Ceramics group in fourth profit warning

PORTMEIRION Potteries, the troubled ceramics group, showed further cracks yesterday when it issued its fourth profit warning in the space of 12 months.

Portmeirion warned that profits for the year to December would "inevitably" be below those of the previous year, knocking its shares down 12.5p to a new five-year low of 190p.

Meanwhile, the company revealed that it had paid out pounds 393,000 in "compensation costs and professional fees" to two ex-directors, including Mary-Lorraine Hughes, the former chief executive who quit Portmeirion after its June profit warning.

The pay-offs helped to explain the sharp fall in Portmeirion's first- half profits, which slumped by 62 per cent to pounds 1.05m. Turnover slipped by 18 per cent to pounds 13.3m. It blamed the shortfall on "increasingly competitive and difficult trading conditions" throughout the first half. In previous statements, the company has blamed poor results on the strong pound, which discouraged tourists from visiting the UK.

The company is planning a further announcement in October about its vacant chief executive's position. Kami Farhadi, a director, has been acting chief executive since Ms Hughes left.

Portmeirion said it was planning extensive advertising campaigns in the United States and the UK to boost sales. It said the UK campaign, which was drawn up with the help of consultants, would focus the brand on "contemporary lifestyles" and support its Options line, which was launched earlier this year.

Euan Cooper-Willis, the chairman, said the company's strong balance sheet would allow it to develop and market a major new collection while maintaining an investment in new plant and equipment.

The company said that despite the shortfall it had decided to hold its interim dividend at 3.3p per share.