’ Remuneration Report continued

Remuneration Policy continued

Key aspects of the Remuneration Policy for Executive Directors
The following table provides a summary of the key elements of the remuneration package for Executive Directors:

Purpose and link to strategy

Operation

Maximum opportunity

Performance conditions

Base salary

To provide competitive fixed
remuneration that will attract and
retain key employees and reflect their
experience and position in the Group.

Reviewed annually taking into
account industry-standard
executive remuneration and pay
levels in the wider workforce.

Salaries for the year ended
31 December 2023 are set out on
page 55. Changes in the scope
or responsibilities of a Director’s
role may require an adjustment
to salary levels above the normal
level of increase.

None.

Benefits

To provide market levels of benefits
on a cost-effective basis.

Pension

Providing post-retirement benefits
consistent with those offered to
wider employee base.

Annual incentive

Recognises achievement of annual
objectives which support the short to
medium-term strategy of the Group.

Deferred incentive plan

The Portmeirion Group 2018
Deferred Incentive Plan (“2018
Deferred Incentive Plan”) is used
to incentivise and retain Executive
Directors whilst aligning their
interests with those of shareholders
through delivery and retention of
shares.

Private health cover for the
executive and their family, life
insurance cover of four times
salary, critical illness cover
and a company car (or cash
alternative). Other benefits
may be offered from time to
time broadly in line with market
practice.

Private healthcare benefits are
provided through third-party
providers and therefore the cost
to the Company and the value to
the Director may vary from year
to year.

It is intended the maximum value
of benefits offered will remain
broadly in line with market
practice.

The Group operates defined
contribution pension schemes.

Dependent on the value of the
fund at retirement.

None.

Maximum incentive potential is
100% of basic annual salary.

The performance targets are set
by the Remuneration Committee
at the start of the year with
input, as appropriate, from the
Chief Executive.

Achievement is reviewed by
the Committee to deliver an
outcome consistent with the
Group’s performance.

Discretionary award over
shares with a market value
corresponding to a percentage
of the gross annual incentive
payment earned by the
Executive Director in respect
of the previous financial year.
Awards may not be exercised
before the third anniversary of
the date of grant.

Maximum award is 50% of
the prior year’s gross annual
incentive payment.

The plan allows the
Remuneration Committee to
reduce the value of an Option
granted to an employee (malus),
or to require an employee to
make a repayment in respect
of an Option that he/she has
already exercised (clawback) as
described further on page 54.

Based on achievement
of demanding financial
targets and personal
objectives based on
specific strategic
objectives. The split
of targets between
financial and personal is
set at the start of each
year.

Options under the plan
can only be granted to
the extent performance
targets relating to
the annual incentive
arrangements are met.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceRemuneration Policy continued

Key aspects of the Remuneration Policy for Executive Directors continued

Purpose and link to strategy

Operation

Maximum opportunity

Performance conditions

Set at the time of grant;
for recent grants being
growth in EPS targets
as detailed on pages 54
and 56.

Executive share option plans

Setting value creation through share
price growth as a major objective
for Executive Directors and senior
managers. Alignment of option holder
interests with those of shareholders
through delivery of shares.

The Company has four Executive
Share Option Plans:

The Portmeirion 2012 Approved Share
Option Plan (the “2012 Approved
Plan”) and The Portmeirion 2012
Unapproved Share Option Plan (the
“2012 Unapproved Plan”) (together
the “2012 Plans”) which reached the
end of their 10-year lives in 2022 and
no further options can be granted
thereunder; and

The Portmeirion Group 2022 Approved
Share Option Plan (the “2022
Approved Plan”), and The Portmeirion
Group 2022 Unapproved Share Option
Plan (the “2022 Unapproved Plan”)
(together the “2022 Plans”) which
were approved by shareholders at the
Annual General Meeting in May 2022.

Subject to earnings per
share (EPS) performance
measurement to reflect
operational performance as
EPS is a significant factor in
determining the market’s view
of the Group’s value.

2022 Plans include:

•

malus and clawback
provisions which apply
for a period of two years
after vesting of any option
which apply in specified
circumstances such
as corporate failure or
behaviour which causes
injury to the Company’s
reputation; and

provisions whereby
Executive Directors will be
required to retain the net-of-
tax number of shares which
vest in connection with any
options granted under the
new share plans for a period
of two years after such
vesting.

The 2012 Approved Plan and
The 2022 Approved Plan have a
combined limit of £60,000 for any
“approved” options in accordance
with HMRC limits. Options
granted above the £60,000 limit
are granted under the 2022
Unapproved Plan, or prior to 2023
under the 2012 Unapproved Plan.

The annual limit in the 2022 Plans
is 150% of the individual’s base
salary (although the Remuneration
Committee may grant options in
excess of this limit in exceptional
circumstances). In practice, this
limit has also been adhered to in
the 2012 Plans.

The Remuneration Committee is
permitted to reduce the extent
to which any options under
the 2022 Plans may vest on a
discretionary basis, if it considers
it appropriate to do so taking into
account overall performance of
the Group or the individual option
holder or on account of unforeseen
circumstances.

Key aspects of the Remuneration Policy for Non-executive Directors (including the Chairman)

The following table provides a summary of the key elements of the remuneration package for Non-executive Directors:

Purpose and link to strategy

Operation

Maximum opportunity

Performance conditions

Base fee

To provide competitive fixed fees
in order to procure and retain the
appropriate skills required and
expected time commitment.

Non-executive Director fees are
reviewed on a periodic basis
and are subject to the Articles
of Association. The Board will
exercise judgement in determining
the extent to which Non-executive
Director fees are altered in line
with market practice and rates.

Fees for the year ended
31 December 2023 are set out
on page 55.

None.

Increases above those awarded
for the rest of the Group may
be made to reflect the periodic
nature of any review. Changes
in the scope and responsibilities
of a Director’s role, or the time
commitment required, may require
an adjustment to the level of fees.

Current service contracts and terms
of engagement
It is the Company’s policy that Executive
Directors should have contracts with an
indefinite term providing for a maximum of
one year’s notice. The details of the Executive
Directors’ contracts are summarised in the
table below:

Date of contract

Notice period

M.J. Knapper

01.03.2017

12 months

M.T. Raybould

02.09.2019

12 months

W.J. Robedee

04.08.2020

12 months

D. Sproston

02.09.2019

12 months

In the event of early termination, the
Executive Directors’ contracts provide for
compensation of an amount equal to the
gross salary that the Executive would have
received during the balance of the notice
period, plus any incentive once declared, to
which they would have become entitled had
contractual notice been given.

All Non-executive Directors have service
contracts with an indefinite term providing
for a maximum of one year’s notice, without
liability for compensation. Their remuneration
is determined by the Board taking into account
their duties and the level of fees paid to
Non-executive Directors of similar companies.

All continuing Directors stand for re-election
on an annual basis in line with best practice.
All Directors therefore retire at the Annual
General Meeting to be held on 21 May 2024
and all apart from Andrew Andrea are
offering themselves for re-election. In
addition, Jeremy Wilson is offering himself for
election, having joined the Board since the
last Annual General Meeting.

Annual Report and Accounts 2023 • Portmeirion Group PLC 53

Corporate GovernanceDirectors’ Remuneration Report continued

Consideration of shareholders’ views
The Committee considers shareholder
feedback following the AGM and any
other meetings with shareholders as
part of the Company’s annual review of
Remuneration Policy.

Further details on shareholder engagement
are detailed in the Section 172 (1) Statement
on page 18.

Application of the Remuneration
Policy for the year ended
31 December 2023

Basic salary and benefits
Executive Directors’ base salaries are
determined by the Committee at the beginning
of each year or when responsibilities change. In
deciding the appropriate levels, the Committee
takes into account factors which it considers
necessary including industry-standard
executive remuneration and comparable pay
levels within the wider workforce.

With effect from 1 January 2023:

• Mick Knapper, Mike Raybould and the
Non-executive Directors (including the
Chairman) received a 3.5% increase in
fees, in line with the average paid to UK
office staff within the Group at the time;

• David Sproston received a 16% increase

as part of the phased program of
development of salary to reflect, over time,
increased responsibilities and market rate
following appointment to the Board; and

• Bill Robedee received a 15% increase due
to increased responsibilities in his enlarged
role as Global Sales Director. Whilst Bill
took on the increased role during 2022,
his salary was only increased with effect
from 1 January 2023; this deferment was
explained in the last report.

Given the results of the Group for 2023, there
are to be no salary or fee increases in 2024.

As set out in last year’s report, the Committee
have in place an intended glide path set out
for David Sproston, having reviewed the
salaries of group finance director roles within
businesses of similar size and complexity
to the Group and are cognisant of reflecting
the right rate for the position as role
responsibilities develop and increase. Any
review in this respect has been deferred until
the 2025 year.

Each Executive Director is provided with
healthcare and pension benefits, critical
illness cover, life insurance and a car (or cash
alternative).

Annual incentive payments
Each Executive Directors’ remuneration
package includes an annual incentive payment

opportunity. For 2023, the Executive Directors
had the opportunity to earn up to 100% of
base salary as an incentive payment with 70%
based on a demanding proﬁt before tax and
exceptional items target and 30% based on
personal objectives directly related to strategic
goals. Despite the achievement of particular
personal objectives, as a result of the Group’s
profit performance there will be no annual
incentive paid to Executive Directors for the
year ended 31 December 2023 (2022: 10% of
annual salary).

Deferred incentive plan
The Company operates The Portmeirion
Group 2018 Deferred Incentive Plan (the
“2018 Deferred Incentive Plan”) which
was established to incentivise and retain
Executive Directors and encourage them to
acquire and retain shares in the Company.
The 2018 Deferred Incentive Plan operates in
conjunction with the Group’s existing annual
incentive arrangements.

The 2018 Deferred Incentive Plan permits
the grant of an option to a participant in
any year over shares with a market value
not exceeding 50% of the gross incentive
earned by the relevant employee in respect
of the previous financial year. Options are
exercisable normally only after the third
anniversary of the date of grant.

On exercise, provided that the participant
is still employed by the Group (or has left
due to limited good leaver provisions as
specified in the rules of the 2018 Deferred
Incentive Plan), the participant will be
entitled to receive a “grossed-up” payment
(i.e. a payment which after discharge
of necessary taxes (including National
Insurance contributions) leaves a net amount
sufficient to pay the taxes (including National
Insurance contributions) due in respect of
the exercise of the option (subject to a cap
on the maximum tax and National Insurance
rates covered). The Remuneration Committee
believes this payment is appropriate so as to
ensure that the shares are acquired without
any need to sell the shares to generate cash
to cover tax liabilities.

Options may be satisfied by an issue
of shares (including out of treasury). As
options under the 2018 Deferred Incentive
Plan can only be granted to the extent
performance targets relating to the annual
incentive payment arrangements are met,
the exercise of options granted under the
Plan are not subject to the satisfaction of
performance targets.

Under the 2018 Deferred Incentive Plan, the
Remuneration Committee has the ability to
reduce the value of an option granted to an
employee (malus), or to require an employee
to make a repayment in respect of an option
that he/she has already exercised (clawback),

where certain events have occurred in
relation to the business or to the conduct of
the particular employee. The time limit for the
application of this provision will generally be
five years from the date that the option was
granted (which is a further two years after an
option becomes exercisable).

There were no options exercised under the
2018 Deferred Incentive Plan during 2023.

Executive share option plans
The Company’s policy is to grant options to
Executive Directors at the discretion of the
Remuneration Committee taking into account
individual performance. It is the Company’s
policy to phase the granting of share options
rather than to award them in a single large
block to any individual.

As explained on page 53 of this report,
the Company has four executive share
option plans:

• The Portmeirion 2012 Approved Share

Option Plan (the “2012 Approved Plan”)
and The Portmeirion 2012 Unapproved
Share Option Plan (the “2012 Unapproved
Plan”) (together the “2012 Plans”) which
reached the end of their 10-year lives in
2022 and no further options can be granted
thereunder; and

• The Portmeirion Group 2022 Approved
Share Option Plan (the “2022 Approved
Plan”) and The Portmeirion Group 2022
Unapproved Share Option Plan (the
“2022 Unapproved Plan”) (together the
“2022 Plans”) which were approved by
shareholders at the Annual General Meeting
in May 2022.

These are discretionary schemes, enabling the
grant of options over ordinary shares in the
Company to selected employees of the Group,
with flexibility for the grant of tax- favoured
options. For both schemes, earnings per
share has been selected as the measure of
performance.

Basic adjusted earnings per share is
considered to be an appropriate figure
because it is a significant factor used by
the market in determining the value of the
Company and by the Company in determining
the level of dividend to be paid. These targets
align management interests closely with
those of shareholders. Further details on
the performance measures can be found
on page 56.

Pensions
Annual performance related incentives are
not subject to contributions by the Group to
the pension arrangements maintained for the
Directors. Details of pension contributions paid
by the Group for the benefit of the Directors
are shown in the Directors’ emoluments table
on page 55.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceApplication of the Remuneration Policy for the year ended 31 December 2023 continued

Pensions continued
The majority of the Group’s employees
are based in the UK in Stoke-on-Trent. All
UK Stoke-on-Trent employees, following,
if relevant, a two-year period in the
auto- enrolled Group stakeholder pension
plan, become members of one of two pension
schemes for which the maximum level
of employer’s contribution is determined
according to the employee’s age or years of
service. Membership of the schemes relates
to when the employee first joined the Group.

The maximum pension contribution under
both schemes is 13%. All UK Executive
Directors, namely, Mick Knapper, Mike
Raybould and David Sproston, are members
of the age related contribution scheme at
rates equal to all other employees within the
scheme regardless of role or position within
the Group. The age related contribution
scheme was closed to new entrants on
1 January 2022. All newly appointed
Executive Directors will be enrolled into the
service related scheme.

Bill Robedee, based in the US, received
an employers’ pension contribution of
3% of base salary in 2023 into a defined
contribution scheme on the same terms
and rates as available to the wider US
workforce. Bill Robedee was remunerated in
US dollars and his remuneration disclosures
are translated into sterling as set out in the
emoluments table below.

Directors’ shareholdings
The beneficial interests of Directors in the
share capital of the Company are disclosed
on page 58 in the Report of the Directors.

Aggregate Directors’ remuneration
The total amounts for Directors’ remuneration were as follows:

Emoluments

Deferred incentive plan

Gains made on exercise of share options

Money purchase pension contributions

Directors’ emoluments

2023
£’000

1,434

—

102

1,536

2022
£’000

1,818

—

117

1,983

Executive

J. M. Gale (resigned 7 July 2022)

M.J. Knapper(1,2,3)

M.T. Raybould(1,2,3)

W.J. Robedee(1,2,3,4)

D. Sproston(1,2,3)

Non-executive

A.A. Andrea(1)

C.V. Askem(1,2)

A.L. Luger(1)

R.J. Steele(1)

J.M.C. Wilson (appointed 1 June 2023)

Salary and
fees
£’000

Taxable
benefits
£’000

Incentive
£’000

Deferred
incentive
plan
£’000

Gains made
on exercise of
share options
£’000

Pension
contributions
£’000

Total
2023
£’000

Total
2022
£’000

—

206

404

327

180

123

1,380

—

241

462

367

202

123

411

276

517

353

191

119

—

102

1,536

1,983

Notes:

(1)

(2)

(3)

(4)

Increases with effect 1 January 2023: M. J. Knapper and M.T. Raybould received a 3.5% salary increase in line with the average paid to UK office staff within
the Group. D. Sproston received a 16% salary increase as part of the phased program of development following appointment to the Board. W.J. Robedee
received a 15% salary increase as a result of enhanced responsibilities in his enlarged role as Global Sales Director. Non-executive Directors received a 3.5%
increase in fees in line with the average paid to UK office staff. See page 54 for additional detail.

The taxable benefits shown above for M.J. Knapper, M.T. Raybould and D. Sproston arise from the provision of a company car (or cash alternative), travel and
accommodation allowance, critical illness cover and private medical insurance. The taxable benefits for W.J. Robedee, who is a resident in the US, arose from
the provision of a company car and life assurance. A further £22,000 (2022: £23,000) in non-taxable benefits arose from the provision of, medical and dental
insurance for W.J. Robedee. Non-executive taxable benefits relate to travel expenses.

The pension figures shown above represent the cash value of employer pension contributions received. This includes salary supplement in lieu of a Company
pension contribution.

W.J. Robedee was remunerated in US dollars and his remuneration is translated into sterling at the average exchange rate for the year. In 2023, this was
$1.2436/£1 (2022:$1.2365 /£1).

Annual Report and Accounts 2023 • Portmeirion Group PLC 55

Corporate GovernanceDirectors’ Remuneration Report continued

Application of the Remuneration Policy for the year ended 31 December 2023 continued

Non-executive Directors
The Non-executive Directors do not participate in the Company’s annual incentive, share option or deferred incentive schemes. The Non- executive
Directors do not receive employer’s pension contributions.

Directors’ share options and deferred incentives
Aggregate emoluments disclosed on page 55 do not include any amounts for the value of options to acquire ordinary shares in the Company
granted to or held by the Directors.

Executive share option plans
The Company has four share option plans, the 2012 Approved Plan, the 2012 Unapproved Plan, the 2022 Approved Plan and the 2022
Unapproved Plan, as described on pages 53 and 54.

Performance conditions for options granted in 2021 have not been met and therefore these options will lapse.

Options granted in March 2022 are normally only exercisable if the increase in the average of the Group’s basic adjusted (for changes in
accounting standards and exceptional items) earnings per share for each of the three years ending 31 December 2022, 31 December 2023
and 31 December 2024 is at least 20% higher than that for the year ended 31 December 2021. The calculation of basic adjusted EPS shall
take account of the number of shares and effective tax rates at the date of grant.

Options granted in May 2023 are normally only exercisable if the increase in the average of the Group’s basic adjusted (for changes in
accounting standards and exceptional items) earnings per share for each of the three years ending 31 December 2023, 31 December 2024
and 31 December 2025 is at least 10% higher than that for the year ended 31 December 2022. The calculation of basic adjusted EPS shall
take account of the number of shares and effective tax rates at the date of grant.

Details of options held under these schemes by Directors who served during the year are as follows:

Number of options

Dates on which exercisable

Granted

Exercised

Lapsed

Surrendered

At
31.12.2023

Exercise price
(p)

At
01.01.2023

21,000

30,000

25,000

—

35,000

40,000

50,000

40,000

—

50,000

15,000

30,000

25,000

—

35,000

29,000

30,000

25,000

—

35,000

Director

M.J. Knapper

M.T. Raybould

W.J. Robedee

D. Sproston

Notes:

—

21,000

—

40,000

—

15,000

—

29,000

—

30,000

25,000

35,000

—

50,000

40,000

50,000

—

30,000

25,000

35,000

—

30,000

25,000

35,000

446.00

632.50

570.00

469.00

446.00

632.50

570.00

469.00

446.00

632.50

570.00

469.00

446.00

632.50

570.00

469.00

Earliest

Latest

05.05.2023

03.05.2030

26.03.2024

24.03.2031

26.04.2025

24.04.2032

03.05.2026

01.05.2033

05.05.2023

03.05.2030

26.03.2024

24.03.2031

26.04.2025

24.04.2032

03.05.2026

01.05.2033

05.05.2023

03.05.2030

26.03.2024

24.03.2031

26.04.2025

24.04.2032

03.05.2026

01.05.2033

05.05.2023

03.05.2030

26.03.2024

24.03.2031

26.04.2025

24.04.2032

03.05.2026

01.05.2033

(1)

The performance criteria attaching to share options are detailed above.

(2)

The Company’s share price reached a high of 512.50p and a low of 234.00p during 2023. The average share price during 2023 was 343.03p. The share price
on 29 December 2023, being the last trading day of the year, was 290.00p

(3) There have been no changes to the Directors’ interests in the shares or options over shares of the Company between 31 December 2023 and 25 March 2024.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceApplication of the Remuneration Policy for the year ended 31 December 2023 continued

2018 Deferred Incentive Plan
Details of options held under the 2018 Deferred Incentive Plan by Directors who served during the year are as follows:

Director

M.J. Knapper

M.T. Raybould

W.J. Robedee

D. Sproston

Notes:

At
01.01.2023

Granted

Exercised

Lapsed

At
31.12.2023

Earliest

Latest

Number of options

Dates on which exercisable

5,506

—

2,686

10,813

7,051

—

5,275

—

3,864

4,279

—

2,087

—

5,506

2,686

26.04.2025

24.07.2025

03.05.2026

01.08.2026

10,813

26.04.2025

24.07.2025

5,275

7,051

3,864

4,279

2,087

03.05.2026

01.08.2026

26.04.2025

24.07.2025

03.05.2026

01.08.2026

26.04.2025

24.07.2025

03.05.2026

01.08.2026

(1)

The exercise price payable by the option holder to acquire shares upon the exercise of a 2018 Deferred Incentive Plan option is £1 in respect of all of the shares
under option for that particular award.

There were no options exercised under the 2018 Deferred Incentive Plan by Directors during the year.

Consultations with shareholders and statement of voting at general meeting

At the Annual General Meeting of the Company held on 23 May 2023, a resolution to approve the Directors’ Remuneration Report (excluding
the Directors’ Remuneration Policy contained within that Report) for the year ended 31 December 2022 was put to a shareholders advisory
vote and passed with 6,143,514 proxy votes lodged, of which 99.98% were in favour.

In February 2024, the Chairman of the Company wrote to major shareholders in the Company offering a meeting to discuss corporate
governance matters and a meeting with the Chairs of all Committees, including this one on remuneration. The Chairman of the Company is in
contact with all institutional and other significant shareholders.

Approval
This report was approved by the Board and signed on its behalf by:

Clare Askem

Chair of the Remuneration Committee and Non-executive Director

25 March 2024

Annual Report and Accounts 2023 • Portmeirion Group PLC 57

Corporate GovernanceReport of the Directors

The Directors have pleasure in presenting
their Annual Report on the affairs of
the Group, together with the audited
financial statements of the Company and
its subsidiary undertakings for the year
ended 31 December 2023. The Corporate
Governance Statement set out on pages 40
to 45, The Companies (Strategic Report)
Climate-related Financial Disclosure
Regulations 2022 Report presented on
page 27 to 30 and the Streamlined Energy
& Carbon Reporting (SECR) within the Our
Commitment to ESG section on page 22
forms part of this report.

General information and
principal activities
The Company is a public limited company,
registered in England and Wales and is listed
on AIM of the London Stock Exchange. The
Company has been permanently domiciled in
the UK since incorporation and is the ultimate
parent company of the Portmeirion Group. The
Company’s subsidiaries, subsidiary branch
offices and nature of their business are set out
in note 18 on pages 88 and 89.

The likely future developments in the business
of the Company are set out in the Chief
Executive’s Statement on pages 8 to 11 and
Our Strategy section on pages 16 and 17.

Dividends
On 15 December 2023 an interim dividend
of 3.50p per share (2022: 3.50p per share)
was paid on the ordinary share capital.
Subject to shareholder approval at the AGM
on 21 May 2024, the Board is recommending
payment of a final dividend for 2023 of
2.00p per share (2022: 12.00p), giving total
dividends paid and proposed for the year of
5.50p per share (2022: 15.50p per share).

Directors and their interests
The Directors of the Company are listed on
pages 38 and 39 together with biographical
and Committee membership details. Jeremy
Wilson was appointed to the Board on
1 June 2023. All other Directors served
throughout the year ended 31 December
2023. Further details on the composition
of the Board, the appointment of Directors
and their powers are given in the Corporate
Governance Statement on pages 40 to 45.

All continuing Directors stand for re- election
on an annual basis in line with best practice.
Andrew Andrea, Clare Askem, Mick Knapper,
Angela Luger, Mike Raybould, Bill Robedee,
David Sproston and Dick Steele will therefore
retire at the Annual General Meeting to be
held on 21 May 2024 and all apart from
Andrew Andrea are offering themselves
for re-election. In addition, Jeremy Wilson is
offering himself for election, having joined
the Board since the last Annual General
Meeting. The Board has formally reviewed
the performance of each continuing Director
and concluded that they remain effective and
are committed to their roles.

Directors’ share interests include the interests
of their spouses, civil partners and infant
children or stepchildren as required by section
822 of the Companies Act 2006. There were
no changes in the beneficial interests of the
Directors in the Company’s shares between
31 December 2023 and 25 March 2024.

Details of Directors’ remuneration and
share options are provided in the Directors’
Remuneration Report on pages 50 to 57.

Details of transactions with Directors and
other related parties are to be found in
note 30 on page 94.

Directors’ indemnities

The Company has qualifying third-party
indemnity provisions for the benefit of its
Directors which remain in force at the date of
this report.

Financial risk management
Information about the use of financial
instruments by the Company and its
subsidiaries is given in note 32 on pages 98
to 100. This note also includes information
on financial risk management objectives and
policies, including the policy for hedging and
an assessment of the Group’s exposure to
financial risk.

Capital structure
Details of the share capital in issue, together
with details of the movements in the
Company’s issued share capital during the
year, are shown in note 26 on pages 92
and 93. The Company has one class of
ordinary shares which carry no right to fixed
income. Each share carries the right to one
vote at general meetings of the Company.

There are no specific restrictions on the size of
a holding nor on the transfer of shares, which
are both governed by the general provisions
of the Articles of Association and prevailing
legislation. The Directors are not aware of any
agreements between holders of the Company’s
shares that may result in restrictions on the
transfer of securities or on voting rights.

Details of employee share schemes are set
out in notes 26 and 33 on pages 92 and 93
and pages 100 and 101. Shares held by the
Portmeirion Employees’ Share Trust abstain
from voting.

The Directors who held office at 31 December 2023 had the following beneficial interests in the share capital of the Company:

At 31 December 2023
5p ordinary shares
Beneficial

At 31 December 2022
5p ordinary shares
Beneficial

1,000

—

8,191

3,947

11,886

—

3,815

30,000

—

1,000

—

8,191

3,947

11,886

—

3,815

30,000

—

A.A. Andrea

C.V. Askem

M.J. Knapper

A.L. Luger

M.T. Raybould

W.J. Robedee

D. Sproston

R.J. Steele

J. M. C. Wilson

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceCapital structure continued
No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.

The Company was authorised at the Annual General Meeting held on 23 May 2023 to allot new shares or to grant rights to subscribe for, or
to convert any security into, shares in the Company up to an aggregate nominal value of £466,460. Such authority shall expire at the earlier of
the next Annual General Meeting of the Company or 30 June 2024.

Substantial shareholdings
On 31 December 2023 the Company had been notified, in accordance with chapter 5 of the Disclosure Guidance and Transparency Rules, of
the following beneficial interests in 3% or more of its issued share capital excluding treasury shares:

Trustees of Caroline Fulbright Settlement(3)

AB Traction(3)

Charles Stanley Group PLC(3)

Henry Spain Investment Limited(3)

Shahrzad Farhadi

Kamrouz Farhadi

Notes:

Percentage of
voting rights
and issued
share capital(1)

12.81%

11.33%

10.89%

6.39%

4.52%

4.02%

Number of
ordinary shares

1,792,272

1,585,158

1,523,968

893,603

632,333

562,917

(1) The percentages are of the total shares in issue, excluding treasury shares (13,993,805).

(2) All holdings are direct holdings unless otherwise indicated.

(3) Shareholding held indirectly through a nominee.

Other than as disclosed above, during the period between 31 December 2023 and 25 March 2024, the Company did not receive any
notifications under chapter 5 of the Disclosure Guidance and Transparency Rules.

Acquisition of the Company’s
own shares
The Directors’ authority to make purchases of
the Company’s shares on its behalf is given
by resolution of the shareholders annually at
the Company’s AGM. The Company did not
purchase any of its own shares during the
year. The Company holds 210,282 treasury
shares, purchased at an average cost of
187.00p per share.

The Portmeirion Employees’ Share Trust
(the “Trust”) facilitates the acquisition and
holding of shares in the Company by and for
the benefit of the employees of the Group.
The shares are held in the Trust to provide
for awards under employee share option
schemes. During 2023, the Trust did not
purchase any shares and no shares were
transferred from the Trust. The Trust holds
a total of 234,523 shares representing
approximately 1.68% of the issued share
capital of the Company excluding treasury
shares as at 25 March 2024.

Annual General Meeting
The Annual General Meeting will be held
at the registered office of the Company at
London Road, Stoke-on-Trent, on 21 May 2024
at 12:00 noon (the “2024 AGM”).

All ordinary and special resolutions to be
proposed at that meeting are detailed
in the Notice of Annual General Meeting
which is contained in a separate circular to
shareholders and on the Company’s website
at www.portmeiriongroup.com/investors/
shareholder-information/notice-agms.

retrain any member of staff who develops a
disability during employment with the Group.

Share option and profit related incentive
schemes are operated to encourage the
involvement of more senior employees in the
Group’s performance.

Employees
Details of how the Directors have engaged
with employees are set out in the Section
172 (1) Statement on pages 18 and 19. The
Group’s UK operating subsidiaries are both
Investors in People at Platinum level. Details
of staff numbers and costs are set out in
note 7 on page 83.

The Group has an Equal Opportunities
Policy and is committed to ensuring that all
employees are treated fairly, regardless of age,
gender, race, marital status, sexual orientation,
religion or disability. It is the Group’s
policy to give disabled people full and fair
consideration for all job vacancies for which
they offer themselves as suitable candidates,
having regard to their particular aptitudes
and abilities, including the consideration of
any reasonable adjustments to the job or
workplace. Training and career development
opportunities are available to all employees
and, if necessary, all efforts are made to

The Group strives to ensure that it meets
employees’ expectations of a safe place to
work, security of employment, fair treatment
and access to training. Details of how the
Board has had regard to the interests of the
Group’s employees can be found in the Our
Commitment to ESG statement on pages 20
to 26 and in the Section 172 (1) Statement on
pages 18 and 19.

Ethical business practices
To be successful in the long-term, the
Group must establish and maintain positive
business relationships with its stakeholders,
including its suppliers and customers.

Details of how the Board has engaged
with the Group’s key stakeholders, and the
resulting outcomes of this engagement, can
be found in the Section 172 (1) Statement
on pages 18 and 19, together with details
of how the Board has had regard to the
interests of the Group’s stakeholders.

Annual Report and Accounts 2023 • Portmeirion Group PLC 59

Corporate GovernanceReport of the Directors continued

Ethical business practices continued
Respect for human rights is fundamental
to the Group and is embedded in our
business practices and policies to ensure
honesty, integrity and respect for people.
Some examples are included below and
in the Our Commitment to ESG report on
pages 20 to 26.

The Group has a zero tolerance approach to
bribery and corruption and is committed to
ensuring that it has effective processes and
procedures in place to counter the risk of
bribery and corruption. A formal anti-bribery
policy is in place and training is undertaken
annually. The policy and procedures in place
are reviewed on a regular basis by the Board.

The Group has whistle-blowing policies.
Our Global HR Director and Group Company
Secretary are available for all employees,
contractors, suppliers and other stakeholders
to confidentially raise concerns in relation to
improper, unethical or illegal practices. We are
committed to dealing with all whistle-blowing
reports and ensure those who raise concerns
are protected from retaliation.

In compliance with the Modern Slavery
Act 2015, the Company’s Transparency
Statement on Human Trafficking and Modern
Slavery can be found on the Company’s
website at www.portmeiriongroup.com.

Research and development
The Group continues to research methods of
tackling the environmental issues facing it as
a tableware, giftware, home fragrance and
hand care manufacturer whilst improving
operating efficiency. The development of
innovative new products and designs is a key
part of the Group’s strategy.

Climate-related Financial Disclosure
The Group recognises that the impact of
climate changes presents various risks to our
environment but that it also presents financial
risk to our business and the global economy.
We have prepared The Companies (Strategic
Report) (Climate-related Financial Disclosure)
Regulations 2022 Report for the first year in
line with The Companies (Strategic Report)
(Climate-related Financial Disclosure)
Regulations 2022, Sections 414C, 414CA
and 414CB of the Companies Act 2006. This
report can be found on pages 27 to 30.

Streamlined Energy & Carbon
Reporting (SECR)
The Group is required to disclose its annual
UK energy use, associated greenhouse gas
(GHG) emissions and information relating
to its energy efficiency action, as specified
under the Companies (Directors’ Report)
and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018. Our
SECR disclosure is set out in the Environment
section of Our Commitment to ESG statement
on pages 20 to 26.

Political contributions
There were no political contributions during
the year (2022: nil).

Post balance sheet events
Post balance sheet events are detailed in
note 34 on page 101.

Auditors
Each of the persons who are Directors at
the date of approval of this Annual Report
confirms that:

1. so far as the Director is aware, there is no
relevant audit information of which the
Company’s auditors are unaware; and

2. the Director has taken all the steps that
he/she ought to have taken as a Director
in order to make himself/herself aware
of any relevant audit information and to
establish that the Company’s auditors are
aware of that information.

This confirmation is given and should be
interpreted in accordance with the provisions
of section 418 of the Companies Act 2006.

Mazars LLP have expressed their willingness
to continue in office as auditors and a
resolution to reappoint them will be proposed
at the forthcoming Annual General Meeting.

Corporate governance
The Company’s statement on corporate
governance can be found on pages 40 to 45.

Approved by the Board of Directors and
signed on behalf of the Board.

Moira MacDonald

Company Secretary

25 March 2024

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceStatement of Directors’ Responsibilities

The Directors are responsible for keeping
proper accounting records that disclose with
reasonable accuracy at any time the financial
position of the Group and the Company and
enable them to ensure that the Group and the
Company financial statements comply with the
Companies Act 2006. They are also responsible
for safeguarding the assets of the Group and
the Company and hence for taking reasonable
steps for the prevention and detection of fraud
and other irregularities.

The Directors are responsible for the
maintenance and integrity of the corporate and
financial information included on the Group’s
website. Legislation in the United Kingdom
governing the preparation and dissemination of
financial statements may differ from legislation
in other jurisdictions.

The Directors are responsible for preparing
the Strategic Report, the Report of the
Directors and the financial statements
in accordance with applicable law and
regulations.

Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the Directors
have prepared the Group and Company
financial statements in accordance with
international accounting standards (IFRS)
in conformity with the requirements of the
Companies Act 2006.

International Accounting Standard 1
requires that IFRS financial statements
present fairly for each financial year the
Group and Company financial position,
financial performance and cash flows.
This requires the fair representation of
the effects of transactions, other events
and conditions in accordance with the
definitions and recognition criteria for assets,
liabilities, income and expenses set out in
the International Accounting Standards
Board’s “Framework for the preparation
and presentation of financial statements”.
In virtually all circumstances, a fair
presentation will be achieved by compliance
with all applicable IFRS. Directors are also
required to:

• properly select and apply accounting

policies;

• make judgements and accounting

estimates that are reasonable and prudent;

• state whether international accounting

standards in conformity with the
requirements of the Companies Act 2006
have been followed subject to any material
departures disclosed and explained in the
financial statements;

• present information, including accounting

policies, in a manner that provides relevant,
reliable, comparable and understandable
information; and

• provide additional disclosures when

compliance with the specific requirements
in IFRS are insufficient to enable users
to understand the impact of particular
transactions, other events and conditions
on the entity’s financial position and
financial performance.

The Directors have elected to prepare the
Company financial statements in accordance
with international accounting standards
in conformity with the requirements of the
Companies Act 2006. The Company financial
statements are required by law to give a
true and fair view of the state of affairs of
the Company. In preparing these financial
statements, the Directors are required to:

• select suitable accounting policies and then

apply them consistently;

• make judgements and estimates that are

reasonable and prudent;

• state whether international accounting

standards in conformity with the
requirements of the Companies Act 2006
have been followed subject to any material
departures disclosed and explained in the
financial statements; and

• prepare the financial statements on the

going concern basis unless it is
inappropriate to presume that the
Company will continue in business.

Annual Report and Accounts 2023 • Portmeirion Group PLC 61

Corporate GovernanceIndependent Auditor’s Report
to the members of Portmeirion Group PLC

Opinion
We have audited the financial statements
of Portmeirion Group PLC (the ‘parent
Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2023
which comprise the Consolidated Income
Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated
Balance Sheet, the Company Balance Sheet,
the Consolidated Statement of Changes in
Equity, the Company Statement of Changes
in Equity, the Consolidated Statement of
Cash Flows, the Company Statement of Cash
Flows and notes to the financial statements,
including material accounting policy
information.

The financial reporting framework that
has been applied in their preparation is
applicable law and UK-adopted international
accounting standards and, as regards to the
parent Company financial statements, as
applied in accordance with the provisions of
the Companies Act 2006.

In our opinion, the financial statements:

•

give a true and fair view of the state of
the Group’s and of the parent Company’s
affairs as at 31 December 2023 and of the
Group’s loss for the year then ended;

have been properly prepared in
accordance with UK-adopted international
accounting standards and, as regards
to the parent Company financial
statements, as applied in accordance
with the provisions of the Companies
Act 2006; and

•

have been prepared in accordance
with the requirements of the
Companies Act 2006.

Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards
are further described in the “Auditor’s
responsibilities for the audit of the financial
statements” section of our report. We are
independent of the Group and the parent
Company in accordance with the ethical
requirements that are relevant to our audit of
the financial statements in the UK, including
the FRC’s Ethical Standard, as applied to SME
listed entities, and we have fulfilled our other
ethical responsibilities in accordance with
these requirements. We believe that the audit
evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.

Material uncertainty related to
going concern
We draw attention to page 75 in the financial
statements which indicate that the Group
is reliant upon continued availability of
its banking facilities to provide sufficient
liquidity to meet liabilities as they fall due;
the Group is reliant on the existing lender
renewing facilities in September 2024 or
will be required to seek alternative third-
party funding.

As stated in note 1, these events or
conditions, along with the other matters
as set forth in this note to the financial
statements, indicate that a material
uncertainty exists that may cast significant
doubt on the Group’s and parent Company’s
ability to continue as a going concern.
Our opinion is not modified in respect of
this matter.

Our evaluation of the directors’ assessment
of the Group’s and the parent Company’s
ability to continue to adopt the going concern
basis of accounting included, but was not
limited to:

•

Undertaking an initial assessment at the
planning stage of the audit to identify
events or conditions that may cast
significant doubt on the Group’s and the
parent Company’s ability to continue as a
going concern;

Making enquiries of the directors to
understand the going concern review
period used by the directors, ensuring that
the period assessed by them is at least 12
months from the date of signing;

Critically assessing the going concern
assessment performed by the directors
and assessing the reasonableness of the
assumptions used by the directors’ in their
forecasts;

Challenging management on the
completeness of the stress test scenarios
applied to the assessment, including
with reference to the board’s identified
business risks;

Evaluating the Group’s performance in
the year as well as post year information
available.

Challenging the accuracy of prior budgets,
including retrospective review, and the
rationale and support for any deviations in
budget to outturn;

•

Verifying that the estimates and
judgements made in respect of going
concern are consistent with the financial
statements as a whole, specifically with
respect to the assumptions relating
to critical/significant estimates and
judgements;

Inspecting borrowing agreements
and assessing whether compliance
with borrowing terms, including
repayment and covenant compliance,
have been appropriately factored into
the assessment, including in stressed
scenarios;

Making enquiries with the bank to
ascertain the view of re-negotiating bank
facilities and critically assessing the re-
negotiated facilities;

Inspecting the changes in terms and
conditions of the financing facilities and
covenants, and any changes in the terms
that may impact conclusions in relation to
material uncertainties;

Challenging management on the
likelihood of breaking covenants and
assessing mitigating actions available to
management;

Our responsibilities and the responsibilities
of the directors with respect to going concern
are described in the relevant sections of
this report.

Key audit matters
Key audit matters are those matters that, in
our professional judgement, were of most
significance in our audit of the financial
statements of the current period and
include the most significant assessed risks
of material misstatement (whether or not
due to fraud) we identified, including those
which had the greatest effect on: the overall
audit strategy; the allocation of resources
in the audit; and directing the efforts of the
engagement team. These matters were
addressed in the context of our audit of
the financial statements as a whole, and in
forming our opinion thereon, and we do not
provide a separate opinion on these matters.

The matters set out below are in addition
to the “Material uncertainty related to going
concern” above which, by its nature, is also a
key audit matter.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceKey Audit Matter

Revenue recognition

The Group’s accounting policy for revenue
recognition is set out in the accounting policy note
on page 76 and the disclosure note on page 80.

Revenue recognition is considered as a key audit
matter because revenues are a key financial
performance measure which could create
an incentive for revenues to be recognised
prematurely or inappropriately.

For Portmeirion Group plc we identify the risk of
fraud in revenue recognition as being principally
in relation to occurrence of revenue, and cut off in
relation to export sales.

Occurrence of Revenue

There is a risk that revenue that has been
recognised did not occur, or the inflows into the
bank accounts do not relate to revenue from
standard business activities.

Revenue recognition for export sales

Due to the length of time it takes for an export sale
to ship, there is a risk that sales close to the year-end
could be accounted for incorrectly. There is a risk that
revenue is recognised prior to meeting the performance
obligation of transferring inventory to the customer.

How our scope addressed this matter

Our audit procedures included, but were not limited to:

Occurrence of Revenue

•

Performed a substantive revenue to cash reconciliation. For reconciling items in
the year, we disaggregated these into relevant categories and tested a sample to
supporting documentation.

Performed tests of detail over the cash reconciliation to ensure the transactions are
truly revenue.

Performed manual control effectiveness testing that support revenue occurrence.

Utilising data analytics to identify and test outliers to revenue transactions and
journals posted during the year.

Critically assessed customer terms of trade, including discount and rebates,
vouching these to supporting contracts and ensuring revenue recognition is in line
with IFRS 15.

Revenue recognition from export sale

•

Focused on export sales made in December and ensured the cut off between sales
is reflective of the year end position and the performance obligation which triggers
the revenue recognition has been met.

Our observations

The results of our testing were satisfactory. No significant matters or findings have
been reported to the audit committee.

Inventory Valuation

Our audit procedures included, but were not limited to:

Inventory accounts for 63% of total current assets
of the Group.

The Group’s accounting policy for inventory
provisioning is set out in the accounting policy
notes on pages 79 and 80 and the disclosure note
on page 89.

The inventory cost includes all direct costs and
an appropriate allocation of fixed and variable
overheads based upon estimated standard
production levels. The costs to be absorbed and
the estimated level of productivity are subjective
areas and there is a risk that the valuation has not
been calculated on a reasonable and consistent
basis across the inventory portfolio.

The impairment against inventory is calculated
on a formulaic basis which also considers
management’s assessment of each unit’s sales
values in the future. This involves a degree of
judgement, which results in a fraud risk. Therefore,
there is a risk that the inventory provision is
materially misstated and that inventory is not
being held at the appropriate value.

As a result, we consider inventory valuation as a
key audit matter.

With regards to the inventory costing:

•

Assessed the appropriateness of the absorption rate methodology utilised by
management.

Verified that the costs included in the absorption calculation are appropriate to
absorb into inventory in accordance with IAS 2.

Assessed the reasonableness of the standard costs and scrutinised any changes
made to the standard costs.

Reconciled managements’ calculation through to supporting documentation.

Test of detail over the fixed and variable overhead absorption rates.

We challenged management about the inclusion of inefficiencies in inventory
valuation and performed independent analysis to determine whether there was
evidence of absorption of inefficiencies into inventory costing,

•

Tested on a sample basis that stock items are valued in accordance with the
overhead absorption rates calculated.

With regards to the inventory provision:

•

Challenged the Group stock provision policy to ensure it is appropriate based on our
knowledge of the Group’s products and current macro-economic factors.

Assessed for consistency in the provisioning methodology used throughout the
group compared to the prior year.

Recalculated managements’ inventory provision.

Assessed the completeness and accuracy of the data used by management in
computing the provision and verifying the source data.

Assessed the mathematical accuracy and logic of the models underpinning the provision.

Tested the accuracy of the process used by management to identify potentially
impaired inventory across a representative sample of individual product lines.

Assessed the completeness and accuracy of disclosures within the financial
statements in accordance with IFRS.

Our observations

Based on the work performed, the level of provisioning adopted was considered
reasonable. Internal control recommendations made in this area have been
communicated to the Audit Committee

Annual Report and Accounts 2023 • Portmeirion Group PLC 63

Corporate GovernanceIndependent Auditor’s Report continued
to the members of Portmeirion Group PLC

Key Audit Matter

How our scope addressed this matter

Impairment of goodwill and intangible assets

Our audit procedures included but were not limited to;

The Group’s accounting policy for goodwill and
intangible assets is set out in the accounting policy
notes on pages 78 to 80 and in the disclosure note
on pages 85 to 86.

There is a risk that certain assets held on the
Balance Sheet may be impaired, including goodwill
and other intangible assets.

Management is required to perform an annual
impairment review in respect of goodwill to
conclude on whether an adjustment to the
carrying value of any potential impaired assets is
required. Management estimation is required in
determining value in use.

The risk is focussed around the Home Fragrance
Cash Generating Unit (CGU) due to this CGU
reporting a loss. The CGU included a goodwill
balance of £7.7m and other assets of £6.1m prior
to impairment.

An impairment charge of £10.9m has been
made against the CGU in the year, impairing the
goodwill to nil.

We obtained copies of the impairment review calculations and conclusions prepared by
management and undertook the following procedures:

•

Assessed the appropriateness of the key underlying assumptions such as growth rate
and discount rate.

Agreed cashflow and profit forecasts to the latest budgets approved by the Board
and challenged management on the assumptions used in these budgets.

Challenged the accuracy of prior budgets, including retrospective review, and the
rationale and support for any deviations in budget to outturn.

Re-calculated the mechanical accuracy of the calculations performed.

Critically assessed management’s assessment by seeking supporting and
disconfirming evidence.

Utilised internal valuation experts who support the audit team to assess the
assumptions used by management and performed sensitivity analysis on
management’s impairment review.

•

Challenged the appropriateness of disclosures regarding impairment within the
financial statements.

Our observations

The results of our testing were satisfactory, with no matters or findings reported to the
audit committee.

Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and on the financial
statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Materiality

Overall materiality

How we determined it &
rationale for the benchmark

Group; £1,284,000
Parent; £290,000

Group: 1.25% of revenue

Parent: Capped from allocation from Group materiality.

We believe that revenue is an appropriate benchmark and is utilised as a KPI by management to monitor
the success of the business. Revenue is a common benchmark to be used for materiality calculations
across the manufacturing/ retail sector.

For the parent Company, this is set from a benchmark of net assets as it does not trade.

Performance materiality

Performance materiality is set to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements in the financial statements exceeds materiality for the financial
statements as a whole.

For Portmeirion Group PLC this was taken as 65% of overall materiality to provide a figure of £834,000 for
the Group. We are satisfied 65% is appropriate due to a historic low rate of errors.

For the parent this was taken at 80% of overall materiality to provide a figure of £232,000. We are
satisfied 80% is appropriate due to a historic low rate of errors as well as low volumes of transactions
given the entity does not trade.

Reporting threshold

We agreed with the directors that we would report to them misstatements identified during our audit
above £38,500 for the Group and £8,700 for the parent as well as misstatements below that amount that,
in our view, warranted reporting for qualitative reasons.

These figures represent 3% of overall materiality.

For each component in the scope of the Group audit, we allocated a materiality that was less than our overall Group materiality. The range of
performance materiality allocated across the components was between £761,000 and £186,000.

As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due to fraud or error, and
then designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors made subjective

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate Governancejudgements, such as assumptions on
significant accounting estimates.

We tailored the scope of our audit to ensure
that we performed sufficient work to be able
to give an opinion on the financial statements
as a whole. We used the outputs of our risk
assessment, our understanding of the Group
and the parent Company, their environment,
controls, and critical business processes, to
consider qualitative factors to ensure that
we obtained sufficient coverage across all
financial statement line items.

Based on our risk assessment, our group
audit scope included a full scope audit of the
following components: Portmeirion Group
PLC, Portmeirion Group UK Limited, Wax
Lyrical Limited and Portmeirion Group USA,
Inc. Analytical procedures were performed on
the residual components of the Group using
an allocation of Group materiality.

We also tested the consolidation process
and carried out analytical procedures to
confirm our conclusion that there were no
significant risks of material misstatement of
the aggregated financial information.

Other information
The other information comprises the
information included in the annual report
and accounts other than the financial
statements and our auditor’s report
thereon. The directors are responsible for
the other information. Our opinion on the
financial statements does not cover the
other information and, except to the extent
otherwise explicitly stated in our report,
we do not express any form of assurance
conclusion thereon.

Our responsibility is to read the other
information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the course
of audit or otherwise appears to be
materially misstated. If we identify such
material inconsistencies or apparent
material misstatements, we are required
to determine whether this gives rise to
a material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude that
there is a material misstatement of this
other information, we are required to report
that fact.

We have nothing to report in this regard.

Opinions on other matters
prescribed by the Companies
Act 2006
In our opinion, based on the work undertaken
in the course of the audit:

•

the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and

•

the strategic report and the directors’
report have been prepared in accordance
with applicable legal requirements.

Matters on which we are required
to report by exception
In light of the knowledge and understanding
of the Group and the parent Company and
its environment obtained in the course of
the audit, we have not identified material
misstatements in the strategic report or the
directors’ report.

We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report to
you if, in our opinion:

•

adequate accounting records have not
been kept by the parent Company, or
returns adequate for our audit have
not been received from branches not
visited by us; or

the parent Company financial statements
are not in agreement with the accounting
records and returns; or

certain disclosures of directors’
remuneration specified by law are
not made; or

•

we have not received all the information
and explanations we require for our audit.

Responsibilities of Directors
As explained more fully in the directors’
responsibilities statement set out on page
61, the directors are responsible for the
preparation of the financial statements and
for being satisfied that they give a true and
fair view, and for such internal control as the
directors determine is necessary to enable the
preparation of financial statements that are free
from material misstatement, whether due to
fraud or error.

In preparing the financial statements, the
directors are responsible for assessing the
Group’s and the parent Company’s ability to
continue as a going concern, disclosing, as
applicable, matters related to going concern and
using the going concern basis of accounting
unless the directors either intend to liquidate
the Group or the parent Company or to cease
operations, or have no realistic alternative
but to do so.

Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will
always detect a material misstatement when
it exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of the financial
statements.

The extent to which our procedures are capable
of detecting irregularities, including fraud is
detailed below.

Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We
design procedures in line with our responsibilities,
outlined above, to detect material misstatements
in respect of irregularities, including fraud.

Based on our understanding of the Group
and the parent Company and their industry,
we considered that non-compliance with the
following laws and regulations might have
a material effect on the financial statements:
Bribery Act 2010, Data protection act,
employment regulation, health and safety
regulation, modern slavery act, anti-money
laundering regulation.

To help us identify instances of non-compliance
with these laws and regulations, and in
identifying and assessing the risks of material
misstatement in respect to non-compliance, our
procedures included, but were not limited to:

•

Inquiring of management and, where
appropriate, those charged with governance,
as to whether the Group and the parent
Company is in compliance with laws and
regulations, and discussing their policies and
procedures regarding compliance with laws
and regulations;

Inspecting correspondence, if any, with
relevant licensing or regulatory authorities;

Reviewing minutes of directors’ meetings
in the year;

Communicating identified laws and
regulations to the engagement team and
remaining alert to any indications of non-
compliance throughout our audit; and

Considering the risk of acts by the Group
and the parent Company which were
contrary to applicable laws and regulations,
including fraud.

Annual Report and Accounts 2023 • Portmeirion Group PLC 65

Corporate GovernanceIndependent Auditor’s Report continued
to the members of Portmeirion Group PLC

The risks of material misstatement that had the
greatest effect on our audit are discussed in the
“Key audit matters” section of this report.

A further description of our responsibilities for
the audit of the financial statements is located
on the Financial Reporting Council’s website
at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.

Use of the audit report
This report is made solely to the parent
Company’s members as a body in
accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has
been undertaken so that we might state
to the parent Company’s members those
matters we are required to state to them in
an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we
do not accept or assume responsibility to
anyone other than the parent Company and
the parent Company’s members as a body
for our audit work, for this report, or for the
opinions we have formed.

Charlene Lancaster
(Senior Statutory Auditor)

for and on behalf of Mazars LLP
Chartered Accountants and
Statutory Auditor
The Pinnacle, 160 Midsummer Boulevard
Milton Keynes, MK9 1FF

25 March 2024

We also considered those laws and regulations
that have a direct effect on the preparation of
the financial statements, such as AIM listing
requirements, tax legislation, pension legislation
and the Companies Act 2006.

In addition, we evaluated the directors’ and
management’s incentives and opportunities
for fraudulent manipulation of the financial
statements, including the risk of management
override of controls, and determined that the
principal risks related to posting manual journal
entries to manipulate financial performance,
management bias through judgements and
assumptions in significant accounting estimates,
revenue recognition (as discussed in the key audit
matters section above), significant one-off or
unusual transactions and inventory valuation (as
discussed in the key audit matters section above).

Our audit procedures in relation to fraud included
but were not limited to:

•

Making enquiries of the directors and
management on whether they had
knowledge of any actual, suspected or
alleged fraud;

Gaining an understanding of the internal
controls established to mitigate risks
related to fraud;

Discussing amongst the engagement team
the risks of fraud; and

Addressing the risks of fraud through
management override of controls by
performing journal entry testing.

There are inherent limitations in the audit
procedures described above and the primary
responsibility for the prevention and detection
of irregularities including fraud rests with
management. As with any audit, there remained
a risk of non-detection of irregularities, as
these may involve collusion, forgery, intentional
omissions, misrepresentations or the override of
internal controls.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Corporate GovernanceConsolidated Income Statement
for the year ended 31 December 2023

Revenue

Operating costs before exceptionals

Headline operating profit(1)

Exceptional items

– restructuring costs

– impairment charge

– acquisition costs

Operating (loss)/profit

Interest income

Finance costs

Other income

Headline profit before tax(1)

Exceptional items

– restructuring costs

– impairment charge

– acquisition costs

(Loss)/profit before tax

Tax

(Loss)/profit for the period attributable to equity holders

Earnings per share

Basic

Diluted

Headline earnings per share

Basic

Diluted

Dividends proposed and paid per share

All the above figures relate to continuing operations.

Year to
31 December
2023
£’000

Year to
31 December
2022
£’000

Notes

4,5

102,743

110,820

(97,920)

(102,154)

4,823

8,666

(694)

(958)

(10,867)

—

(76)

(6,738)

7,632

(1,813)

—

(956)

265

3,033

8,004

(694)

(10,867)

—

(8,528)

(958)

—

(76)

6,970

(1,415)

(8,456)

5,555

(61.46)p

(61.41)p

40.39p

40.35p

21.36p

21.34p

46.59p

46.54p

5.50p

15.50p

(1)

Headline operating profit is the statutory operating loss of £6,738,000 (2022: £7,632,000 profit) adding back the exceptional items of £11,561,000

(2022: £1,034,000). Headline loss before tax is the statutory loss before tax of £8,528,000 (2022: £6,970,000 profit) adding back the exceptional items of

£11,561,000 (2022: £1,034,000).

Annual Report and Accounts 2023 • Portmeirion Group PLC 67

Financial Statements

Consolidated Statement of Comprehensive Income
for the year ended 31 December 2023

(Loss)/profit for the year

Items that will not be reclassified subsequently to profit or loss:

Remeasurement of net defined benefit pension scheme liability

Deferred tax relating to items that will not be reclassified subsequently to profit or loss

Items that may be reclassified subsequently to profit or loss:

Exchange differences on translation of foreign operations

Other comprehensive (loss)/income for the year

Total comprehensive (loss)/income for the year attributable to equity holders

Notes

2023
£’000

(8,456)

2022
£’000

5,555

504

(126)

(1,517)

380

(1,400)

(1,022)

(9,478)

2,466

1,329

6,884

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

Consolidated Balance Sheet
31 December 2023

Notes

2023
£’000

2022
£’000

1,749

7,511

9,416

8,581

15,020

16,842

7,325

1,144

5,869

317

32,749

41,025

35,956

19,053

—

888

41,117

19,887

792

1,681

55,897

63,477

88,646

104,502

(13,860)

(16,469)

(161)

(1,972)

(7,825)

—

(1,696)

(8,789)

(23,818)

(26,954)

(3,015)

(5,840)

(983)

(3,230)

(4,654)

(2,981)

(9,838)

(10,865)

(33,656)

(37,819)

54,990

66,683

710

18,344

(3,108)

2,252

36,726

54,990

148

3,652

46,937

66,683

Non-current assets

Goodwill

Intangible assets

Property, plant and equipment

Right-of-use assets

Pension scheme surplus

Total non-current assets

Current assets

Inventories

Trade and other receivables

Current income tax asset

Cash and cash equivalents

Total current assets

Total assets

Current liabilities

Trade and other payables

Current income tax liability

Lease liabilities

Borrowings

Total current liabilities

Non-current liabilities

Deferred tax liability

Lease liabilities

Borrowings

Total non-current liabilities

Total liabilities

Net assets

Equity

Called up share capital

Share premium account

Investment in own shares

Share-based payment reserve

Translation reserve

Retained earnings

Total equity

These financial statements were approved by the Board of Directors and authorised for issue on 25 March 2024.

They were signed on its behalf by:

M.T Raybould

Director

D. Sproston

Director

Annual Report and Accounts 2023 • Portmeirion Group PLC 69

Financial Statements

Company Balance Sheet
31 December 2023

Notes

2023
£’000

2022
£’000

11,601

14,775

14,947

26,376

26,548

—

26,376

26,548

710

18,344

197

(3,108)

148

10,167

10,257

26,376

26,548

Non-current assets

Investment in subsidiaries

Total non-current assets

Current assets

Trade and other receivables

Total current assets

Total assets

Total liabilities

Net assets

Equity

Called up share capital

Share premium account

Other reserves

Investment in own shares

Share-based payment reserve

Retained earnings

Total equity

The Company reported a profit for the financial year ended 31 December 2023 of £2,043,000 (2022: £1,589,000).

The financial statements of Portmeirion Group PLC, company registration number 124842, were approved by the Board of Directors and
authorised for issue on 25 March 2024.

They were signed on its behalf by:

M.T Raybould

Director

D. Sproston

Director

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

Consolidated Statement of Changes in Equity
for the year ended 31 December 2023

At 1 January 2022

Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year

Dividends paid

Increase in share-based payment reserve

Transfer on exercise or lapse of options

Shares issued under employee share
schemes

Deferred tax on share-based payment

At 1 January 2023

Loss for the year

Other comprehensive loss for the year

Total comprehensive loss for the year

Dividends paid

Decrease in share-based payment reserve

At 31 December 2023

Share
capital
£’000

710

Share
premium
account
£’000

18,344

Investment
in own shares
£’000

Share-
based
payment
reserve
£’000

Translation
reserve
£’000

Retained
earnings
£’000

Total
£’000

(3,124)

128

1,186

44,703

61,947

—

(71)

—

2,466

—

5,555

(1,137)

4,418

5,555

1,329

6,884

(2,269)

—

(16)

—

710

18,344

(3,108)

148

3,652

46,937

66,683

—

710

—

18,344

(3,108)

—

(82)

—

(8,456)

(1,400)

378

(8,456)

(1,022)

(1,400)

(8,078)

(9,478)

(2,133)

—

(82)

2,252

36,726

54,990

The nature of each reserve is explained in note 2.15 on page 79.

Annual Report and Accounts 2023 • Portmeirion Group PLC 71

Financial StatementsCompany Statement of Changes in Equity
for the year ended 31 December 2023

Other
reserves
£’000

Investment
in own shares
£’000

Share-
based
payment
reserve
£’000

Retained
earnings
£’000

Total
£’000

197

(3,124)

128

10,882

27,137

—

(71)

—

148

—

(82)

1,589

(2,269)

—

(16)

—

10,257

26,548

2,043

(2,133)

—

(82)

10,167

26,376

At 1 January 2022

Profit for the year

Total comprehensive income for the year

Dividends paid

Increase in share-based payment reserve

Transfer on exercise or lapse of options

Shares issued under employee share
schemes

At 1 January 2023

Profit for the year

Total comprehensive income for the year

Dividends paid

Decrease in share-based payment reserve

Share
capital
£’000

710

—

Share
premium
account
£’000

18,344

—

710

18,344

197

(3,108)

—

At 31 December 2023

710

18,344

197

(3,108)

The nature of each reserve is explained in note 2.15 on page 79.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial StatementsConsolidated Statement of Cash Flows
for the year ended 31 December 2023

Operating (loss)/profit

Adjustments for:

Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Amortisation of intangible assets

(Credit)/charge for share-based payments

Exchange loss

Impairment charge

Loss on sale of tangible fixed assets

Operating cash flows before movements in working capital

Decrease/(increase) in inventories

Decrease in receivables

Decrease in payables

Cash generated from operations

Contributions to defined benefit pension scheme

Interest paid

Income taxes received/(paid)

Net cash inflow/(outflow) from operating activities

Investing activities

Interest received

Purchase of property, plant and equipment

Purchase of intangible assets

Other income

Acquisition of subsidiary

Net cash outflow from investing activities

Financing activities

Equity dividends paid

Lease payments

(Repayment)/drawdown of short term borrowings

Repayments of borrowings

Net cash (outflow)/inflow from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Effect of foreign exchange rate changes

Cash and cash equivalents at end of year

Notes

2023
£’000

2022
£’000

(6,738)

7,632

1,459

2,058

884

(82)

(1,053)

10,867

—

7,395

5,161

834

(2,609)

10,781

(300)

(1,569)

684

9,596

—

(1,340)

(1,585)

—

1,810

1,881

813

(559)

—

251

11,919

(9,869)

239

(643)

1,646

(900)

(686)

(300)

(240)

(4,093)

(1,933)

265

(821)

(2,925)

(6,577)

(2,133)

(2,283)

(964)

(2,269)

(1,864)

6,803

(2,000)

(7,380)

670

(709)

(6,147)

1,681

(84)

888

7,616

212

1,681

Annual Report and Accounts 2023 • Portmeirion Group PLC 73

Financial Statements

Company Statement of Cash Flows
for the year ended 31 December 2023

Operating profit

Adjustments for:

Notes

2023
£’000

2022
£’000

2,043

1,589

(Credit)/charge for share-based payments

(82)

Operating cash flows before movements in working capital

Decrease in receivables

Decrease in payables

Cash generated from operations

Income taxes paid

Net cash inflow from operating activities

Investing activities

Net cash inflow from investing activities

Financing activities

Equity dividends paid

Net cash outflow from financing activities

Net movement in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

1,961

1,680

172

—

624

(35)

2,133

2,269

—

2,269

—

(2,133)

(2,269)

(2,133)

(2,269)

—

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

Notes to the Financial Statements

1. Basis of preparation
Portmeirion Group PLC is a company incorporated in England and Wales. The address of the registered office is given on the back cover.
The nature of the Group’s operations and its principal activities are that of a marketer and distributor of ceramic tableware, home fragrance,
cookware and giftware, glassware, candles, placemats, coasters and other associated products and is engaged in manufacturing ceramics
and home fragrance products. The financial statements have been prepared in accordance with UK-adopted International Accounting
Standards (IFRS) in conformity with the requirements of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis, with the exception of derivative financial instruments which are
stated at their fair value.

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present an income statement.

Going Concern

The financial statements have been prepared on a going concern basis. The Group reported a headline profit before taxation of £3.0 million
(2022: £8.0 million) and a statutory loss before taxation of £8.5 million after non-underlying items for the financial year to 31 December 2023,
although the majority of the non-underlying items was a non-cash impairment charge (2022: profit before taxation of £7.0 million).

At the year end the Group had net debt of £7.9 million (comprising cash and cash equivalents of £0.9 million less borrowings of £8.8 million)
with unutilised bank facilities with available funding of £16.7 million. This was a reduction in net debt of £2.2 million since the prior year end.
Operating cash generation was positive during the year, with cash flow from operations of £10.8 million (2022: £1.6 million) driven by lower
inventory levels.

The Group sells into over 80 countries worldwide and has a spread of customers and sales channels within its major UK and US markets. The
Group manufactures approximately 45% of its products and sources the remainder from a range of third-party suppliers.

There remains ongoing challenges in our sales markets around the world caused by the negative impact of inflationary pressures on consumer
spending, but the Group’s performance continues to remain resilient and we are well diversified with significant funding headroom available.

The Group has also produced a sensitivity analysis to its cash flow forecast based upon possible downside scenarios. We have modelled a
10% sales reduction to assess the potential impact of a significant downturn in trading performance similar to the reduction experienced in
2020 during the Covid-19 pandemic. This demonstrated the Group still has sufficient headroom within borrowing facilities and loan covenants
in light of the overheads reduction measure already undertaken to reduce overheads by 10% (£4 million) over 2023.

We have also considered a reverse stress-tested scenario to try and assess the amount of sales reduction required before the Group begins to
approach maximum facility and covenant headroom. This demonstrated that sales could reduce by approximately 10% before we breached
facility limits or any covenants, assuming no further mitigating cost actions were undertaken. A number of additional cost mitigating actions
are available to the Group and are closely monitored in the event of a sales downturn, and therefore we consider an event where sales reduce
by 10% and no further cost mitigation is undertaken to be implausible. These cost savings include headcount reductions and eliminating non-
essential expenditure – assuming these were undertaken promptly then sales could reduce by 18% before we breached facility limits or any
covenants. As the sales downturn during the Covid pandemic in 2020 was only 11% and external market data on the homeware sector does
not forecast a contraction of this magnitude, we do not consider the likelihood of an 18% sales reduction to be plausible.

Conclusion – Going concern assumption appropriate with a material uncertainty

After making enquiries and reviewing budgets and forecasts for the Group, the Directors have a reasonable expectation that the Company and
the Group have adequate resources to continue in operational existence for the foreseeable future.

The Directors recognise that the current bank facilities, which include both a committed revolving credit facility of £10 million available until
September 2025 and an uncommitted facility element of £12.5 million available until September 2024, are all required under both a base
case and downside scenario in order to provide the Group with sufficient liquidity to continue trading. Under an unlikely but plausible scenario
by September 2024 Lloyds could decline their option to extend the committed revolving credit facility beyond September 2025 and therefore
decide not to renew the uncommitted facilities at the same date. Under this scenario alternative third party funding would need to be secured
in order for the Group to meet liabilities as they fall due and therefore continue as a going concern.

The Group has a positive and long-standing relationship with our lenders however, if the Group could not secure alternative funding by this
date, then the Directors acknowledge that this represents a material uncertainty which may cast significant doubt on the Group’s ability to
continue as a going concern.

The Board considers the likelihood of lenders removing facilities at this date and not being able to secure an alternative source of funding to be
low, and therefore the Directors have a reasonable expectation that the Group has adequate resources to meet its liabilities over a period of at
least twelve months from the date of signing the financial statements. Accordingly, they continue to adopt the going concern basis in preparing
the annual report and accounts.

Other matters

These financial statements are presented in pounds sterling. Foreign operations are included in accordance with the policies set out in note 2.5.

In the current year, the Group has applied a number of amendments that are mandatorily effective for an accounting period beginning on
1 January 2023.

The following new and revised standards and interpretations have also been adopted in the current year but none have had a significant
impact on the amounts reported in these financial statements.

Annual Report and Accounts 2023 • Portmeirion Group PLC 75

Financial StatementsNotes to the Financial Statements continued

1. Basis of preparation continued

Effective date periods beginning
on or after

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality
Judgements: Disclosure of Accounting Policies (Issued February 2021)

1 January 2023

Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Issued May 2021)

1 January 2023

Amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules (Issued May 2023)

1 January 2023

Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates (Issued February 2021)

1 January 2023

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS that have been issued
but are not yet effective and (in some cases) had not yet been adopted:

Effective date periods beginning
on or after

Amendments to IAS 1 Presentation of Financial Statements: - Classification of Liabilities as Current or
Non-current (Issued January 2020) and – Non-current Liabilities with Covenants (Issued October 2022)

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures,
Supplier Finance Arrangements (Issued on May 2023)

1 January 2024

The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the
Group in future periods.

2. Material accounting policies
The accounting policies which follow set out those policies which were applied in preparing the financial statements for the year ended
31 December 2023.

2.1 Basis of consolidation

The consolidated financial statements incorporate the financial statements of Portmeirion Group PLC and its subsidiaries.

Subsidiary undertakings are consolidated on the basis of the acquisition method of accounting where the Group has overall control of that
entity. Intra-group transactions and balances are eliminated fully on consolidation and the consolidated accounts reflect external transactions
only. Subsidiaries’ accounting policies are amended where necessary to ensure consistency with the policies adopted by the Group.

All accounts for subsidiaries have been prepared for the year ended 31 December 2023.

2.2 Investments

Fixed asset investments for the Company in subsidiaries are shown at cost less provision for impairment.

2.3 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services
provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Revenue is recognised when the Group has satisfied its performance obligations to its customers and the customer has obtained control of the
goods and services being transferred. The Group generates revenue through a number of revenue channels, impacting the point in time when
revenue is recognised. Revenue through retail channels is recognised at the point of sale. Revenue through our own e-commerce platforms is
recognised when the customer receives the goods. Revenue through sales to third party retailers is recognised when the customer receives the
goods.

The Group offers a wide range of payment terms to customers, from payment up front to 60 days + from date of dispatch.

2.4 Leases

The Group as a lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an asset, the Group assesses whether:

• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the

time the asset is made available to the Group;

• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,

considering its rights within the defined scope of the contract the Group has the right to direct the use of the identified asset throughout the
period of use; and

• the Group has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements2. Material accounting policies continued

2.4 Leases continued

Measurement and recognition of leases as a lessee
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease
incentives received, and any initial direct costs incurred.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is
over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease
payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase
option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments
that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change
in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase
option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to
profit or loss if the carrying amount of the right-of-use asset is fully written down.

2.5 Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it
operates (its functional currency). The results and financial position of each Group company are expressed in pounds sterling, which is the
functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency (foreign
currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets
and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for
the year.

In order to hedge its exposure to certain foreign exchange risks, the Group enters into forward contracts.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated at
exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period.
Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

2.6 Operating profit

Operating profit is stated before interest income, finance costs, and other income.

2.7 Exceptional items

The Group’s income statement separately identifies exceptional items. Such items are those that in the Director’s judgement are one-off
in nature or non-operating and need to be disclosed separately by virtue of their size or incidence and may include, but are not limited to,
impairment costs, restructuring costs and acquisition-related costs. In determining whether an item should be disclosed separately as an
exceptional item, the Directors consider quantitative as well as qualitative factors such as the frequency, predictability of occurrence and
significance. This is consistent with the way financial performance is measured by management and reported to the Board. Disclosing
exceptional items separately provides additional understanding and transparency of the performance of the Group. The impairment charge to
the Home Fragrance division of £10,867,000 is considered to be exceptional given its magnitude and the Group’s expectation that it is one-off
in nature. The nature of the impairment is described further in note 14.

2.8 Group pension schemes

Payments to defined contribution retirement schemes are charged as an expense in the period to which they relate.

For defined benefit schemes, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being
carried out at least triennially and updated at each balance sheet date. Actuarial gains and losses are recognised in full in the period in which
they occur. They are recognised outside profit or loss and presented in other comprehensive income.

Past service costs are recognised in profit or loss when the plan amendment or curtailment occurs, or when the Group recognises related
restructuring costs or termination benefits, if earlier. The retirement benefit obligation recognised in the balance sheet represents the deficit
or surplus in the Group’s defined benefit pension scheme. Any surplus resulting from this fluctuation is limited to the present value of any
economic benefits available in the form of refunds from the schemes or reductions in future contributions to the scheme.

Annual Report and Accounts 2023 • Portmeirion Group PLC 77

Financial StatementsNotes to the Financial Statements continued

2. Material accounting policies continued

2.9 Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never
taxable or deductible. It also includes tax relief for contributions that are not expenses. The Group’s liability for current tax is calculated using
tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able
to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based
on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities
on a net basis.

2.10 Property, plant and equipment

Freehold and leasehold land is not depreciated. Property, plant and equipment are held at cost less accumulated depreciation and any
recognised impairment losses.

Depreciation is recognised so as to write off the cost of assets (other than land) less their residual values over their useful lives, using the
straight-line or the reducing balance method, on the following bases:

Freehold and leasehold buildings

Leasehold improvements

Plant and vehicles

2.11 Intangible assets

–

2% per annum

6% to 30% per annum

5% to 33% per annum

Purchases of intellectual property and customer lists are included at cost and written off in equal annual instalments over their estimated
useful economic life of between ten and twenty years. Provision is made for any impairment.

Computer software is held at cost less accumulated amortisation less any recognised impairment losses. Amortisation is charged so as to
write off the cost of assets less their residual value over their useful lives, using the straight-line method. The estimated useful life of computer
software is between three and twenty years.

2.12 Impairment of tangible assets, intangible assets and goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the
asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is
recognised as income immediately.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements2. Material accounting policies continued

2.12 Impairment of tangible assets, intangible assets and goodwill continued

Goodwill is not amortised but is reviewed for impairment at least annually. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of
the cash-generating unit is less than the carrying value of the unit, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset of the unit.
An impairment loss recognised for goodwill is not reversed in a subsequent period.

2.13 Business combinations and goodwill

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, and any previous interest held, over the net
identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred,
the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used
to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill
acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with
the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in
these circumstances is remeasured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

2.14 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs
and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the
weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be
incurred in marketing, selling and distribution.

2.15 Equity

Ordinary shares are classified as equity. The excess of the nominal value of ordinary shares received upon the issue of a new share is classified
as share premium.

Investment in own shares has been classified as a deduction from equity. These shares are valued at the weighted average cost of purchase
and comprise treasury shares and shares held by an employee benefit trust. The employee benefit trust is controlled by the Company and
Group and as such is consolidated into the reported figures.

The share-based payment reserve represents the cumulative charge on outstanding share options. Once the options have been exercised or
lapsed, this reserve is transferred into retained earnings.

The translation reserve represents the aggregate of the cumulative exchange differences arising from the retranslation of the balance sheets of
non-sterling denominated subsidiary undertakings.

Retained earnings are the cumulative profits recognised by the Group and the Company.

The Company other reserve is a merger reserve arising on the purchase of subsidiary undertakings.

2.16 Financial instruments

Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual
provisions of the instrument.

Receivables
Trade receivables and other receivables are measured at amortised cost, because the payments are solely payments of principal and interest
is held to collect. Impairment is determined by reference to expected credit loss.

Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Group are recognised at the proceeds received, net of direct issue costs.

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

Further details on the Group’s financial instruments can be found in note 32. Financial liabilities measured at amortised cost includes trade
payables, accruals, other payables and borrowings.

Annual Report and Accounts 2023 • Portmeirion Group PLC 79

Financial StatementsNotes to the Financial Statements continued

3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group and Company’s accounting policies, which are described in note 2, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

The following are the key judgements that the Directors have made in the process of applying the Group and Company’s accounting policies
and that have the most significant effect on the amounts recognised in the financial statements.

Indicators of impairment in cash generating units (CGUs)
Judgement must be applied in determining whether cash generating units held show any signs of impairment. Factors considered include:
changes to the weighted average cost of capital, which is used to discount future cash flows from the CGU; changes to the cash flow forecast,
which is derived from adjusted budgeted cash flows.

Impairment would exist where the value in use of the cash generating unit is less than the carrying amount of the fixed assets associated with
that cash generating unit. The outcome of the impairment review is outlined in note 14.

During the year, an impairment was recognised in the Home Fragrance division. The indicator of an impairment was the division’s failure to
return to pre-pandemic levels of profitability.

The following are key sources of estimation uncertainty in applying the Group and Company’s accounting policies:

Impairment of inventory
Inventories are stated at the lower of cost and net realisable value. At the year end, the future sale value of some slow-moving and obsolete
inventory is uncertain, and a provision has been included where management feels this value falls below cost. The level of provision is
determined by management estimates based on historical and forecast sales and potential net realisable value.

The methodology used principally relies on slow moving inventory data, with the amount of provision scaling in line with the period in which
there has been little to no movement for a particular item of inventory. The rate at which the provision increases is tailored to each category
of inventory. Provision is also recognised on a specific basis for items that the Group believes will not achieve a sales value in excess of its
carrying amount.

With a substantial component of the provision being on a specific and isolated basis, it is difficult to estimate the sensitivity of the Group
provision in the event of a sales downturn against expectation. The Group believes it has taken a prudent approach in determining the
provision, taking into account a realistic forecast for sales volumes in the next financial year.

At the year end, the Group held an inventory provision of £1,147,000 (2022: £1,897,000). There are no reasonable or possible changes in
assumptions that would significantly impact the provision. There is no provision against discontinued items.

Defined benefit pension scheme
The valuation of the Group’s defined benefit pension scheme assets and liabilities under IAS 19 ‘Employee Benefits’ is disclosed in note
31. IAS 19 required a net asset or liability to be recognised in the Group balance sheet based upon relevant actuarial assumptions at each
balance sheet date. The significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected
inflation assumptions and life expectancy. Management receives independent advice from an actuary in the preparation of these assumptions.
The group recognises an asset based on surplus funds being available for distribution in line with the Trust Deed and Scheme rules.

Tangible assets, intangible assets and goodwill
The Group holds a number of tangibles assets, intangible assets and goodwill that have been acquired in business combinations. These assets
are held at cost (which on initial recognition would in all cases be expected to be fair value) less amortisation and any impairment. At each
balance sheet date management estimates the value in use of these assets to ensure that it exceeds the carrying value of the cash generating
unit. The value in use is the sum of the estimated future discounted cash flows associated with the cash generating unit. Impairment reviews
were carried out for both the North America CGU and the Home Fragrance CGU during the year. Details of the key assumptions and inputs of
the value in use estimate are described in note 14.

4. Revenue
An analysis of the Group’s revenue is as follows:

Continuing operations

Sale of goods

Royalties

Annual Report and Accounts 2023 • Portmeirion Group PLC

2023
£’000

2022
£’000

102,477

110,598

266

222

102,743

110,820

Financial Statements
5. Segmental analysis
IFRS 8 requires operating segments to be identified on the basis of internal reports about the components of the Group that are regularly
reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. Based upon the nature and extent of
these internal reports, the Directors are of the opinion that there are two reportable segments under IFRS 8, namely UK and North America.
The Home Fragrance division is a component of the UK segment. The Directors are of the opinion that only one class of business is being
undertaken, that of the manufacture and sale of ceramics, home fragrances and associated homeware.

Revenue by origin

North America

Total
sales
£’000

65,107

42,667

107,774

2023

Inter-
segment
sales
£’000

(5,031)

—

Sales to
third
parties
£’000

60,076

42,667

Total
sales
£’000

63,997

51,067

2022

Inter-
segment
sales
£’000

(4,244)

—

Sales to
third
parties
£’000

59,753

51,067

(5,031)

102,743

115,064

(4,244)

110,820

Inter-segment sales are charged at prevailing market prices.

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

Revenue by destination

United Kingdom

North America1

South Korea

Rest of the World

2023
£’000

30,782

42,407

21,488

8,066

2022
£’000

28,255

48,944

26,656

6,965

102,743

110,820

The accounting policies of the reportable segments are the same as the Group’s accounting policies as described in note 2. Segment profit represents
the profit earned by each segment without allocation of interest income, finance costs and income tax expense. This is the measure reported to the
Group’s Chief Executive for the purpose of resource allocation and assessment of segment performance.

For the purposes of monitoring segment performance and allocating resources between segments the Group’s Chief Executive monitors the tangible,
intangible and financial assets attributable to each segment. All assets are allocated to reportable segments with the exception of interests in
associates. Assets used jointly by reportable segments are allocated on the basis of contribution earned by individual reportable segments.

Operating profit by origin

North America

Headline operating profit

Unallocated items:

Exceptional items

Profit on sale of associated undertaking

Interest income

Finance costs

(Loss)/profit before tax

Tax

(Loss)/profit after tax

2023
£’000

2,282

2,541

4,823

2022
£’000

6,498

2,168

8,666

(11,561)

(1,034)

—

(1,813)

(8,528)

(8,456)

265

(956)

6,970

(1,415)

5,555

(1) In the current year and comparative figures, we have reclassified United States as North America. The revenue of non-US North American countries is now

recognised under North America rather than Rest of the World.

Annual Report and Accounts 2023 • Portmeirion Group PLC 81

Financial Statements

Notes to the Financial Statements continued

5. Segmental analysis continued

Other information

Capital additions

Depreciation and amortisation

Balance sheet:

Assets

Non-current segment assets

Other segment assets

Consolidated total assets

Liabilities

UK
£’000

1,694

2,517

2023
North America
£’000

1,231

1,884

Consolidated
£’000

2,925

4,401

UK
£’000

5,488

2,726

2022

North America
£’000

Consolidated
£’000

2,311

1,778

7,799

4,504

19,736

32,949

52,685

13,013

22,948

35,961

32,749

55,897

88,646

31,116

36,655

67,771

9,909

26,822

36,731

41,025

63,477

104,502

Consolidated total liabilities

23,574

10,082

33,656

30,557

7,262

37,819

Reconciliation of headline earnings before interest, tax, depreciation and amortisation
(Headline EBITDA)

Headline operating profit

Add back:

Depreciation

Amortisation

Headline earnings before interest, tax, depreciation and amortisation

Reconciliation of statutory earnings before interest, tax, depreciation and amortisation (EBITDA)

Statutory operating (loss)/profit

Add back:

Depreciation

Amortisation

Impairment charge

Statutory earnings before interest, tax, depreciation and amortisation

6. Operating costs

Cost of inventories recognised as an expense

Movement on inventory impairment provision

Other external charges

Staff costs (note 7)

Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Amortisation of intangible assets

Impairment of trade receivables

Cost of research and development

Net foreign exchange losses/(gains)

Exceptional items by type are as follows:

Restructuring costs

Impairment charge

Acquisition costs

2023
£’000

4,823

3,517

884

9,224

2023
£’000

(6,738)

3,517

884

10,867

8,530

2023
£’000

46,793

(750)

16,745

29,817

1,459

2,058

884

212

679

2022
£’000

8,666

3,691

813

13,170

2022
£’000

7,632

3,691

813

—

12,136

2022
£’000

49,717

(1,424)

16,860

31,742

1,810

1,881

813

169

837

(251)

97,920

102,154

2023
£’000

694

10,867

—

11,561

2022
£’000

958

—

1,034

Restructuring costs relate to a redundancy exercise undertaken within the Group. Acquisition costs relate to the acquisition of the trade and assets of
AromaWorks. Impairment costs relate to the impairment of the Home Fragrance division. All of these costs are exceptional in nature and non-recurring.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

7. Staff numbers and costs

The average number of persons employed during the year, including Directors:

Operatives

Support staff

2023
Number

2022
Number

450

352

802

512

356

868

2022
£’000

27,039

2,398

1,319

30,756

986

31,742

2022
£’000

1,818

117

1,983

The Company had no employees in the current or preceding years. All employee costs are paid for by Group companies.

Staff costs

Wages and salaries

Social security costs

Other pension costs

Non-monetary benefits

Directors’ emoluments:

Salary and fees, taxable benefits and incentive

Long-term incentive plan

Pension contributions

2023
£’000

25,099

2,296

1,398

28,793

1,024

29,817

2023
£’000

1,434

—

102

1,536

The Directors’ emoluments disclosed above reflect emoluments received by the Directors for the period in 2023 during which they were a
Director of the company.

There were no gains made on the exercise of share options in 2023 (2022: £nil).

Number of Directors who were members of a defined contribution pension scheme during the year

Number of Directors who exercised options over shares in the ultimate parent company

Remuneration of the highest paid Director:

Salary and fees, taxable benefits and incentive

Long-term incentive plan

Pension contributions

8. Auditors’ remuneration

Fees payable to the Group’s auditors for the audit of the Group’s annual accounts

The audit of the Company’s subsidiaries

Total audit related fees

The audit fee for the Company was £3,000 (2022: £3,000).

2023
Number

2022
Number

—

2023
£’000

418

—

462

2023
£’000

195

243

2022
£’000

444

517

2022
£’000

185

230

Fees payable to Mazars LLP and their associates for non-audit services to the Company are £nil (2022: £nil). There were no non-audit services
provided on a consolidated basis in 2023 (2022: £nil).

Annual Report and Accounts 2023 • Portmeirion Group PLC 83

Financial Statements

Notes to the Financial Statements continued

9. Interest income

Bank deposits

Net interest income on pension scheme asset (note 31)

Interest income relates to amounts received on financial assets and classified as cash and cash equivalents.

10. Finance costs

Interest expense

Interest on lease liabilities

Interest expense is recognised on a payable/effective interest rate basis.

11. Taxation on profit on ordinary activities

Current taxation

United Kingdom corporation tax rate at 23.5% (2022: 19%)

Overseas taxation

Deferred taxation

Origination and reversal of temporary differences

Pension scheme

Tax (credit)/charge to income statement

2023
£’000

—

2023
£’000

1,568

245

1,813

2023
£’000

109

160

269

(422)

(341)

(72)

2022
£’000

686

270

956

2022
£’000

175

286

461

723

231

954

1,415

United Kingdom corporation tax is calculated at 23.5% (2022: 19%) of the estimated assessable profit for the year. Taxation for other
jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The actual tax charge for the current and the previous year differs from the standard rate for the reasons set out in the following reconciliation:

(Loss)/profit on ordinary activities before taxation

Tax on (loss)/profit on ordinary activities at standard rate of 23.5% (2022: 19%)

Factors affecting charge for the year:

Net effect of expenses not deductible and other adjustments

Non-deductible impairment charge

Foreign tax charged at higher rates than UK standard rate

Adjustments in respect of prior periods

Deferred tax rate change

Total tax on (loss)/profit on ordinary activities

Future tax charges will be impacted by any tax rate changes.

2023
£’000

(8,528)

(2,004)

(868)

2,554

232

—

(72)

2022
£’000

6,970

1,324

(56)

—

114

(206)

239

1,415

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

12. Dividends paid

Final dividend of 12.00p per share paid in respect of the year ended 31 December 2022
(2022: final dividend of 13.00p per share paid in respect of the year ended 31 December 2021)

Interim dividend of 3.50p per share paid in respect of the year ended 31 December 2023
(2022: interim dividend of 3.50p per share paid in respect of the year ended 31 December 2022)

Total dividends paid in the year

2023
£’000

1,651

2022
£’000

1,788

482

481

2,133

2,269

The Directors recommend that a final dividend for 2023 of 2.00p (2022: 12.00p) per ordinary share be paid. The final dividend will be paid, subject
to shareholder approval, on 31 May 2024, to shareholders on the register at the close of business on 26 April 2024. This dividend has not been
included as a liability in these financial statements. The total dividend paid and proposed for the year is 5.50p per share (2022: 15.50p).

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

Basic earnings per share

Effect of dilutive securities:

– employee share options

Diluted earnings per share

2023
Weighted
average
number
of shares

Earnings
£’000

(8,456)

13,759,282

Earnings
per share
(p)

(61.46)

2022

Weighted
average
number
of shares

Earnings
£’000

5,555

13,753,233

—

10,566

—

14,773

(8,456)

13,769,848

(61.41)

5,555

13,768,006

Earnings
per share
(p)

40.39

—

40.35

The calculation of basic and diluted headline earnings per share adjusted for exceptional items and associated tax benefits is based on the
following data:

Basic earnings per share

Effect of dilutive securities:

– employee share options

Diluted earnings per share

2023
Weighted
average
number
of shares

Earnings
£’000

2,939

13,759,282

Earnings
per share
(p)

21.36

2022

Weighted
average
number
of shares

Earnings
£’000

6,407

13,753,233

—

10,566

2,939

13,769,848

—

21.34

—

14,773

6,407

13,768,006

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

(Loss)/profit for the year attributable to equity holders

Add back/(deduct):

Exceptional items

Tax effect of exceptional items

Headline earnings

14. Goodwill

Cost at 1 January 2022

Additions

Cost at 31 December 2022

Impairment

Net book value at 31 December 2023

2023
£’000

(8,456)

11,561

(166)

2,939

Earnings
per share
(p)

46.59

—

46.54

2022
£’000

5,555

1,034

(182)

6,407

Total
£’000

8,978

438

9,416

(7,667)

1,749

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units, or group of units that are expected to benefit
from that business combination.

The Group tests annually for impairment, or more frequently if there are indications that goodwill might be impaired. Goodwill has been tested for
impairment during the year.

Annual Report and Accounts 2023 • Portmeirion Group PLC 85

Financial StatementsNotes to the Financial Statements continued

14. Goodwill continued
Goodwill includes £nil (2022: £7,667,000) relating to Wax Lyrical and AromaWorks and £1,749,000 (2022: £1,749,000) relating to the
Portmeirion North American division.

The recoverable amounts of the cash-generating units are determined from value in use calculations. The assumptions for the value in use
calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the year.
Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks
specific to the cash-generating unit (CGU). Future growth rates and expected changes to selling prices and direct costs are estimated based upon
historical and anticipated trading performance.

The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management and projects these cash
flows by 5 years and then into perpetuity at a growth rate that is appropriate for the CGU, and does not exceed the long-term growth rate of the
relevant markets. The cash flows are discounted using the post-tax WACC, which is calculated for each CGU.

The Group assessed both CGUs to which goodwill is allocated for impairment. These are the North American division and the Home Fragrance
division. For the North American division, a value in use was calculated using a post-tax WACC of 11.1% and a pre-tax rate of 14.7%. The value
in use calculated provided significant headroom over the carrying amount of the associated assets, which remained significant in the event of a
10% net cash flow shortfall. The WACC and growth rate are not deemed to be key assumptions as a similar sensitivity variance would not result
in a significant impact to the value in use.

Following an impairment review of the Home Fragrance division (consisting of Wax Lyrical and AromaWorks), it was found that the carrying
amount of the associated goodwill and other fixed assets exceeded the value in use of the division. The indication of an impairment was the
division’s failure to return to pre-pandemic levels of profitability. As a result, an impairment charge has been recognised against these associated
fixed assets. The post-tax WACC used to discount the forecast cash flows is 17.5%. The pre-tax WACC is 24.2%.

The reportable segment to which the Home Fragrance division belongs is the UK segment.

The Directors performed sensitivity analysis on the estimated value in use by assuming a net cash flow shortfall of 10%. Such a scenario would
result in a decline of value in use by £244,000. The WACC and growth rate are not deemed to be key assumptions as a similar sensitivity variance
would not result in a significant impact to the value in use.

15. Intangible assets

Cost

At 1 January 2022

Additions

Disposals

Acquired on acquisition

Exchange rate adjustments

At 1 January 2023

Additions

Exchange rate adjustments

At 31 December 2023

Amortisation

At 1 January 2022

Charge for the year

Disposals

Exchange rate adjustments

At 1 January 2023

Charge for the year

Impairment

Exchange rate adjustments

At 31 December 2023

Net book value

At 31 December 2023

At 31 December 2022

Annual Report and Accounts 2023 • Portmeirion Group PLC

Computer
software
£’000

Customer
lists
£’000

Intellectual
property
£’000

Total
£’000

2,070

8,734

13,279

2,475

1,933

(563)

—

3,858

1,585

(57)

5,386

1,169

346

(333)

1,183

386

(2)

—

2,070

—

2,070

1,173

207

—

1,380

207

274

—

1,646

1,861

3,740

2,675

209

690

—

309

270

9,313

—

(137)

9,176

3,811

260

—

4,097

291

1,239

(13)

5,614

3,562

5,216

1,933

(563)

309

283

15,241

1,585

(194)

16,632

6,153

813

(333)

6,660

884

1,592

(15)

9,121

7,511

8,581

Financial Statements15. Intangible assets continued
Included within intellectual property are the rights to certain intellectual property and the trade names of Spode and Royal Worcester
(purchased in April 2009), the intellectual property recognised at fair value on the acquisition of Wax Lyrical (purchased in May 2016), the
intellectual property of Nambé (purchased July 2019) and the AromaWorks trademark (purchased August 2022).

Customer lists includes the amounts recognised at fair value on the acquisition of Wax Lyrical (purchased in May 2016).

At the year end the Spode and Royal Worcester intellectual property had a carrying value of £564,000 (2022: £564,000). There is no
amortisation as the trade name has been classified as having an indefinite life.

At the year end the Wax Lyrical intellectual property had a carrying value of £824,000 (2022: £2,165,000) and the customer lists had a
carrying value of £209,000 (2022: £690,000). The remaining amortisation periods are seven years four months and two years four months
respectively.

At the year end the Nambé intellectual property had a carrying value of £2,054,000 (2022: £2,178,000). There is no amortisation as the trade
name has been classified as having an indefinite life. The movement relates to year end exchange rate translation. Nambé is part of the North
America CGU and the Group has conducted an impairment review annually to confirm this indefinite life intangible asset does not require
impairment.

At the year end the AromaWorks intellectual property had a carrying value of £120,000 (2022: £309,000). The remaining amortisation period
is nine years.

An impairment charge was recognised against the Home Fragrance division. This is explained further in note 14.

16. Property, plant and equipment

Cost

At 1 January 2022

Additions

Disposals

Exchange rate adjustments

At 1 January 2023

Additions

Disposals

Exchange rate adjustments

At 31 December 2023

Depreciation

At 1 January 2022

Charge for the year

On disposals

Exchange rate adjustments

At 1 January 2023

Charge for the year

Impairment

On disposals

Exchange rate adjustments

At 31 December 2023

Net book value

At 31 December 2023

At 31 December 2022

Land and buildings

Freehold
£’000

Long leasehold
£’000

Leasehold
improvements
£’000

Plant and
vehicles
£’000

4,314

3,874

3,299

—

284

—

151

4,340

3,874

3,734

—

(7)

—

(82)

22,156

3,809

(672)

290

25,583

1,265

(203)

(147)

Total
£’000

33,643

4,093

(672)

467

37,531

1,340

(203)

(236)

4,335

3,874

3,725

26,498

38,432

2,386

147

—

2,545

132

—

(1)

429

—

477

—

1,287

207

—

1,590

234

479

—

(50)

15,143

1,408

(651)

177

16,077

1,042

1,129

(203)

(90)

19,245

1,810

(651)

285

20,689

1,459

1,608

(203)

(141)

2,676

528

2,253

17,955

23,412

1,659

1,795

3,346

3,397

1,472

2,144

8,543

9,506

15,020

16,842

The Long Leasehold property has a peppercorn rent where the lease premium was paid in total on completion of the purchase. At 31 December
2023, there are 132 years remaining on the lease. At 31 December 2023, the Group had entered into contractual commitments for the acquisition
of property, plant and equipment amounting to £407,000 (2022: £915,000).

An impairment charge was recognised against the Home Fragrance division. This is explained further in note 14.

Annual Report and Accounts 2023 • Portmeirion Group PLC 87

Financial Statements

Notes to the Financial Statements continued

17. Right-of-use assets

Cost

At 1 January 2022

Additions

Disposals

Exchange rate adjustments

At 1 January 2023

Additions

Remeasurement of leases

Disposals

Exchange rate adjustments

At 31 December 2023

Depreciation

At 1 January 2022

Charge for the year

Disposals

Exchange rate adjustments

At 1 January 2023

Charge for the year

Disposals

Exchange rate adjustments

At 31 December 2023

Net book value

At 31 December 2023

At 31 December 2022

Land &
buildings
£’000

10,250

1,151

(1,840)

608

10,169

208

3,248

(171)

(390)

13,064

4,169

1,697

(1,514)

398

4,750

1,807

(171)

(153)

6,233

6,831

5,419

Other
£’000

604

313

(85)

838

267

—

(170)

(2)

933

276

184

(75)

388

251

(166)

(34)

439

494

450

Total
£’000

10,854

1,464

(1,925)

614

11,007

475

3,248

(341)

(392)

13,997

4,445

1,881

(1,589)

401

5,138

2,058

(337)

(187)

6,672

7,325

5,869

The Group leases land and buildings for its offices, warehouses and retail outlets under agreements of between five to one hundred years with,
in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated. The Group
also leases plant and equipment under agreements of between three to seven years.

18. Investment in subsidiaries
Company investment in subsidiary undertakings:

30,100 ordinary shares of £1 each in Portmeirion Group UK Limited representing 100% of the issued share
capital at cost

Capital contributions made to subsidiary undertakings:

Portmeirion Group UK Limited

No interest is charged on these capital contributions.

2023
£’000

1,455

2022
£’000

1,455

10,146

11,601

10,146

11,601

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

18. Investment in subsidiaries continued
At 31 December 2023 the Company had the following subsidiary undertakings:

Country of operation
and incorporation

Legal/registered address

Nature of business

Subsidiary undertakings

Portmeirion Group UK Limited

England and Wales

London Road, Stoke-on-Trent ST4 7QQ

Portmeirion Group USA, Inc.(1)

USA

Portmeirion Group Designs, LLC(2)

USA

Nambé LLC.(2)

USA

105 Progress Lane, Waterbury,
Connecticut, USA 06705

Ceramic manufacturer, marketing and
distribution of homeware

Marketing and distribution of
homeware

Online marketing and distribution of
homeware

810 Calle Mejia Ste 103 Santa Fe, NM,
87501-1581

Design, marketing and distribution of
homeware

Portmeirion Group Hong Kong
Limited(1)

Hong Kong

Unit B, 17/F, United Centre, 95
Queensway, Admiralty, Hong Kong

Intermediate holding company

Portmeirion (Shenzhen) Trading
Company Limited(3)

China

Wax Lyrical Limited(1)

England and Wales

Room A807, Block A, Lianhe Plaza, Futian
District, Shenzhen, People’s Republic of
China

Marketing and distribution of
homeware

Lindal-in-Furness, Ulverston, Cumbria
LA12 0LD

Manufacture, marketing and
distribution of home fragrances

Colony Deutschland GmbH(4)

Germany

Karlsplatz 3, 80335 München, Germany Marketing and distribution of

homeware

Portmeirion Canada Inc.(1)

Canada

20 Voyager Court South, Rexdale,
Etobicoke, Toronto, Ontario, Canada

Marketing and distribution of
homeware

The companies are incorporated in England and Wales and registered in England and Wales except where stated. The share capital of all
subsidiary undertakings consists solely of ordinary shares. The Company holds 100% of the share capital of all subsidiaries.

At 31 December 2023 the Group had the following branches:

Branch office

Country of operation

Legal/registered address

Nature of business

Portmeirion Group UK Limited,
Korea Liaison Office

Portmeirion Group UK Limited
(DMCC Branch)

South Korea

Dubai

8F VPLEX, 501 Teheran-ro, Gangnam-gu,
Seoul, South Korea, 06168

Branch liaison office for marketing
and employment

Unit No: 1203, DMCC Business Centre,
Level No 1, Jewellery & Gemplex 3, Dubai,
United Arab Emirates

Branch liaison office for marketing
and employment

Notes:

(1) Wholly owned by Portmeirion Group UK Limited.

(2) Wholly owned by Portmeirion Group USA, Inc.

(3) Wholly owned by Portmeirion Group Hong Kong Limited.

(4) Wholly owned by Wax Lyrical Limited.

19. Inventories

Group

Raw materials and other consumables

Work in progress

Finished goods

2023
£’000

5,221

937

29,798

35,956

2022
£’000

4,369

1,021

35,727

41,117

Annual Report and Accounts 2023 • Portmeirion Group PLC 89

Financial Statements
Notes to the Financial Statements continued

20. Trade and other receivables

Group

Amounts receivable for the sale of goods

Allowance for expected credit loss provision

Trade receivables

Other receivables

Prepayments and accrued income

2023
£’000

17,095

(259)

16,836

201

2,016

19,053

2022
£’000

17,290

(212)

17,078

163

2,646

19,887

Generally no interest is charged on receivables; however, there is provision in the Group’s terms and conditions for interest to be charged
on late payments. The allowance for doubtful debts has been determined by reference to past default experience and a review of specific
customers’ debts at the year end. During the year no interest was charged on trade receivables.

Included in the Group’s trade receivable balance are receivables with a carrying amount of £1,947,000 (2022: £1,263,000) which are past
due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts
are still considered recoverable. The Group does not hold any collateral over these balances. The average age of these receivables is 66 days
(2022: 57 days).

In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade receivable from the
date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and
unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for expected credit loss
provision.

Movement in the allowance for doubtful debts

Balance at the beginning of the year

Impairment losses recognised

Amounts written off as uncollectable

Balance at the end of the year

Company

Amounts owed by subsidiary undertakings

2023
£’000

212

(165)

259

2022
£’000

292

169

(249)

212

2023
£’000

14,775

2022
£’000

14,947

The Directors consider that the carrying amount of trade and other receivables for the Group and the Company approximates to their fair value.

Amounts owed by subsidiary undertakings are deemed to be recoverable in full because the subsidiary has sufficient liquid resources. An
assessment based on the expected credit loss basis has been performed and no impairment loss provision has been recognised. There is no due
date and the amount is repayable on demand.

21. Cash and cash equivalents

Group

Cash and cash equivalents

2023
£’000

888

2022
£’000

1,681

Cash and cash equivalents comprise cash held by the Group including overdrafts and short-term bank deposits with an original maturity of
three months or less. The carrying amount of these assets approximates to their fair value.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements
22. Trade and other payables

Group

Trade payables and accruals

Other taxation and social security

Other payables

2023
£’000

12,092

1,053

715

13,860

2022
£’000

15,131

744

594

16,469

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period
taken for trade purchases is 49 days (2022: 54 days). For most suppliers no interest is charged on the trade payables from the date of invoice
to the end of the following month. Thereafter, interest may be charged on the outstanding balances at various interest rates. The Group’s policy
is to pay all payables within the credit timeframe.

The Directors consider that the carrying amount of trade payables approximates to their fair value.

23. Lease liabilities

Group

Less than 1 month

1 – 3 months

Over 3 months

Total lease liability less than one year

Total lease liability 1 – 5 years

Total lease liability 5 – 10 years

Total lease liability greater than ten years

24. Borrowings
The Group has four facilities:

2023
£’000

171

342

1,459

1,972

5,509

326

7,812

2022
£’000

141

283

1,272

1,696

3,852

473

329

6,350

a) A £5,000,000 overdraft facility available until September 2024. Interest is calculated on the gross borrowing and is payable on amounts

owing in each account at 2.50% per annum, plus bank base rate.

b) A £10,000,000 loan facility repayable in equal quarterly instalments, followed by a final instalment on 12 January 2025. Interest is payable
at an average 1.90% above three-month SONIA. At the year end the outstanding balance was £3,000,000 which net of deferred facility fee
costs of £17,000 left the balance sheet value of £2,983,000.

c) A £10,000,000 revolving credit facility available until February 2025. Interest is payable at 2.60% above three-month SONIA. Subsequent
to the year end Lloyds extended the revolving credit facility agreement to September 2025 with a 1+1 annual renewal extension option (at
their discretion) to extend to September 2026 and then September 2027.

d) A £7,500,000 general export finance facility which is available until September 2024. Interest is calculated on the gross borrowing and is

payable on amounts owing in each account at 2.00% per annum, plus bank base rate.

These facilities are secured by an unlimited debenture from the Group and the Company and a first charge over the Group’s property.

The Group and Company have given a guarantee of up to $900,000 to the landlord of the premises of Portmeirion Group USA, Inc. located in
Connecticut, USA. The fair value of the guarantee is immaterial.

As at 31 December 2023 total borrowings were as follows:

Overdraft

Loan facility

Revolving credit facility

General export finance facility

2023
£’000

—

2,983

3,500

2,325

8,808

2022
£’000

553

4,967

—

6,250

11,770

£983,000 (2022: £2,981,000) of the loan facility is payable in more than one year from the balance sheet date.

Annual Report and Accounts 2023 • Portmeirion Group PLC 91

Financial Statements

Notes to the Financial Statements continued

25. Deferred tax

Group

The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior
reporting years:

At 1 January 2022

(Charge)/credit to income

Credit to equity

Credit to other comprehensive income

Acquired on acquisition of Aromaworks

At 1 January 2023

Credit/(charge) to income

Charge to other comprehensive income

At 31 December 2023

Accelerated
tax
depreciation
£’000

Retirement
benefit
obligations
£’000

Share-
based
payment
£’000

(1,755)

(630)

—

(2,385)

(241)

—

(2,626)

(228)

(231)

—

380

—

(79)

(81)

(126)

(286)

(48)

—

(1)

(4)

—

(5)

Capital
gain
rolled over
£’000

(282)

—

(282)

—

Other
temporary
differences
£’000

Temporary
difference
acquired
intangibles
£’000

Total
£’000

534

(226)

—

308

171

—

(830)

(2,609)

116

—

(77)

(954)

380

(77)

(791)

(3,230)

496

—

341

(126)

(282)

479

(295)

(3,015)

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the
deferred tax balances (after offset) for financial reporting purposes:

Deferred tax liability

Deferred tax asset

2023
£’000

2022
£’000

(3,015)

(3,230)

—

(3,015)

(3,230)

At the balance sheet date, the Group had £119,000 of unused tax trading losses (2022: £nil) available for offset against future profits. This has
been recognised as a deferred tax asset.

26. Share capital

Allotted, called up and fully paid share capital:

– ordinary shares of 5p each

2023

Number
’000

£’000

2022

Number
’000

£’000

14,204

710

14,204

710

The Company has one class of ordinary shares which carry no right to fixed income.

There were no shares issued during the year (2022: none).

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

26. Share capital continued
Equity-settled share options and cash-settled share options granted to Directors and employees (note 33) and still outstanding at
31 December 2023 were as follows:

2012 Approved Plan

2012 Unapproved Plan

2012 Approved Plan

2012 Unapproved Plan

Portmeirion Group Phantom Option Plan

2022 Approved Plan

2022 Unapproved Plan

Portmeirion Group Phantom Option Plan

2018 Deferred Incentive Plan

Number
of shares

66,104

208,396

9,934

218,066

32,500

55,636

267,364

60,000

27,649

13,912

Exercise
price per
share
(p)

632.5

570.0

469.0

—

Dates on which exercisable

Earliest

Latest

26.03.2024

24.03.2031

26.03.2024

24.03.2031

26.04.2025

24.04.2032

26.04.2025

24.04.2032

26.04.2025

24.04.2027

03.05.2026

01.05.2033

03.05.2026

01.05.2033

03.05.2026

01.05.2028

26.04.2025

24.07.2025

03.05.2026

01.08.2026

Equity-settled share options and cash-settled share options granted to Directors and employees (note 33) and still outstanding at
31 December 2022 were as follows:

Portmeirion Group Phantom Option Plan

2012 Approved Plan

2012 Unapproved Plan

2012 Approved Plan

2012 Unapproved Plan

Portmeirion Group Phantom Option Plan

2012 Approved Plan

2012 Unapproved Plan

2018 Deferred Incentive Plan

Number
of shares

33,000

48,616

105,884

77,319

227,181

42,500

13,934

245,066

27,649

Exercise
price per
share
(p)

446.0

632.5

570.0

Dates on which exercisable

Earliest

Latest

05.05.2023

03.05.2030

05.05.2023

03.05.2030

05.05.2023

03.05.2030

26.03.2024

24.03.2031

26.03.2024

24.03.2031

26.04.2025

24.04.2027

26.04.2025

24.04.2032

26.04.2025

24.04.2032

—

26.04.2025

24.07.2025

Options held by the Directors are shown in the Directors’ Remuneration Report on pages 56 and 57.

27. Own shares

Treasury shares

At 1 January

Shares issued under employee share schemes

At 31 December

ESOP shares

At 1 January

Shares issued under employee share schemes

At 31 December

Total at 31 December

2023
£’000

393

—

393

2023
£’000

2,715

—

2,715

3,108

2022
£’000

409

(16)

393

2022
£’000

2,715

—

2,715

3,108

The Group currently holds 210,282 (2022: 210,282) ordinary shares of 5p each in treasury.

The ESOP share reserve represents the cost of shares in Portmeirion Group PLC purchased in the market and held by the Portmeirion
Employees’ Share Trust to satisfy options under the Group’s share option schemes (note 33). The number of ordinary shares held by the
Portmeirion Employees’ Share Trust at 31 December 2023 was 234,523 (2022: 234,523).

Annual Report and Accounts 2023 • Portmeirion Group PLC 93

Financial StatementsNotes to the Financial Statements continued

28. Notes to the statements of cash flows

Group

Current borrowings

Non-current borrowings

Lease liabilities

Total liabilities from financing activities

Current borrowings

Non-current borrowings

Lease liabilities

Total liabilities from financing activities

Notes:

1 January
2023

Financing(1)
cash flows

Other(2)
changes

31 December
2023

8,789

2,981

6,350

18,120

(2,135)

(2,297)

(2,283)

(6,715)

1,171

299

3,745

5,215

7,825

983

7,812

16,620

1 January
2022

Financing(1)
cash flows

Other(2)
changes

31 December
2022

1,986

4,965

6,814

13,765

6,291

(2,174)

(1,864)

2,253

512

190

1,400

2,102

8,789

2,981

6,350

18,120

(1) The cash flows make up the net amount of repayments of borrowings in the cash flow statement, plus interest payments in operating cash flows.

(2) Other changes are the amortisation of upfront facility fees, interest accrued, new leases and translation adjustments.

29. Contingent liabilities
The Group and the Company have provided a guarantee to the Trustees of the UK defined benefit pension scheme which guarantees all
present and future obligations and liabilities up to a maximum amount equal to the entire aggregate liability.

30. Related party transactions
Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in
this note. Transactions between the Group and its subsidiaries are disclosed below.

Group

Transactions with Directors/Officers relate to the Company’s grant of share options. On 2 May 2023, under The Portmeirion Group 2022
Approved and Unapproved Share Option Plan, when 50,000, 35,000, 35,000, 35,000 and 15,000 share options awards were granted to
M Raybould, M Knapper, W Robedee, D Sproston and M MacDonald respectively at an option price of £4.69 per share when the market price
was £4.69 per share.

In addition, on 2 May 2023, under The Portmeirion Group 2018 Deferred Incentive Share Option Plan, 5,275, 2,686, 3,864 and 2,087 share
option awards were granted to M Raybould, M Knapper, W Robedee and D Sproston respectively at a total exercise price of £1 per individual
when the market price was £4.69 per share.

Several of the Directors made purchases of goods from the Group during the year on the same terms as those available to all employees. Total
purchases did not exceed £3,000 for any Director in the year or in the prior year.

No Director of the Company had a financial interest in any material contract, other than those for service, to which the Company was a party
during the financial year.

The key management personnel of the Group are considered to be the Directors, the remuneration of whom is set out in note 7 on page 83.

Company

During 2023 net transactions totalling £2,125,000 were credited (2022: £624,000 credited) to the intercompany account with the Company’s
subsidiary, Portmeirion Group UK Limited. These transactions represented payments made on behalf of the Company by Portmeirion Group UK
Limited and a credit relating to share-based payments.

During the year there were no changes in the Portmeirion Employees’ Share Trust (2022: £nil). The purpose of the loan is for acquiring shares
to satisfy Group share option exercises (note 33). The total outstanding loan is now £2,715,000 (2022: £2,715,000). The ESOP share reserve is
disclosed in note 27.

The outstanding balances with subsidiary undertakings at 31 December 2023 and 31 December 2022 are shown in note 20.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements31. Pensions
The Group operates group personal pension plans in the UK and a discretionary money purchase scheme in the USA.

The total cost charged to income of £1,398,000 (2022: £1,319,000) represents contributions payable to these schemes by the Group at rates
specified in the rules of the schemes.

The UK defined benefit scheme was frozen, i.e. closed to new entrants and for future accrual of benefits, at 5 April 1999. Following the decision
for the scheme to be frozen, formal notice was given to employees in January 1999. A defined contribution pension scheme commenced on
6 April 1999 for all eligible UK employees. This scheme was closed on 31 October 2002 and was replaced by a group stakeholder pension
plan. Membership in this scheme was transferred to a group personal pension plan during 2013.

All equity and debt instruments (excluding insured pensions) have quoted prices in active markets.

Investment risk

The present value of the defined benefit liability is calculated using a discount rate determined by reference to high quality corporate bond
yields; if the return on plan assets is below this rate, it will increase the scheme deficit.

Interest risk

A decrease in the bond interest rate will increase the scheme liability.

Longevity risk

The present value of the defined benefit scheme liability is calculated by reference to the best estimate of the mortality of the scheme
participants both during and after their employment. An increase in the life expectancy of the scheme participants will increase the scheme’s
liability.

Salary risk

The present value of the defined benefit scheme liability is calculated by reference to the salary of scheme participants at the point the scheme
was closed. As such, only inflationary increases in the salary of scheme participants will increase the scheme’s liability.

Valuation and assumptions

For the defined benefit scheme, the most recent triennial valuation was at 5 April 2020. The main actuarial assumptions used in the
valuation were:

• RPI for current pensioners of 3.00% per annum;

• RPI for future pensioners of 3.00% per annum;

• CPI of 2.40% per annum;

• pre-retirement valuation rate of interest of 2.10% per annum;

• post-retirement valuation rate of interest for current pensioners of 1.10% per annum;

• post-retirement valuation rate of interest for future pensioners of 1.10% per annum; and

• mortality experience based upon S2PA tables with projections based on year of birth with a long-term rate of improvement of 1.25%

per annum.

At the date of the last valuation on 5 April 2020 the market value of the scheme assets was £35,596,000 and the scheme had a deficiency
of £8,273,000. However, an additional valuation was carried out at 31 May 2021 due to changes in scheme assumptions and revealed a
deficiency of £1,300,000.

The actuarial valuation of the scheme was updated at 31 December 2023 in accordance with IAS 19 by qualified actuaries based upon draft
valuation results at 5 April 2023.

Annual Report and Accounts 2023 • Portmeirion Group PLC 95

Financial StatementsNotes to the Financial Statements continued

31. Pensions continued

Valuation and assumptions continued

The major assumptions used by the actuaries were:

Rate of increase of pensions in payment:

– Post 06.04.88 GMP

– Post 06.04.97 pension

– Rate of revaluation of pensions in deferment

Rate used to discount scheme liabilities

Inflation assumption:

– RPI

– CPI

Life expectancy at 65 for a member:

– Currently aged 65 – male

– Currently aged 45 – male

– Currently aged 65 – female

– Currently aged 45 – female

Sensitivity analysis

2023

2022

2.90%

2.25%

4.50%

3.05%

2.25%

21.0

22.3

23.4

24.9

3.00%

2.35%

4.90%

3.15%

2.35%

21.5

22.8

23.8

25.3

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected inflation increases and
life expectancy. The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.

If the discount rate is 0.25% lower, the defined benefit obligation would increase by £784,000 (2022: £786,000).

If inflation and related assumptions increased by 0.25%, the defined benefit obligation would increase by £154,000 (2022: £175,000).

If life expectancy increased by one year for both men and women, the defined benefit obligation would increase by £942,000 (2022:
£1,295,000).

The sensitivity analysis presented may not be representative of the actual change in the defined benefit obligation as it is unlikely that the
changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected
unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability
recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Analysis of scheme assets and liabilities

The amount included in the balance sheet arising from the Group’s obligations in respect of its defined benefit scheme is as follows:

Scheme assets

Equities

Bonds

Diversified growth funds

Liability driven investments

Insured pensions

Cash

Total fair value of assets

Present value of defined benefit obligations

Asset in the scheme

Annual Report and Accounts 2023 • Portmeirion Group PLC

2023
Fair
value
£’000

6,813

7,350

4,480

5,553

2,387

241

2022
Fair
value
£’000

5,828

6,691

4,528

6,376

2,730

26,824

(25,680)

1,144

26,220

(25,903)

317

Financial Statements

31. Pensions continued

Analysis of the amount included in the income statement

Interest on pension scheme assets

Interest on pension scheme liabilities

Amount credited to interest income

Amounts recognised in the consolidated statement of comprehensive income

Return on plan assets (excluding amounts included in net interest expense)

Actuarial gains and losses arising from changes in financial assumptions

Actuarial gains and losses arising from changes in demographic assumptions

Actuarial gains and losses arising from experience adjustments

Remeasurement of the net defined benefit pension scheme liability

2023
£’000

1,263

(1,240)

2022
£’000

730

(706)

2023
£’000

245

2022
£’000

(14,984)

(1,247)

13,956

543

963

504

(5)

(484)

(1,517)

The cumulative amount of actuarial gains and losses recognised in the consolidated statement of comprehensive income since adoption of
IFRS is a loss of £8,475,000 (2022: £8,979,000).

Analysis of movements in scheme assets and liabilities

Movements in the present value of defined benefit obligations were as follows:

At 1 January

Interest cost

Remeasurements (financial assumptions)

Remeasurements (demographic assumptions)

Remeasurements (experience adjustments)

Benefits paid

At 31 December

Movements in the fair value of scheme assets were as follows:

At 1 January

Interest on assets

Remeasurement of assets

Contributions by the employer

Benefits paid

At 31 December

2023
£’000

25,903

1,240

1,247

(543)

(963)

(1,204)

25,680

2023
£’000

26,220

1,263

245

300

(1,204)

26,824

2022
£’000

39,696

706

(13,956)

484

(1,032)

25,903

2022
£’000

40,606

730

(14,984)

900

(1,032)

26,220

Annual Report and Accounts 2023 • Portmeirion Group PLC 97

Financial StatementsNotes to the Financial Statements continued

31. Pensions continued

Pension contributions

The estimated amount of contributions expected to be paid to the scheme during the next financial year is £nil (2023: £300,000). The Group is not
currently contracted to make further contributions to the scheme.

The average duration of the defined benefit obligation at the end of the reporting period is 17 years.

The asset has been recognised in full as the economic benefits of the scheme will be available as a refund, following the gradual settlement of the
scheme liabilities over time as members leave the scheme.

At 31 December 2023, contributions of £178,000 (2022: £148,000) due in respect of the current reporting period had not been paid over to the
UK schemes.

In the United States there was a provision for payments into the money purchase scheme of £4,000 (2022: £102,000) at 31 December 2023.

32. Financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the
basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are
disclosed in note 2.

Financial risk management objectives

Capital management
The Group and the Company manage their capital to ensure that all entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders. The Group’s overall strategy remains unchanged from 2022.

The capital structure of the Group consists of cash and cash equivalents, borrowings and equity attributable to equity holders, comprising
capital, reserves and retained earnings.

The Group is not subject to any externally imposed capital requirements. The Group Board reviews the capital structure at each Board meeting
and considers the cost of capital and the risks associated with each class of capital.

Credit risk
The Group’s principal financial assets are cash, short-term deposits and trade receivables. The Group’s policy is to place funds on short-term
deposit with highly rated institutions. Accounts receivable are monitored closely and provisions are made for expected credit loss where
appropriate. The creditworthiness of customers is assessed prior to opening new accounts and on a regular basis for significant customers.
The assessment of credit quality of trade receivables is outlined in note 20.

The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics that is not covered by credit insurance.

The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group and
Company’s maximum exposure to credit risk.

Interest rate risk management and sensitivity analysis
The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates as disclosed in
note 24. The risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings, and could further be mitigated
by the use of interest rate swap contracts and forward interest rate contracts if deemed appropriate. If interest rates had been 1% higher
and all the other variables were held constant, the Group’s profit for the year ended 31 December 2023 would decrease by £169,000 (2022:
£138,000).

Foreign currency risk management
The Group has exposure to foreign currency risk arising from its net investments in and cash flows from overseas subsidiaries. Its policy in
managing this risk is to maintain appropriate levels of net assets in the overseas companies and utilise foreign currency forward contracts.
The most significant risk of exposure to foreign currency arises from the US dollar sales made by Portmeirion UK to Portmeirion North America.
The Group’s net exposure to US dollar cash flows for the coming year is not expected to be significant. At the year end the Group had in place
an average rate option in US dollars to manage the risk arising from the retranslation of profit made in the United States, and subsequent to
the year end the Group placed a forward contract for US dollars.

The Group enters into derivative transactions only to manage exposure arising from its underlying businesses. No speculative derivative
contracts are entered into.

The Group undertakes certain trading transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise.
Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts when considered
appropriate. Open derivative positions at the year end are not material.

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements32. Financial instruments continued

Financial risk management objectives continued

The carrying amounts of the Group’s material foreign currency denominated monetary assets and monetary liabilities at the reporting date are
as follows:

Euro

US dollar

Foreign currency sensitivity analysis
The Group is mainly exposed to the currencies of euro and US dollar.

Liabilities

Assets

2023
£’000

3,985

2022
£’000

627

5,495

2023
£’000

239

8,111

2022
£’000

467

10,116

The following table details the Group’s sensitivity to a 10% increase and decrease in sterling against the relevant foreign currencies. 10% is
the sensitivity rate which represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity
analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 10%
change in foreign currency rates. A negative number below indicates a decrease in profit where sterling strengthens 10% against the relevant
currency. For a 10% weakening of sterling against the relevant currency, there would be an equal and opposite impact on profit.

(Loss)/profit

Euro impact

US dollar impact

2023
£’000

(19)

2022
£’000

2023
£’000

(17)

2022
£’000

(114)

Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate reserves and banking facilities, monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Group’s expected maturity for its assets and liabilities. The tables have been drawn up based on the
undiscounted contractual maturities of the financial assets and liabilities including interest that will be earned on those assets except where
the Group anticipates that the cash flow will occur in a different period.

At 31 December 2023

Financial assets

Other assets

Pension scheme asset

Total assets

Financial liabilities

Borrowings

Other liabilities

Total liabilities

Cumulative gap

Weighted
average
effective
interest rate
%

Less than
1 month
£’000

0.50

16,327

1–3
months
£’000

1,397

—

16,327

1,397

Non-
financial
assets/
(liabilities)
£’000

—

69,778

1,144

Total
£’000

17,724

69,778

1,144

70,922

88,646

Over
3 months
£’000

—

7.25

—

(12,159)

(500)

—

(648)

(8,308)

—

(12,807)

(8,808)

(1,039)

(527)

(7,460)

(3,015)

(12,041)

(13,698)

(527)

(16,416)

(3,015)

(33,656)

2,629

3,499

(12,917)

—

Annual Report and Accounts 2023 • Portmeirion Group PLC 99

Financial Statements

Notes to the Financial Statements continued

32. Financial instruments continued

Liquidity and interest risk tables continued

At 31 December 2022

Financial assets

Other assets

Pension scheme assets

Total assets

Financial liabilities

Borrowings

Other liabilities

Weighted
average
effective
interest rate
%

Less than
1 month
£’000

1–3
months
£’000

Over
3 months
£’000

0.50

17,769

—

4.00

—

17,769

(15,028)

(500)

(590)

990

—

990

(683)

—

(14)

—

(11,270)

Non-
financial
assets/
(liabilities)
£’000

—

85,426

317

Total
£’000

18,759

85,426

317

85,743

104,502

—

(15,725)

(11,770)

(578)

(5,926)

(3,230)

(10,324)

Total liabilities and shareholders’ funds

(16,118)

(1,261)

(17,210)

(3,230)

(37,819)

Cumulative gap

1,651

1,380

(15,830)

—

Categories of financial instruments

Financial assets:

Cash and cash equivalents

Loans and receivables

Financial liabilities:

Amortised cost*

2023
£’000

2022
£’000

888

16,836

17,724

1,681

17,078

18,759

21,615

27,495

*Amortised cost includes Financial Liabilities and Borrowings as disclosed in the Liquidity and interest risk tables.

33. Share-based payments

Equity-settled share option schemes

The Group operates four share option schemes (“share schemes”) and one long-term incentive plan (“LTIP”) for senior managers and Directors.

The Group recognised a credit of £82,000 in 2023 and an expense of £91,000 in 2022. The Company recharged this credit/expenditure to
Portmeirion Group UK Limited.

a) The Portmeirion Group 2018 Deferred Incentive Share Option Plan (LTIP)
Options are granted to Executive Directors in a year over shares with a market value not exceeding 50% of the gross incentive earned by the
relevant Director in respect of the previous financial year. Options are exercisable at £1 per individual as the total exercise price. The vesting
period is three years. If the options remain unexercised after a period of three years and three months from the date of grant the options expire.

Details of the share options outstanding during the year are as follows:

Outstanding at 1 January

Granted during the year

Lapsed during the year

Surrendered during the year

Exercised during the year

Outstanding at 31 December

Exercisable at 31 December

2023

2022

Number
of share
options

27,649

13,912

—

41,561

—

Total
exercise
price
£

—

Number
of share
options

8,363

33,355

(5,706)

—

(8,363)

27,649

—

Total
exercise
price
£

(1)

—

(3)

—

The options outstanding at 31 December 2023 had a weighted average remaining contractual life of 1.9 years (2022: 2.5 years). In 2023
options were granted on 2 May. The aggregate of the estimated fair value of those options is £42,000.

100

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

33. Share-based payments continued

Equity-settled share option schemes continued

The inputs into the Black Scholes pricing model are as follows:

Weighted average share price at date of grant

Weighted average exercise price

Expected volatility

Expected life

Risk-free rate

Expected dividend rate

2023

£4.69

£nil

40%

2022

£5.70

£nil

31%

3.125 years

4.50%

5.12%

2.05%

4.96%

Expected volatility was determined by calculating the historical volatility over the previous 3.125 years. The expected life used in the model
assumes that the options will be exercised on average halfway through the period during which they can be exercised.

b) The Portmeirion 2022 and 2012 Approved and Unapproved Share Option Plans (Share schemes)
Options are exercisable at a price equal to the closing quoted market price of the Company’s shares on the day prior to the date of the grant.
The vesting period is three years. If the options remain unexercised after a period of ten years from the date of grant the options expire.

Details of the share options outstanding during the year are as follows:

Outstanding at 1 January

Granted during the year

Lapsed during the year

Surrendered during the year

Exercised during the year

Outstanding at 31 December

Exercisable at 31 December

2023

2022

Number
of share
options

718,000

323,000

(215,500)

—

Weighted
average
exercise
price
£

5.698

4.690

4.898

—

Number
of share
options

524,500

295,500

(102,000)

—

825,500

5.513

718,000

—

The options outstanding at 31 December 2023 had a weighted average remaining contractual life of 8.4 years (2022: 8.4 years).

In 2023, options were granted on 2 May. The aggregate of the estimated fair value of those options is £280,000.

The range of exercise prices for the options outstanding at 31 December is £4.690 to £6.325.

The inputs into the Black–Scholes pricing model are as follows:

Weighted average share price at date of grant

Weighted average exercise price

Expected volatility

Expected life

Risk-free rate

Expected dividend rate

2023

£4.690

40%

4 years

4.50%

5.12%

Weighted
average
exercise
price
£

5.722

5.700

5.827

—

5.698

—

2022

£5.700

30%

4 years

2.05%

4.96%

Expected volatility was determined by calculating the historical volatility over the previous four years. The expected life used in the model is
based upon management’s best estimate of life using historical experience as a benchmark.

34. Post balance sheet event
Subsequent to the year end Lloyds extended the revolving credit facility agreement to September 2025 with a 1+1 annual renewal extension
option (at their discretion) to extend to September 2026 and then September 2027.

Annual Report and Accounts 2023 • Portmeirion Group PLC 101

Financial Statements
Five-year Summary

Consolidated income statement information

Years ended 31 December

Revenue

(Loss)/profit before tax

Tax

(Loss)/profit attributable to equity holders

Earnings per share

Diluted earnings per share

Dividends paid and proposed per share

Consolidated balance sheet information

At 31 December

Assets employed

Non-current assets

Current assets

Current liabilities

Non-current liabilities

Financed by

Called up share capital

Share premium account and reserves

2023
£’000

2022
£’000

2021
£’000

2020
£’000

2019
£’000

102,743

110,820

106,018

87,854

92,816

(8,528)

(8,456)

(61.46)p

(61.41)p

5.50p

6,970

(1,415)

5,555

40.39p

40.35p

15.50p

5,962

(2,721)

3,241

23.58p

23.49p

13.00p

(232)

(503)

(735)

(6.02)p

0.00p

7,100

(1,286)

5,814

54.66p

54.58p

8.00p

2023
£’000

2022
£’000

2021
£’000

2020
£’000

2019
£’000

32,749

55,897

41,025

63,477

37,821

56,745

35,180

54,751

35,051

47,291

(23,818)

(26,954)

(19,926)

(18,716)

(18,731)

(9,838)

(10,865)

(12,693)

(15,506)

(15,513)

54,990

66,683

61,947

55,709

48,098

710

54,280

54,990

710

65,973

66,683

710

61,237

61,947

710

54,999

55,709

555

47,543

48,098

102

Annual Report and Accounts 2023 • Portmeirion Group PLC

Financial Statements

Pictured: Sophie Conran for Portmeirion Lavandula.

Board of Directors

Non-executive Chairman
Dick Steele BCOM FCA CTA

Senior Non-executive Director
Angela Luger BSc

Chief Executive
Mike Raybould BSc ACA

Group Finance Director
David Sproston BSc ACA

Group Operations Director
Mick Knapper

Global Sales Director
Bill Robedee JD BA

Non-executive Director
Andrew Andrea BA MA ACA

Non-executive Director
Clare Askem BSc MBA

Non-executive Director
Jeremy Wilson BSc ACA

Company Secretary
Moira MacDonald FCG

Registered office and number
London Road
Stoke-on-Trent
ST4 7QQ

Tel: +44 (0) 1782 744721

www.portmeiriongroup.com
Registered number: 124842