Final Results

Portmeirion Group PLC
18 March 2004


                             PORTMEIRION GROUP PLC
                              PRELIMINARY RESULTS
                        FOR YEAR ENDED 31 DECEMBER 2003


CHAIRMAN'S STATEMENT

Financial summary for the year

                                           2003         2002          (Decrease)
                                         £000's       £000's                   %
Turnover                                 28,512       30,712               (7.2)
Profit before tax                         2,003        2,923              (31.5)
Basic earnings per share                 12.54p       19.75p              (36.5)
Dividends per share                      13.25p       13.25p                   -

Sales for the year were £28.512m, 7.2% below the previous year.

The profit before tax of £2.003m compares with £2.923m for the previous year.

The Board is recommending a final dividend of 9.95p bringing the total to 13.25p
for the year. This is unchanged from 2002.

Results for the year

The pre-tax profit of £2.003m was in line with expectations, and achieved even
after a £234,000 charge in respect of impairment of an investment in an
associate company which provides raw material to the pottery industry. Some
improvement in the second half sales trend, together with tight cost control,
enabled the company to achieve a pre-tax profit of £2.237m before this
impairment charge.

Sales in the first half of the year were 8% below the previous year. The trend
improved somewhat in the second half, with sales 6% below the previous year.

In our major markets, the UK sales declined by 6%, but also showed an improving
trend in the second half due to increased sales of gift products. Overall,
market conditions have been difficult in our product sector, and competition
from lower cost retailers fierce. However, we have already seen an improvement,
with UK sales in the first two months moving ahead of last year.

Sales in North America were 18% below the previous year, and now represent 35%
of total Group sales (39% in 2002). Although the same improved sales trend in
the second half was achieved in North America, the impact of the Iraq war, and
the SARS epidemic, significantly impacted on the entire market's performance.

The Far East again proved to be the Group's most successful market, with sales
increasing by 19% on the previous year, and accounting for over 14% of total
sales. I believe there is great potential for continuing long-term growth in
this region, and the Group will invest in the required management resources to
bring this to fruition.

As referred to earlier, costs were well managed and resulted in a manufacturing
gross profit margin broadly in line with last year. Given the reduction in
manufactured volume, this was a commendable achievement, and reflects our
commitment to lean techniques. I expect our investment in manufacturing
efficiency will bring about further improvements.

A tight control on costs helped generate cash flows from operations of £1.9
million (£5.1 million in 2002). As a result, our strong balance sheet has only
slightly decreased, with cash balances at the end of December 2003 totalling
£7.2 million (2002: £7.6 million).

Given the Group's strong balance sheet, the Board have decided that the dividend
for the year will be maintained at 13.25p.

Operating strategy

The Group has been adapting to rapidly changing market conditions. Overall price
levels of ceramic tableware have been falling, as the amount of product imported
from low cost countries such as the Far East has increased. Lower priced
retailers, such as supermarkets, have moved to take advantage and taken
increased market share.

Sales of our classic ranges, including Botanic Garden and Pomona, still
represent over 60% of total Group sales. These will now be supplemented by the
recent introduction of a new tableware range called Soho, with totally new shape
combinations, that meet the need of international cuisine. The diversification
into glassware and giftware will continue, building on the successful
establishment of these ranges with our retail customers.

The Board concluded that these changing market conditions provided an
opportunity for Portmeirion to target a new market, and so during the last
financial year, the Group developed and launched new ceramic ranges, known as PS
Portmeirion Studio. These ranges were designed to be manufactured in the Far
East, and they can be retailed at approximately two-thirds of Portmeirion's
classic ranges. They do not compete with our established classics, and I believe
they will provide genuinely incremental business. The first launch was in the
USA at the turn of the year, and was immediately successful. As a result, sales
in the USA for the first two months of 2004 are ahead of the previous year.
Ranges of PS Portmeirion Studio are being introduced into the UK.

The plans and specification for the Group's new distribution centre in
Stoke-on-Trent are now in the final stages of completion, and I expect
construction to start later this year. This will enable the Group to provide its
customers with a much-enhanced quality of service, and a more efficient use of
resources. The Board is committed to investing in manufacturing processes which
will continue to improve the Group's productivity and competitiveness.

Current trading and prospects

Although sales in the first two months for the year are slightly below last
year, the current order book, and the new product introductions, particularly PS
Portmeirion Studio, give us added confidence in 2004. It is also encouraging to
see an improvement in our sales performance and prospects in North America,
since this has such a significant impact on the total Company performance.

Against this, the new year provides some challenges. Following an actuarial
valuation the Group has committed to additional contributions of £350,000 per
annum to the Group's defined benefit pension scheme, which was closed in 1999.
In addition, although the Group's policy is to hedge against exchange rate
movements, the fall in the value of the US dollar is likely to cost the Group in
the region of £450,000 in 2004, at current rates.

I would like to thank the management team and the whole workforce for their
efforts in 2003, in meeting the challenges of a difficult year, and ensuring
that we are well prepared for 2004 and beyond.

Arthur Ralley
Chairman
18th March 2003

For further information please contact:
Arthur Ralley, Chairman
Brett Phillips, Group Finance Director
Tel: [phone]

CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31st December 2003

                                                     Notes      2003        2002
                                                              £000's      £000's

Turnover - continuing operations                       4      28,512      30,712

Raw materials and operating costs                           (26,665)    (28,174)

Operating profit - continuing operations                       1,847       2,538

Share of profit of associated undertakings                       216         230
Interest receivable and similar income                           174         155
Impairment of investment in associated undertaking             (234)           -

Profit on ordinary activities before taxation                  2,003       2,923

Taxation on profit on ordinary activities                      (697)       (870)

Profit on ordinary activities after taxation                   1,306       2,053
being the profit for the financial year

Dividends                                                    (1,381)     (1,378)

Retained (loss)/profit for the financial year                  ( 75)         675

Earnings per share                                     2      12.54p      19.75p

Diluted earnings per share                             2      12.53p      19.71p

Dividends per share                                    3      13.25p      13.25p


CONSOLIDATED BALANCE SHEET
As at 31st December 2003

                                                      2003             2002
                                                  £000's   £000's  £000's £000's

Fixed assets
Tangible assets                                             7,872          8,249
Investments                                                 1,460          1,503

                                                            9,332          9,752

Current assets
Stocks                                             6,775            6,195
Debtors                                            4,868            5,715
Cash at bank and in hand                           7,228            7,678

                                                  18,871           19,588

Creditors: amounts falling due within one year   (3,932)          (4,732)

Net current assets                                         14,939         14,856

Total assets less current liabilities                      24,271         24,608

Provisions for liabilities and charges                      (307)          (261)

Net assets                                                 23,964         24,347

Capital and reserves
Called up share capital                                       521            520
Share premium account                                       4,580          4,547
Profit and loss account                                    18,863         19,280

Equity shareholders' funds                                 23,964         24,347



CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31st December 2003

                                                                   Notes    2003    2002
                                                                          £000's  £000's

Cash inflow from operating activities                                6     1,852   5,053

Returns on investments and servicing of finance                      7       173     175

Taxation                                                                   (431)   (827)

Capital expenditure and financial investment                         7     (697)   (563)

Equity dividends paid                                                    (1,381) (1,377)

Cash (outflow)/inflow before use of liquid resources and financing         (484)   2,461

Management of liquid resources                                               420 (1,824)

Financing                                                            7        34      12

(Decrease)/increase in cash in the year                              5      (30)     649


Reconciliation of net cash flow to movement in net funds
                                                                     2003   2002
                                                                   £000's £000's

(Decrease)/increase in cash in the year                              (30)    649

Cash (inflow)/outflow from (decrease)/increase in liquid resources  (420)  1,824

Net funds at 1st January                                            7,678  5,205

Net funds at 31st December                                          7,228  7,678


STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 31st December 2003

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                                                                   2003     2002
                                                                 £000's   £000's

Profit for the financial year                                     1,306    2,053

Currency translation differences                                  (342)    (608)

Total recognised gains and losses for the financial year            964    1,445

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
                                                                 2003       2002
                                                               £000's     £000's

Profit for the financial year                                   1,306      2,053

Dividends                                                     (1,381)    (1,378)

Currency translation differences                                (342)      (608)

Shares issued under employee share schemes                         34         12

Net (reduction)/addition to shareholders' funds                 (383)         79

Opening shareholders' funds,                                   24,347     24,268

Closing shareholders' funds                                    23,964     24,347

NOTES
1. The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31st December 2003 and 2002 but is
derived from those accounts. Statutory accounts for 2002 which have been
delivered to the Registrar of Companies, contain an unqualified audit opinion
and did not contain a statement under Section 237(2) or (3) of the Companies Act
1985. Statutory accounts for the year ended 31st December 2003, will be
finalised on the basis of the financial information presented by the Directors
in this preliminary announcement and will be delivered to the Registrar of
Companies in due course. This announcement was approved by the Board of
Directors on 17th March 2004.

2. Earnings per share

Basic

The basic earnings per share is calculated by dividing the profit after taxation
of £1,306,000 (2002 - £2,053,000) by the weighted average number of Ordinary
shares in issue during the year of 10,414,918 (2002 - 10,394,731).

Diluted

The diluted earnings per share is calculated in accordance with Financial
Reporting Standard 14. This calculation uses a weighted average number of
Ordinary shares in issue adjusted to assume conversion of all dilutive potential
Ordinary shares and is show below:

                    Earnings       2003  Earnings  Earnings       2002  Earnings
                           £   Weighted Per Share         £   Weighted per Share
                              Number of   (Pence)            Number of   (Pence)
                                 Shares                         Shares
Basic earnings per 1,306,000 10,414,918     12.54 2,053,000 10,394,731     19.75
share

Effect of dilutive
securities:
Employee share                    6,000                         23,092
options

Diluted earnings   1,306,000 10,420,918     12.53 2,053,000 10,417,823     19.71
per share

3. The Directors propose the payment of a final dividend of 9.95p (2002 - 9.95p)
per Ordinary share on 28 May 2004 to shareholders on the register on 7 May 2004,
making a total of 13.25p for the year.

4. Turnover by destination
                                                          2003              2002
                                                        £000's            £000's

United Kingdom                                          12,055            12,820
North America                                            9,920            12,108
European Union                                           1,873             1,792
Far East                                                 4,099             3,448
Rest of the World                                          565               544

                                                        28,512            30,712

5. Analysis of net funds
                                                2002        Cash flow       2003
                                              £000's           £000's     £000's

Cash in hand, at bank                          1,194             (30)      1,164
Short term money market deposits               6,484            (420)      6,064

Total                                          7,678            (450)      7,228

6. Reconciliation of operating profit to operating cash flows
                                                                  2003      2002
                                                                £000's    £000's

Operating profit                                                 1,847     2,538
Depreciation                                                       950     1,231
Exchange loss                                                    (305)     (478)
Loss on sale of tangible fixed assets                               35         9
(Increase)/Decrease in stocks                                    (580)     1,396
Decrease in debtors                                                611       461
Decrease in creditors                                            (706)     (104)

Net cash inflow from operating activities                        1,852     5,053

All of the above relate to continuing operations

7. Analysis of cash flows for headings netted in the cash flow statement

                                                         2003          2002
                                                        £000's        £000's

Returns on investments and servicing of finance

Interest received                                       173           175

Net cash inflow for returns on investments
and servicing of finance                                        173         175

Capital expenditure and financial investment
Purchase of tangible fixed assets                     (801)         (611)
Sale of tangible fixed assets                           104            48

Net cash outflow for capital expenditure
and financial investments                                     (697)       (563)

Financing
Issue of Ordinary shares under share option schemes      34            12

Net cash inflow from financing                                   34          12




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