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AIMprospector

TOPpick

TOPpick: Portmeirion: over 250 hundred years of brand heritage Listed since 1988, tableware distributor and manufacturer Portmeirion has leveraged its brands to become one of AIM’s most successful companies. Today the company embodies many of the characteristics so loved by US super-investor Warren Buffett. From its Stoke headquarters, Portmeirion Group employs 600 people worldwide. The company owns four brands. ‘Pimpernel’ produces patterned table accessories such as placemats, coasters and trays. The eponymous Portmeirion, in existence since 1960, is a tableware and cookware brand. The remaining and oldest brands in Portmeirion’s portfolio are ‘Spode’ and ‘Royal Worcester’, both purchased in 2009. The two most recent additions bring the most significant global recognition and collector interest.

employs 600 people worldwide Much has been made of Warren Buffett’s love of brand-owning companies. The billionaire investor has made himself one of the world’s richest men by earning outsized returns from his portfolio of investments. Buffett is a big investor in healthcare brand portfolio firm Procter & Gamble. His investment firm also owns a huge portion of Coca-Cola. www.aimprospector.co.uk

the Portmeirion botanic garden pattern

Portmeirion’s brands put them in that special class of companies with pricing power and long-term customer appeal. Portmeirion’s market position and brand strength mean that of all of the companies on AIM, I would expect Mr Buffett to like them most. Companies with recognised brands and excellent customer service are ceteris paribus more likely to make sales. Their brand strength frequently enables them to charge higher prices than less recognised competition. A rival would have to invest considerably in promotion and would need decades to establish the assurance that comes from Spode, Portmeirion or Royal Worcester. A strong brand establishes a particularly virtuous circle for a manufacturer. Higher volumes bring economies of scale, delivering improved margins. Higher profits then

brand strength frequently enables them to charge higher prices facilitate more investment in both manufacturing and the brand. Spode embodies brand strength and heritage. Founded in 1776, Spode is one of the world’s best known tableware brands. The ‘Blue Italian’ pattern is nearly two hundred years old and remains a strong seller today. The Group’s best selling pattern, ‘Botanic Garden’ from Portmeirion is over forty years old. This pattern alone accounts for 40% of group sales. Second biggest seller is Spode’s ‘Christmas Tree’ design, which is particularly popular in North America. Royal Worcester, whose products are a staple feature of television antique shows, has a similar ancient history to Spode. As befits the name, along with

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August 2014 AIM Prospector  
August 2014 AIM Prospector  

Analysis on five AIM-quoted companies: Iomart, Jarvis Securities, NAHL Group, Plastics Capital and Portmeirion