Portmeirion powers ahead on the back of steady demand

PORTMEIRION Potteries (Holdings), the Staffordshire tableware maker, bucked difficult economic conditions in the US and UK to boost taxable profits from pounds 1.42m to pounds 1.59m for the half-year to 30 June, writes Neil Thapar.

The profits increase, achieved on a 9 per cent advance in sales to pounds 11.4m, reflected robust demand for Portmeirion's products in its two principal markets. Brett Phillips, finance director, attributed continued progress amid generally weak consumer spending to eye- catching designs and emphasis on quality.

Earnings per share improved from 8.89p to 9.88p. The interim dividend is held at 2.25p.

The results mask a dip in operating margins due to teething problems with the installation of new manufacturing plant. Although the hitches have been ironed out, they led to a virtually unchanged profit of pounds 1.54m at the trading level. However, this was more than offset by strong cash flow, which reduced the group's first-half interest charges from pounds 220,000 to pounds 27,000. The group ended the half-year with net cash of pounds 200,000 compared with pounds 2.2m borrowings at the same time last year.

Kleinwort Benson Securities, the company's broker, is forecasting that full-year taxable profits will rise from pounds 3.7m to pounds 4m. The shares rose 4p to 399p.