Half Year 2026 Portmeirion Group PLC Earnings Call

September 30, 2026

Speaker #1: Hello, and welcome to Portmeirion Group's interim results presentation for 2026. I'm Michael Scheepers, Chief Executive of Portmeirion Group. Over the next 25 minutes, I will take you through our first half performance, the progress we're making with our transformation, and our priorities for the remainder of this year and into 2027.

Michael Scheepers: Hello, and welcome to Portmeirion Group's interim results presentation for 2026. I'm Michael Scheepers, Chief Executive of Portmeirion Group. Over the next 25 minutes, I will take you through our H1 performance, the progress we are making with our transformation, and our priorities for the remainder of this year and into 2027. Before turning to the results, I would like to share why I joined Portmeirion and why I'm excited about the opportunity ahead. I joined as Group Commercial Director in December 2025 and became Chief Executive in May this year. I spent the previous nine years at Le Creuset in a number of commercial and leadership roles. I was part of the team that delivered significant growth and improved profitability of Le Creuset in EMEA.

Speaker #1: Before turning to the results, I would like to share why I joined Portmeirion and why I'm excited about the opportunity ahead. I joined as Group Commercial Director in December 2025 and became Chief Executive in May this year.

Michael Scheepers: Before turning to the results, I would like to share why I joined Portmeirion and why I'm excited about the opportunity ahead. I joined as Group Commercial Director in December 2025 and became Chief Executive in May this year. I spent the previous nine years at Le Creuset in a number of commercial and leadership roles. I was part of the team that delivered significant growth and improved profitability of Le Creuset in EMEA.

Speaker #1: I spent the previous nine years at La Cruse in a number of commercial and leadership roles. I was part of the team that delivered significant growth and improved profitability for La Cruse in EMEA.

Speaker #1: I see many parallels between that and Portmeirion, particularly in leveraging our strong brands and improving the commercial and operational execution behind them. Portmeirion has a portfolio of well-regarded brands, with a heritage stretching back more than 250 years.

Michael Scheepers: I see many parallels between that work and the opportunities here at Portmeirion, particularly in leveraging our strong brands and improving the commercial and operation execution behind them. Portmeirion has a portfolio of well-regarded brands with a heritage stretching back more than 250 years. Our three hero brands have craftsmanship and authenticity at their heart, and products that resonate with consumers in the UK and internationally. That gives us a substantial foundation to build on. I've also been struck by the support and camaraderie of colleagues across the group. I want to thank them for the welcome they have given me and for the commitment they are showing as we work through change together. We should be candid about our starting point. The business has faced significant challenges, and its financial performance has not been where it needs to be. My team and I are focused on fixing legacy issues.

Speaker #1: Our 3 hero brands have craftsmanship and authenticity at their heart, and products that resonate with consumers in the UK and internationally. That gives us a substantial foundation to build on.

Speaker #1: I've also been struck by the support and camaraderie of colleagues across the group. I want to thank them for the welcome they have given me, and for the commitment they are showing as we work through change together.

Speaker #1: We should be candid about our starting point: the business has faced significant challenges, and its financial performance has not been where it needs to be.

Speaker #1: My team and I are focused on fixing legacy issues. The strength of our brands must translate into better financial results. That is the task for me and our newly appointed Senior Leadership Team.

Michael Scheepers: The strength of our brands must translate into better financial results. That is the task for me and our newly appointed senior leadership team. There's a lot to do, but we are working at pace with a clear view of our priorities over the next 12, 24, and 36 months. These plans were the foundation of equity raise we completed in June, with the GBP 17.2 million of net proceeds received from new and existing shareholders. I would like to thank them for that support. Our ambition is substantial. Delivering it will require consistent execution over time. With that, let me turn to the H1 results. H1 trading was in line with management expectations. Our core tableware business grew by 4.1% at constant currency. That's encouraging, particularly given the difficult conditions in some of our markets. As expected, the headline loss before tax increased to GBP 4.5 million.

Speaker #1: There's a lot to do, but we are working at pace, with a clear view of our priorities over the next 12, 24, and 36 months.

Speaker #1: These plans were the foundation of the equity raise we completed in June, with the £17.2 million of net proceeds received from new and existing shareholders.

Speaker #1: I would like to thank them for that support. Our ambition is substantial, and delivering it will require consistent execution over time. With that, let me turn to the first-half results.

Speaker #1: First-half trading was in line with management expectations. Our core tableware business grew by 4.1% at constant currency. That's encouraging, particularly given the difficult conditions in some of our markets.

Speaker #1: As expected, the headline loss before tax increased to £4.5 million. We're obviously not satisfied with that level of performance. The results reflect cost pressures, including elevated energy costs and higher employment costs from minimum wage and national insurance.

Michael Scheepers: We are obviously not satisfied with that level of performance. The result reflects cost pressures, including elevated energy costs and higher employment costs from the minimum wage and national insurance. It also reflects deliberate investment in the people and capabilities needed to improve performance over the short to medium term. We have made good progress with Portmeirion: Elevated, our transformation strategy. Our full senior leadership team is now in place following the most recent appointments a couple of months ago. We have also made progress against the 12 operational KPIs we set out for 2026, which we believe give investors a clear way to follow our delivery. Alongside this, we have fundamentally reset our capital structure through our equity raise. Our new GBP 36 million asset-based lending facility is also now in place. These steps move us towards the fortress balance sheet that the board and I want to establish.

Speaker #1: It also reflects deliberate investment in the people and capabilities needed to improve performance over the short to medium term. We have made good progress with Portmeirion Elevated, our transformation strategy.

Speaker #1: Our full Senior Leadership Team is now in place, following the most recent appointments a couple of months ago. We've also made progress against the 12 operational KPIs we set out for 2026, which we believe give investors a clear way to follow our delivery.

Speaker #1: Alongside this, we have fundamentally reset our capital structure through our equity raise. Our new £36 million asset-based lending facility is also now in place.

Speaker #1: These steps move us toward the fortress balance sheet that the Board and I want to establish. They give us a stronger financial foundation, and further reducing debt and interest costs remains a priority.

Michael Scheepers: They give us a stronger financial foundation, and further reducing debt and interest costs remains a priority. We have made a good start to the H2. The macroeconomic backdrop remains challenging, but the order book for Spode Christmas Tree in North America is encouraging, and our direct Amazon model is progressing well in the United States. Turning to the financial summary, group sales declined by 1.9% on a reported basis and by just 0.2% at constant currency. Within that, the performance was mixed. Core tableware sales grew by 4.1% at constant currency, while Wax Lyrical sales declined by 18%. I will explain the drivers of both in the following slides. The headline loss before tax was GBP 4.5 million. Operating expenses increased by GBP 1.6 million, or just under 10%, reflecting investment in capability alongside higher freight, warehousing, and employment cost.

Speaker #1: We've made a good start to the second half. The macroeconomic backdrop remains challenging, but the order book for Spoiled Christmas Tree in North America is encouraging, and our direct Amazon model is progressing well in the United States.

Speaker #1: Turning to the financial summary, Group sales declined by 1.9% on a reported basis and by just 0.2% at constant currency. Within that, the performance was mixed.

Speaker #1: Core tableware sales grew by 4.1% at constant currency, while Wax Lyrical sales declined by 18%. I'll explain the drivers of both in the following slides.

Speaker #1: The headline loss before tax was £4.5 million. Operating expenses increased by £1.6 million, or just under 10%, reflecting investment in capability alongside higher freight, warehousing, and employment costs.

Speaker #1: Our net debt position improved significantly, principally because of the equity raise and the United States tariff refund of $2.3 million. We also had a seasonal working capital outflow alongside the impact of trading losses.

Michael Scheepers: Our net debt position improved significantly, principally because of the equity raise and the United States tariff refund of GBP 2.3 million. We also had a seasonal working capital outflow alongside the impact of trading losses. We are not declaring an interim dividend. Our priority remains to reduce debt and interest expense while delivering the transformation of the business. The group sales bridge shows the different conditions across our markets. North American sales grew by 9.7%. Spode performed well, and we continued to see momentum in the independent channel. Early signs from the move to a direct relationship with Amazon are encouraging, and we expect further progress in the H2. UK sales declined by 12.5%. The consumer environment remains difficult, and the market has been highly promotional, including the impact of clearance activity following some high-profile competitor administrations. The UK result also includes Wax Lyrical, where sales were down 18%.

Speaker #1: We are not declaring an interim dividend. Our priority remains to reduce debt and interest expense while delivering the transformation of the business. The Group Sales bridge shows the different conditions across our markets.

Speaker #1: North American sales grew by 9.7%. Spode performed well, and we continue to see momentum in the independent channel. Early signs from the move to a direct relationship with Amazon are encouraging, and we expect further progress in the second half.

Speaker #1: UK sales declined by 12.5%. The consumer environment remains difficult, and the market has been highly promotional, including the impact of clearance activity following some high-profile competitor administrations.

Speaker #1: The UK result also includes Wax Lyrical, where sales were down 18%. A key supplier was unable to provide core components, resulting in cancelled orders.

Michael Scheepers: A key supplier was unable to provide core components, resulting in canceled orders. That disruption was a significant factor in the decline. Wax Lyrical remains non-core to the group. In the meantime, the team is implementing its Getting Match Fit plan with a focus on profit improvement, simplifying the business, and developing further national sales opportunities. South Korean sales declined by 16.9%. The consumer backdrop remained challenging with elevated inventory in the market. We also took a deliberate decision to tighten credit controls with a number of commercial partners. As expected, that reduced sales in the period. Protecting our exposure is important as we reset the business in that market. Elsewhere, international sales grew by more than 25% with good momentum in Malaysia and Europe. We also entered Turkey, where the early signs are positive.

Speaker #1: That disruption was a significant factor in the decline. Wax Lyrical remains non-core to the group. In the meantime, the team is implementing its 'Getting Match Fit' plan, with a focus on profit improvement, simplifying the business, and developing further national sales opportunities.

Speaker #1: South Korean sales declined by 16.9%. The consumer backdrop remained challenging, with elevated inventory in the market. We also took a deliberate decision to tighten credit controls with a number of commercial partners.

Speaker #1: As expected, that reduced sales in the period. Protecting our exposure is important as we reset the business in that market. Elsewhere, international sales grew by more than 25%, with good momentum in Malaysia and Europe.

Speaker #1: We also entered Turkey, where the early signs are positive. The next slide separates out our core tableware business, which grew by 4.1% at constant currency.

Michael Scheepers: The next slide separates out our core tableware business, which grew by 4.1% at constant currency. North American growth was 9.7%, as shown on the previous slide, the Canadian market remaining weak. UK tableware sales were down 6%. This reflects the consumer and promotional pressures I have already described, but it is also more resilient performance than the overall UK figure, which includes Wax Lyrical. International tableware sales grew by nearly 20%, with Malaysia and Europe again performing well. These figures show that the core business is growing overall, although the recovery is uneven. Our task is to build on the stronger markets while addressing the specific issues in those that remain under pressure. Gross margin increased by 180 basis points to 42.9% in the H1. It is important to look at the components of that improvement. The US tariff repayment provided a one-off benefit of 300 basis points.

Speaker #1: North American growth was 9.7%, as shown on the previous slide. The Canadian market remaining weak. UK tableware sales were down 6%. This reflects the consumer and promotional pressures I have already described, but it's also more resilient performance than the overall UK figure, which includes wax lyrical.

Speaker #1: International tableware sales grew by nearly 20%, with Malaysia and Europe again performing well. These figures show that the core business's growing overall, although at the recovery is uneven.

Speaker #1: Our task is to build on the stronger markets while addressing the specific issues in those that remain under pressure. Gross margin increased by 180 basis points to 42.9% in the first half.

Speaker #1: It's important to look at the components of that improvement. The US tariff repayment provided a one-off benefit of 300 basis points. Volume and mix made a small positive contribution, partly offsite, by continued investment in our Made in Stoke-on-Trent onshoring strategy.

Michael Scheepers: Volume and mix made a small positive contribution, partly offset by continued investment in our Made in Stoke-on-Trent onshoring strategy. We are seeing operational improvements in the factory. We continue to believe that onshoring is the right long-term direction for our brands and that customers value products made in Stoke. Alongside our brand benefit, improving the economics of the factory remains essential. Excess inventory clearance reduced gross margin by 150 basis points. We are managing this activity responsibly with attention to how and where products are sold. We expect a similar level of clearance activity in the H2 as we work towards our GBP 4 million full-year target. While the reported margin improvement is welcome, we remain focused on the underlying drivers: product mix, pricing, manufacturing efficiency, and a reduction of excess stock. Turning to operating expenses, the total increase was GBP 1.6 million.

Speaker #1: We are seeing operational improvements in the factory. We continue to believe that onshoring is the right long-term direction for our brands, and that customers value products made in Stoke.

Speaker #1: Alongside that brand benefit, improving the economics of the factory remains essential. Excess inventory clearance reduced gross margin by 150 basis points. We're managing this activity responsibly.

Speaker #1: With attention to how and where products are sold, we expect a similar level of clearance activity in the second half as we work toward our 4 million full-year target.

Speaker #1: So while the reported margin improvement is welcome, we remain focused on the underlying drivers: product mix, pricing, manufacturing efficiency, and the reduction of excess stock.

Speaker #1: Turning to operating expenses, the total increase was $1.6 million. Around $700,000 related to investment in capability and the senior leadership team. Those appointments are now in place, and the priority is to translate that investment into better execution and financial performance.

Michael Scheepers: Around GBP 700,000 related to the investment in capability and the senior leadership team. Those appointments are now in place, and the priority is to translate that investment into better execution and financial performance. Warehousing and related freight costs increased by a similar amount, reflecting higher charges and the increase in volumes in our US business. We also faced the employment cost pressures discussed earlier. We delivered around GBP 300,000 of cost savings. Our move to a single e-commerce platform across the UK and US websites carries annualized savings of around GBP 200,000. We need the right capabilities to deliver the plan, but we are equally conscious of the cost base. The leadership team's focus is on ensuring that the investment produces results while continuing to identify efficiencies across the business. Inventory remains a core management priority. We need to improve stock turn and reduce the amount of cash tied up in working capital.

Speaker #1: by a similar amount. Reflecting higher charges and the increase in volumes in our US business. We also faced the employment cost pressures discussed earlier.

Speaker #1: We delivered around £300,000 of cost savings. Our move to a single e-commerce platform across the UK and US websites carries annualized savings of around £200,000.

Speaker #1: We need the right capabilities to deliver the plan, but we're equally conscious of the cost base. The leadership team's focus is on ensuring that the investment produces results.

Speaker #1: While continuing to identify efficiencies across the business, inventory remains a core management priority. We need to improve stock turn and reduce the amount of cash tied up in working capital.

Speaker #1: We reduced excess inventory by 1.8 million in the first half. It's worth distinguishing the clearance of excess stock from movements in the total inventory.

Michael Scheepers: We reduced excess inventory by GBP 1.8 million in the H1. It is worth distinguishing the clearance of excess stock from movement in the total inventory. Finished goods increased principally because we built Spode stock in the US ahead of the key selling season and continued to progress our onshoring manufacturing strategy. There was also an inventory benefit of just over GBP 1 million from the tariff reversal relating to unsold goods. Separately, the inventory position reflects the GBP 3.1 million provision associated with the accounting policies implemented at the end of 2025. We utilized a small amount of that provision during the H1 as we cleared excess inventory, and we expect further utilization in the H2. The objective is to meet demand in our stronger product ranges while reducing legacy stock and improving the efficiency of our working capital. The balance sheet has changed substantially during that H1.

Speaker #1: Finished goods increased, principally because we built spoiled stock in the US ahead of the key selling season, and continue to progress our onshoring manufacturing strategy.

Speaker #1: There was also an inventory benefit of just over £1 million, from the tariff reversal relating to unsold goods. Separately, the inventory position reflects the £3.1 million provision associated with the accounting policies implemented at the end of 2025.

Speaker #1: We utilized a small amount of that provision during the first half as we cleared excess inventory, and we expect further utilization in the second half.

Speaker #1: The objective is to meet demand in our stronger product ranges, while reducing legacy stock and improving the efficiency of our working capital. The balance sheet has changed substantially during the first half.

Speaker #1: Our ambition is to establish a fortress balance sheet. Draw two practical reasons for this: a stretched balance sheet can force poor management decisions, particularly when a business needs time to transform.

Michael Scheepers: Our ambition is to establish a fortress balance sheet. There are two practical reasons for this. A stretched balance sheet can force poor management decisions, particularly when a business needs time to transform. It also carries a significant interest cost. We want to reduce that burden and move towards a net cash position over time. The principal H1 inflow was the GBP 17.2 million of net proceeds from the equity raise. We also received GBP 2.3 million from the US tariff claim, equivalent to approximately $3 million. Working capital absorbed around GBP 2 million, mainly reflecting the seasonal build ahead of the busier H2. Trading losses also affected cash generation. Our new GBP 36 million asset-based lending facility with Bank Leumi supports the business through this period of change. The funding reset is an important step, but the next stage must come from improving the operations of the business.

Speaker #1: It also carries a significant interest cost. We want to reduce that burden and move toward a net cash position over time. The principal first half inflow was the 17.2 million of net proceeds from the equity raise.

Speaker #1: We also received $2.3 million from the US tariff claim, equivalent to approximately $3 million. Working capital absorbed around $2 million, mainly reflecting the seasonal build ahead of the busier second half.

Speaker #1: Trading losses also affected cash generation. Our new 36 million asset-based lending facility with Bank Lumi supports the business through this period of change. The funding reset is an important step, but the next stage must come from improving the operations of the business, better stock turn, lower debt, and improved trading performance are central to making the balance sheet stronger on a sustained basis.

Michael Scheepers: Better stock turn, lower debt, and improved trading performance are central to making the balance sheet stronger on a sustained basis. I will now turn to the commercial initiatives behind those reasonable results. In North America, sales increased by 13.6% at constant currency compared with the 9.7% reported growth shown earlier. Spode's recovery continued, supported by changes to a couple of key commercial relationships at the start of the year. These have had a positive effect on brand positioning and pricing integrity in the United States. We have also undertaken responsible clearance through discount channels. We are pleased with the overall progress while remaining conscious of the importance of the H2 selling season. In the UK, weak consumer demand and promotional activity continue to affect tableware. Wax Lyrical sales were GBP 1.5 million lower year-on-year, primarily because of the order cancellations arising from supply disruption.

Speaker #1: I'll now turn to the commercial initiatives behind those reasonable results. In North America, sales increased by 13.6% at constant currency, compared with a 9.7% reported growth shown earlier.

Speaker #1: Spoiled recovery continued, supported by changes to a couple of key commercial relationships at the start of the year. These have had a positive effect on brand positioning and pricing integrity in the United States.

Speaker #1: We have also undertaken responsible clearance through discount channels. We are pleased with the overall progress, while remaining conscious of the importance of the second-half selling season.

Speaker #1: In the UK, weak consumer demand and promotional activity continue to affect tableware. Wax lyrical sales were 1.5 million lower year on year, primarily because of the order cancellations arising from supply disruption.

Speaker #1: South Korea is in a period of reset. We're expanding our direct distribution model and made progress in the first half. That was not sufficient to offset the impact of tighter credit controls with some distributor partners.

Michael Scheepers: South Korea is in a period of reset. We are expanding our direct distribution model and made progress in the H1. That was not sufficient to offset the impact of tighter credit controls with some distributor partners. We expect the market to remain in transition during the H2, with elevated inventory also continuing to affect trading. Across our international markets, growth has been broad based, including Europe, Asia-Pacific, and the Middle East. We have further opportunities under development and continue to expect sales recovery in the H2 2026. There is a great deal of activity across our brands. We have extensive product ranges, amazing archives, and longstanding partnerships that provide the basis for new collections. The Group opened a new showroom at AmericasMart Atlanta this year, receiving a very positive response from core US customers.

Speaker #1: We expect the market to remain in transition during the second half, with elevated inventory also continuing to affect trading. Across our international markets, growth has been broad-based.

Speaker #1: Including Europe, Asia-Pacific, and the Middle East, we have further opportunities under development and continue to expect sales recovery in the second half of 2026.

Speaker #1: There's a great deal of activity across our brands. We have extensive product ranges, amazing archives, and long-standing partnerships that provide the basis for new collections.

Speaker #1: The group opened a new showroom at Atlanta Mart this year, receiving a very positive response from core U.S. customers. It's an important opportunity to present the brand and its collections to the trade.

Michael Scheepers: It is an important opportunity to present the brand and its collections to the trade. We are celebrating 20 years of collaboration with Sophie Conran and the Portmeirion brand, and we have new products in development for spring and summer 2027, including the new Southrop range. Spode has also collaborated with the digital lifestyle magazine, Glassette. That has increased social media engagement and brought the brand to a younger audience. The commercial opportunity is to turn that interest into future demand. Christmas Tree remains a central collection for Spode in North America. Our new collection features hand-painted designs that draw on the Spode archive and bring a contemporary interpretation to this familiar range. This product activity is part of what supports the encouraging H2 order book. It also demonstrates how we can use the heritage of our brands to develop relevant products for today's customers.

Speaker #1: We are celebrating 20 years of collaboration with Sophie Conran and the Portmeirion brand, and we have new products in development for spring and summer 2027, including the new South Drop range.

Speaker #1: Spoiled has also collaborated with the digital lifestyle magazine Glacette. That has increased social media engagement and brought the brand to a younger audience. The commercial opportunity is to turn that interest into future demand.

Speaker #1: Christmas tree remains a central collection for Spoiled in North America. Our new collection features hand-painted designs that draw on the Spoiled archive and bring a contemporary interpretation to this familiar range.

Speaker #1: This product activity is part of what supports the encouraging second-half order book. It also demonstrates how we can use the heritage of our brands to develop relevant products for today's customers.

Speaker #1: Let me now turn to Portmeirion Elevated, the strategic framework we presented at the time of the equity raise. Our purpose remains to create timeless ceramics and homewares that resonate globally—reimagining tradition with creativity and crafting products that inspire.

Michael Scheepers: Let me now turn to Portmeirion: Elevated, the strategic framework we presented at the time of the equity raise. Our purpose remains to create timeless ceramics and homewares that resonate globally, reimagining tradition with creativity and crafting products that inspire. Our vision is to build towards GBP 300 million of global brand sales at retail value. To be clear, that is an ambition for the retail value of sales under our brands rather than a Group revenue target. The strategy has three pillars: driving higher returns, focused expansion, and excellence everywhere. These are supported by our ambition for a fortress balance sheet and by the people, culture, and data needed to execute effectively. The framework brings together the work I have described today. Improving inventory and product margins support higher returns. Licensing and distribution partnerships provide routes for expansion. Factory performance and simpler systems support operational excellence.

Speaker #1: Our vision is to build toward 300 million of global brand sales at retail value. To be clear, that's an ambition for the retail value of sales under our brands, rather than a group revenue target.

Speaker #1: The strategy has three pillars: driving higher returns, focused expansion, and excellence everywhere. These are supported by our ambition for a fortress balance sheet and by the people, culture, and data needed to execute effectively.

Speaker #1: The framework brings together the work I have described today. Improving inventory and product margins supports higher returns. Licensing and distribution partnerships provide routes for expansion.

Speaker #1: Factory performance and simpler systems support operational excellence. We set out 12 operational KPIs for 2026 so that investors could assess our progress against specific milestones.

Michael Scheepers: We set out 12 operational KPIs for 2026 so that investors could assess our progress against specific milestones. Five have already been achieved: strengthening the balance sheet, receiving the US tariff refund, entering China through social selling, hiring and embedding the leadership team, and moving to a single e-commerce platform for the UK and US. The remaining KPIs are progressing, and we remain on track to deliver our 2026 milestones. That includes the preparatory work for the Royal Worcester relaunch in H1 2027. These measures help us maintain focus and make our progress visible. Ultimately, though, delivery must translate into better profitability, cash generation, and returns. Completing the operational milestones is an important step towards that outcome. Looking ahead, we have a clear set of actions under each of our three pillars.

Speaker #1: Five have already been achieved: strengthening the balance sheet, receiving the U.S. tariff refund, entering China through social selling, hiring and embedding the leadership team, and moving to a single e-commerce platform for the U.K. and U.S.

Speaker #1: The remaining KPIs are progressing, and we remain on track to deliver our 2026 milestones. That includes the preparatory work for the Royal Worcester relaunch in the first half of 2027.

Speaker #1: These measures help us maintain focus and make our progress visible. Ultimately, though, delivery must translate into better profitability, cash generation, and returns. Completing the operational milestones is an important step toward that outcome.

Speaker #1: Looking ahead, we have a clear set of actions under each of our three pillars. Under driving higher returns, priority. We're just over 2 million still to deliver against our full-year target.

Michael Scheepers: Under driving higher returns, excess inventory clearance remains a priority, with just over 2 million still to deliver against our full year target. To support this, we have secured three pop-up locations in premium outlet centers with low capital expenditure requirements and turnover-only rents. We are considering similar retail opportunities ahead of Christmas and the new year. We are also working on pricing architecture, range planning, and new product development with a focus of bringing through products at higher gross margins. At Wax Lyrical, Getting Match Fit includes reducing range complexity, prioritizing national retail sales opportunities, and expanding into selected categories, including in-car fragrance. We are also reviewing contracts and sourcing arrangements to identify savings and in the final stages of implementing a significant SKU rationalization. Under focused expansion, our priority is to convert the licensing pipeline into signed agreements.

Speaker #1: To support this, we have secured free pop-up locations in premium outlet centers, with low capital expenditure requirements and turnover-only rents. We are considering similar retail opportunities ahead of Christmas and the New Year.

Speaker #1: We're also working on pricing architecture, range planning, and new product development, with a focus on bringing through products at higher gross margins. At Wax Lyrical, getting match-fit includes reducing range complexity, prioritizing national retail sales opportunities, and expanding into selected categories, including in-car fragrance.

Speaker #1: We're also reviewing contracts and sourcing arrangements to identify savings, and are in the final stages of implementing a significant SKU rationalization. Under focused expansion, our priority is to convert the licensing pipeline into signed agreements.

Speaker #1: Licensing is particularly attractive because of its high margins and strong return on capital employed. We are building on the work in the first half to secure further deals.

Michael Scheepers: Licensing is particularly attractive because of its high margins and strong return on capital employed. We are building on the work in H1 to secure further deals. We are also seeking new distribution partners in South America and Europe, alongside preparing for the Royal Worcester relaunch in H1 2027. Under excellence everywhere, we will continue to onshore production through Made In Stoke-on-Trent and improve the operational performance of the factory. We have seen progress in H1 and need to sustain that momentum. We are also implementing a number of pilot AI projects to explore operational efficiencies. These sit alongside the practical work on systems and processes that support the wider transformation. Royal Worcester deserves particular attention. It is a brand with remarkable heritage, established in 1751, and we have not made enough of its potential within the group.

Speaker #1: We're also seeking new distribution partners in South America and Europe, alongside preparing for the Royal Worcester relaunch in the first half of 2027. Under Excellence Everywhere, we will continue to onshore production through Made in Stoke-on-Trent and improve the operational performance of the factory.

Speaker #1: We have seen progress in the first half and need to sustain that momentum. We're also implementing a number of pilot AI projects to explore operational efficiencies.

Speaker #1: These sit alongside the practical work on systems and processes that support the wider transformation. Royal Worcester deserves particular attention. It's a brand with remarkable heritage, established in 1751, and we have not made enough of its potential within the group.

Speaker #1: During the first half, the teams completed market research and a full market mapping exercise. Our design and buying teams have also reviewed the extensive archives, identifying opportunities to develop products with commercial relevance today.

Michael Scheepers: During H1, the teams completed market research and a full market mapping exercise. Our design and buying teams have also reviewed the extensive archives, identifying opportunities to develop products with commercial relevance today. The first patterns have been designed, prints are in development, and the Made In Stoke manufacturing strategy is in place. We remain on track for launch in H1 2027. There is substantial preparation behind that timetable, and the focus now is on bringing the product positioning and manufacturing plans together for launch. To conclude, H2 trading is in line with expectations. We announced earlier this week that Jonathan Hill, our CFO, has taken a decision to step back from the business due to health reasons. We have appointed Adrian Wilding as interim CFO, bringing a wealth of public market experience. We all wish John a speedy recovery and welcome Adrian.

Speaker #1: The first patterns have been designed, prints are in development, and the Made in Stoke manufacturing strategy is in place. We remain on track for launch in the first half of 2027.

Speaker #1: There is substantial preparation behind that timetable, and the focus now is on bringing the product positioning and manufacturing plans together for launch. To conclude, second-half trading is in line with expectations.

Speaker #1: We announced earlier this week that John Hill, our CFO, has decided to step back from the business due to health reasons. We have appointed Adrian Wilding as interim CFO, who brings a wealth of public market experience.

Speaker #1: We all wish John a speedy recovery and welcome Adrian. In the US, demand for the iconic Spode Christmas Tree collection is encouraging, and our direct Amazon model continues to progress.

Michael Scheepers: In the US, demand for the iconic Spode Christmas Tree collection is encouraging, and our direct Amazon model continues to progress. Our energy costs are hedged until April 2027, providing visibility over that part of the cost base. However, we remain realistic about the challenges. The UK consumer environment is difficult. South Korea remains in transition, with the ongoing effects of tighter credit controls and elevated market inventory. We have also more work to do to improve the group's profitability. The leadership team is focused on executing Portmeirion: Elevated and delivering all 12 of our operational milestones for 2026. The financial reset gives us a stronger foundation, and we now need to demonstrate sustained operational improvement. We are awaiting further details of potential UK government support for the ceramics industry. Depending on its scope and timing, that could provide upside in the H2 and into 2027.

Speaker #1: Our energy costs are hedged until April 2027, providing visibility over that part of the cost base. However, we remain realistic about the challenges. The UK consumer environment is difficult.

Speaker #1: South Korea remains in transition, with the ongoing effects of tighter credit controls and elevated market inventory. We also have more work to do to improve the group's profitability.

Speaker #1: The leadership team is focused on executing Portmeirion Elevated and delivering all 12 of our operational milestones for 2026. The financial reset gives us a stronger foundation, and we now need to demonstrate sustained operational improvement.

Speaker #1: We are awaiting further details of potential UK government support for the ceramics industry. Depending on its scope and timing, that could provide upside in the second half and into 2027.

Speaker #1: At this stage, it remains a potential opportunity rather than a confirmed benefit. We remain in active dialogue with policymakers as a leading voice for the UK ceramics sector.

Michael Scheepers: At this stage, it remains a potential opportunity rather than a confirmed benefit. We remain in active dialogue with policymakers as a leading voice for the UK ceramics sector. I joined Portmeirion because I believe in the strength of its brands and the opportunity to improve its performance. The H1 has reinforced that conviction while also making clear the work still required. We have the leadership team in place, a clearer financial foundation, and a defined plan. Our focus is on delivery and returning the group to sustainable profit growth. Thank you for your time today and for your continued interest in the Portmeirion Group. I look forward to meeting many of you during the upcoming roadshow.

Speaker #1: I joined Portmeirion because I believe in the strength of its brands and the opportunity to improve its performance. The first half has reinforced that conviction, while also making clear the work still required.

Speaker #1: We have the leadership team in place, a clearer financial foundation, and a defined plan. Our focus is on delivery and returning the Group to sustainable profit growth.

Speaker #1: Thank you for your time today, and for your continued interest in the Portmeirion Group. I look forward to meeting many of you during the upcoming roadshow.

Speaker #1: We have just played out the prerecorded results presentation and will now be moving to a live Q&A session. Just as a reminder, if you would like to ask a question, please type it into the Q&A box situated on the right-hand side of your screen.

[Company Representative] (Portmeirion Group): We have just played out the pre-recorded results presentation, and we will now be moving to a live Q&A session. Just as a reminder, if you would like to ask a question, please type them into the Q&A box situated on the right-hand side of your screen. I will now hand over to Phil, who will be reading out the questions today.

Operator: We have just played out the pre-recorded results presentation, and we will now be moving to a live Q&A session. Just as a reminder, if you would like to ask a question, please type them into the Q&A box situated on the right-hand side of your screen. I will now hand over to Phil, who will be reading out the questions today.

Speaker #1: I'll now hand over to Phil, who will be reading out the questions today.

Speaker #2: Great. Thanks, Evie. So Michael, first question in is about the UK market. The question is, in your interim update, you indicated that the UK market is very challenging and consumers are waiting for discount and promotions.

[Company Representative] (Portmeirion Group): Great. Thanks, Evie. Michael, first question in is about the UK market. The question is, in your interim update, you indicated that the UK market is very challenging, and consumers are waiting for discount and promotions. At the same time, you talk about other players leaving the market. How do you see the opportunities for Portmeirion Group in the UK? How do you think about gaining market share? Thank you.

Speaker #2: At the same time, you talk about other players leaving the market. How do you see the opportunities for Portmeirion Group in the UK, and how do you think about gaining market share?

Speaker #2: Thank you.

Speaker #3: So UK without a doubt is a challenging market, but there is still opportunity for us to grow. There's been some high-profile administrations, Denby being notable in that, and of course that's caused some disruption in the market with heavy discounting and the selling out of stock.

Michael Scheepers: UK, without a doubt, is a challenging market, but there is still opportunity for us to grow. There have been some high-profile administrations, Denby being notable in that, and of course, that has caused some disruption in the market with heavy discounting and the selling out of stock. Where we believe there is opportunity is by engaging with our major customers, large UK retailers, and develop towards developing ranges that really appeal to the core consumer in the UK. As we feel that the disruption of the Denby sellout of stock, other matters in the market will be of a, let us say, shorter time until the end of this year. We feel that this disruption has a chance to abate by 2027, and we are setting the foundations for growth, developing that through new ranges, looking at opportunities with our key retailers.

Speaker #3: Where we believe there is opportunity is by engaging with our major customers, large UK retailers, and developing ranges that really appeal to the core consumer in the UK.

Speaker #3: As we feel that the disruption of the Denby sell-out of stock, other matters in the market will be of a, let's say, shorter time until the end of this year. We feel that this disruption has a chance to abate by 2027, and we're setting the foundations for growth, developing that through new ranges, and looking at opportunities with our key retailers.

Speaker #3: So, while it is challenging and consumer confidence remains a lookout for us in the UK, we also feel that by being close to our customers, listening to our consumers, and focusing on product development, there's some real opportunity for us to grow in our channels.

Michael Scheepers: While it is challenging and consumer confidence remains a lookout for us in the UK, we also feel that by being close to our customers, listening to our consumers, and focusing on product development, there is some real good opportunity for us to grow in our channels.

[Company Representative] (Portmeirion Group): A follow-up question on that, Michael, is that you obviously already work with a number of high-profile, high-quality retailers in the UK market. So where are the gaps for you in terms of getting more market share?

Speaker #2: Follow-up question on that, Michael, is that you obviously already work with a number of high-profile, high-quality retailers in the UK market. So where are the gaps for you in terms of getting more market share?

Speaker #3: Well, I think our D2C can be strengthened. As we mentioned in our interim report as well, we have now started looking at developing a retail in premium outlets.

Michael Scheepers: Well, I think our D2C can be strengthened. As we mentioned in our interim report as well, we have now started looking at developing a retail in premium outlets. I think that is something that we can look at and a channel to develop. There is more to do on our e-commerce side, but there is still, I think, as brands move out of the market, if we are nimble and have a view to be opportunistic and are able to scale very quickly, these exits give us opportunity to grow in what would otherwise be quite a busy market.

Speaker #3: I think that's something that we can look at as a channel to develop. There's more to do on our e-commerce side. But there is still, I think, as brands move out of the market, if we are nimble and have a view to be opportunistic and are able to scale very quickly, these exits give us an opportunity to grow in what would otherwise be quite a busy market.

Speaker #2: Great. The next question is about your management team, your leadership team. Could you just talk about some of the key new appointments that you've made in the last few months and what skills or expertise these new appointments bring to the business?

[Company Representative] (Portmeirion Group): Great. The next question is about your management team, your leadership team. Could you just talk about some of the key new appointments that you've made in the last few months and what skills or expertise that these new appointments bring to the business?

Speaker #3: Well, look, success starts with having the right people around the table. We've brought in some key hires. We were able to secure Heidi Baddeley as our group marketing director, Jay Mason as our new UK and Europe director.

Michael Scheepers: Well, look, success starts with having the right people around the table. We've brought in some key hires. We were able to secure Hayley Baddiley as our Group Marketing Director, Jane Mason as our new UK and Europe Director. They come across from Denby, so have a wealth of knowledge about the Potteries, the sector, and know customers very well and the consumers out there. We've also been able to restructure the business, right? So coming in as CEO, the first thing I did was also make sure that when you have a senior leadership team, they're empowered to make decisions. Otherwise, why have a senior leadership team? So by making sure that people know clearly what their targets are, what's expected from them, and then empowering them and holding them accountable to those roles, that's where real success starts. It's not something that you can do by yourself.

Speaker #3: They come across from Denby, so I have a wealth of knowledge about the potteries, the sector, and I know customers very, very well, and the consumers out there.

Speaker #3: We've also been able to restructure the business, right? So, coming in as CEO, the first thing I did was make sure that, when you have a senior leadership team, they're empowered to make decisions.

Speaker #3: Otherwise, why have a senior leadership team? So, by making sure that people know clearly what their targets are, what's expected from them, and then empowering them and holding them accountable to those roles — that's where real success starts.

Speaker #3: It's not something that you can do by yourself. Transformation is not something that you can do single-handedly within a business. You need a team, and by bringing new people in and empowering people who are already part of the business, I think we've got the right people around the table to accelerate.

Michael Scheepers: Transformation is not something that you can do single-handedly within a business. You need a team, and by bringing new people in and empowering people who are already part of the business, I think we've got the right people around the table to accelerate.

Speaker #2: Great. The next question is about South Korea, one of your key markets. At the half-year, you talked about sales being down 15–16 percent, and I think there were two issues that you called out.

[Company Representative] (Portmeirion Group): Great. The next question's about South Korea, one of your key markets. At the H1, you talked about sales being down 15% to 16%, and I think there were two issues that you called out. One was that there's quite a lot of inventory sitting in the channels in the market, and then also you actively introduce new strict credit controls. It's been a choppy market, South Korea, for a while. How do you think about resolving some of these issues and getting the South Korea market onto a more positive footing?

Speaker #2: One was that there's quite a lot of inventory sitting in the channels in the market, and then also you actively introduced new strict credit controls.

Speaker #2: It's been a choppy market, South Korea, for a while. How do you think about resolving some of these issues and getting the South Korean market onto a more positive footing?

Speaker #3: Look, the Korean market is definitely a market that needs resetting. We've started by making sure that the partnerships we have are based on mutual respect and an understanding of what we can expect from each other.

Michael Scheepers: Look, the Korean market is definitely a market that needs resetting. We started by making sure that the partnerships that we have are based on mutual respect and understanding of what we can expect from each other. Part of that is having good credit control processes in place and reducing our credit risk, and that's what we've done by taking these actions in Korea. That's the start of a reset. There's more to be done. We can engage with other partners. We can look at strengthening our ties with existing distributors. We can make sure that we get closer to our consumers in Korea as well, so that we're actually designing, developing ranges that doesn't just base the company strategy on one particular brand, but develop for the consumer in Korea. So there is absolutely some opportunity in Korea to reset that. This is just the start of it.

Speaker #3: And part of that is having good credit control processes in place, and reducing our credit risk. And that's what we've done by taking these actions in Korea.

Speaker #3: That's the start of a reset. There's more to be done. We can engage with other partners. We can look at strengthening our ties with existing distributors.

Speaker #3: We can make sure that we get closer to our consumers in Korea as well, so that we're actually designing, developing ranges that doesn't just base the company strategy on one particular brand, but develop for the consumer in Korea.

Speaker #3: So, there is absolutely some opportunity in Korea to reset that. This is just the start of this. For sure, inventory overhang and historic decisions in that particular market will have led to the situation that we're in now, but we're actively resetting that.

Michael Scheepers: For sure, inventory overhang and historic decisions in that particular market has led to the situation that we're in now, but we're actively resetting that.

Speaker #2: Great, thanks, Michael. And sticking to the Asian region, have you got any plans for the Japanese market? And then, more broadly, how do you think about identifying new growth markets for Portmeirion?

[Company Representative] (Portmeirion Group): Great. Thanks, Michael. Sticking to the Asian region, have you got any plans for the Japanese market? More broadly, how do you think about identifying new growth markets for Portmeirion Group? I think within your strategic framework, you've got expansion into some new territories as one of your objectives.

Speaker #2: I think within your strategic framework, you've got expansion into some new territories as one of your objectives. So, what…

Michael Scheepers: Yeah, absolutely. I think part of when we went to the market for the equity raise was very clearly stating that we need to focus on new market development. It's also one of the key core KPIs that we have as part of our full year plans. Expanding into new territories is critical for the business, because we want to move away from a business that just rests on three pillars, UK, US, and Korea. We need to diversify. We need to go into different markets. We're actively pursuing that. As I mentioned before, having the right people in power to do that is key to be able to be successful in developing those markets. So that's what we're doing. We're looking at China, developing social selling in China, and looking how we can accelerate our entry into that market.

Speaker #3: Yeah, absolutely. I think part of when we went to the market for the equity raise was very clearly stating that we need to focus on new market development.

Speaker #3: It's also one of the key core KPIs that we have as part of our full-year plans. Expanding into new territories is critical for the business, because we want to move away from a business that just rests on three pillars.

Speaker #3: UK, US, and Korea. We need to diversify. We need to go into different markets. We're actively pursuing that. As I mentioned before, having the right people empowered to do that is key to be able to be successful in developing those markets.

Speaker #3: So that's what we're doing. We're looking at China, developing social selling in China, and looking at how we can accelerate our entry into that market.

Speaker #3: If we look at Malaysia, we have a great distributor there doing lots of work for us. It really has a growth market, and we see lots of potential there.

Michael Scheepers: If we look at Malaysia, we have a great distributor there doing lots of work for us and is really a growth market, and we see lots of potential there. We are also looking at re-engaging with distributors and new partners in Australia. To the key question about Japan, there it is all about range. If we have the right range, we have the right product, that will allow us to accelerate growth in Japan. For now, Japan is a market that we have not focused on a lot. I believe that there is quite a bit of potential in Japan, but we need to have the right products and the right designs to do that. There is a process to it. We are working on that process, but I think Japan is something that I would look for as a growth driver in the years to come.

Speaker #3: We're also looking at re-engaging with distributors and new partners in Australia. And then to the key question about Japan, there, it's all about range.

Speaker #3: If we have the right range, we have the right product. That will allow us to accelerate growth in Japan. For now, Japan is a market that we haven't focused on a lot.

Speaker #3: I believe that there's quite a bit of potential in Japan. But we need to have the right products and the right designs to do that.

Speaker #3: So there's a process to it. We're working on that process, but I think Japan is something that I would look for as a growth driver in the years to come.

Speaker #3: Much like what we're doing also, if I can add, in South America, which was very much a blank canvas for the group, and something that now we're also actively pursuing.

Michael Scheepers: Much like what we are doing also, if I can add, in South America, which was a very much a blank canvas for the group, and something that now we are also actively pursuing, something that I believe there is definitely depth to that market for us to grow. Again, it is about designs and brands and getting that right. But we have quite a strong stable of designs that can already go into the South American market. We think it will resonate well with the consumers there. So that is something that we are actively pursuing.

Speaker #3: Something that I believe is that there is definitely depth to that market for us to grow. Again, it's about designs and brands, and getting that right.

Speaker #3: But we have quite a strong stable of designs that can already go into the South American market. We think it will resonate well with the consumers there.

Speaker #3: So that's something that we're actively pursuing.

Speaker #2: Great. And maybe sticking on the theme of growth, US market is seeing good success in the first half. How much opportunity do you think there is for the US market?

[Company Representative] (Portmeirion Group): Great, and maybe sticking on the theme of growth. The US market has seen good success in the H1. How much opportunity do you think there is for the US market? Can that become really your biggest growth engine for the group, the US?

Speaker #2: And can that become really your biggest growth engine for the group, the US?

Speaker #3: Well, look, I think in the US—we started this Q&A with the UK—and there you see consumer confidence being a challenge, et cetera. What we're seeing in the US is a reset of that market.

Michael Scheepers: Well, look, I think US, we started this Q&A with the UK, and there you see consumer confidence being a challenge, et cetera. What we are seeing in the US is a reset of that market. Consumer confidence, despite the turbulence that might exist internally in the US currently, there is definitely consumer confidence going into the Q4 period. Customers are engaged with us. We have reset certain very important relationships with key partners in the US. So we make sure that partnerships are based on a mutual understanding, again, of what we can expect from each other, rather than a very one-sided relationship. We have now worked very closely with those partners to reset those relationships. They are much more engaged. We are seeing a lot more engagement, both from customers and consumers.

Speaker #3: Consumer confidence, despite the turbulence that might exist internally in the US currently, is definitely present going into the Q4 period. Customers are engaged with us.

Speaker #3: We have reset certain very important relationships with key partners in the US. So we make sure that partnerships are based on mutual understanding, again, of what we can expect from each other rather than a very one-sided relationship.

Speaker #3: We've now worked very closely with those partners to reset those relationships. They're much more engaged. We're seeing a lot more engagement, both from customers and consumers.

Speaker #3: Yes, that leads very much into the 'Christmas Tree' design, which is, of course, the iconic design that is so incredibly successful and popular in the United States.

Michael Scheepers: Yes, that leads very much into the Spode Christmas Tree design, which is, of course, the iconic design, which is so incredibly successful and popular in the United States, but it goes wider than that. The team, again, being properly empowered, having all that ability across all the channels now in the US and in Canada, are firing on all cylinders and are engaging with customers, looking at new range development, seeing where there is potential to grow in the different states in the US. I see the US as a very strong growth driver for the company going forward.

Speaker #3: But it goes wider than that. And the team, again, being properly empowered, having all that ability across all the channels now in the US and in Canada, are firing on all cylinders.

Speaker #3: And are engaging with customers, looking at new range development, seeing where there is potential to grow in the different states in the US. So I see the US as a very strong growth driver for the company going forward.

Speaker #2: And thank you. Related question to that is this question highlights that the US was strong performance in the first half, and you talked in your statement about the order book for spoke Christmas tree being strong.

[Company Representative] (Portmeirion Group): Thank you. Related question to that is that this question highlights that the US was strong performance in H1, and you talked in your statement about the order book for Spode Christmas Tree being strong and obviously what is coming up to a critical period for selling out on Christmas Tree. Does the strategic plan, the Portmeirion: Elevated strategy, have measures to ensure that the group is not becoming overly dependent on either one specific region or on Christmas related seasonal sales?

Speaker #2: And obviously, we're coming up to a critical period for selling out on Christmas trees. Does the strategic plan—that elevated strategy—have measures to ensure that the group is not becoming overly dependent on either one specific region or on Christmas-related seasonal sales?

Speaker #3: Yeah, I think that's a very valid question. I think it leads into the answer I gave a little bit about Korea as well. Is that the whole drive to go into new markets and new regions is to make sure that we don't become too dependent on a certain area.

Michael Scheepers: Yeah, I think that is a very valid question. I think it leads into the answer I gave a little bit about Korea as well, is that the whole drive to go into new markets and new regions is to make sure that we do not become too dependent on a certain area and that we can offset growth and challenges in one particular market with growth in another. That is definitely key to the strategy. It also comes to new product launches, product design. If we continue to develop for our customers and consumers, that means that you start to widen, and particularly with new product launches, you start to widen the addressable audience. There is definitely an audience out there that we currently do not speak to with our designs and our products.

Speaker #3: And that we can offset growth and challenges in one particular market with growth in another. So that's definitely key to the strategy. It also comes to new product launches, product design.

Speaker #3: If we continue to develop for our customers and consumers, that means you start to widen—and particularly with new product launches—you start to widen the addressable audience.

Speaker #3: There's definitely an audience out there that we currently don't speak to with our designs and our products. We're working at pace to make sure that we extend our ranges and extend our designs to start addressing that audience.

Michael Scheepers: We are working at pace to make sure that we extend our ranges and extend our designs to start addressing that audience. Again, that mitigates too much reliance on one particular design or one particular region.

Speaker #3: So again, that mitigates too much reliance on one particular design or one particular region.

Speaker #2: Turning back to the broader elevated strategy and the strategy house, one of the pillars is to drive higher returns. Could you just maybe explore with us a bit more what that means in practice?

[Company Representative] (Portmeirion Group): Turning back to the broader Portmeirion: Elevated strategy and the strategy house, one of the pillars is the drive higher returns. Could you just maybe explore with us a bit more what that means in practice? What are the initiatives that you and the team are focused on to drive higher returns?

Speaker #2: What are the initiatives that you and the team are focused on to drive higher returns?

Speaker #3: So look, it's factory efficiency. I think that's absolutely key. A company like ours, with our factory in Stoke-on-Trent and our strategy of onshoring, is key to make sure that the factory is running efficiently and effectively. We're making great strides with that under the new leadership of our COO, Sam Pierce, who, with her team, are doing a fantastic job in making sure that the factory is future-fit and working in as efficient and effective a manner as possible.

Michael Scheepers: So look, it's factory efficiency. I think that's absolutely key. A company like ours, with our factory in Stoke-on-Trent, our strategy of onshoring is key to make sure that the factory is running efficiently and effectively, and we're making great strides with that under the new leadership of our COO, Sam Pearce, who, with her team, are doing a fantastic job in making sure that the factory is future fit and working in as an efficient and effective manner as possible. Then it's looking at how do we do new product ranges that are positioning themselves more into that premium space. We have real premium heritage brands. We can do a lot more with that. There is more scope for growth inside those brands. It comes down to having a good pricing strategy.

Speaker #3: Then it's looking at how do we develop new product ranges that are positioned more into that premium space. We have real premium heritage brands.

Speaker #3: We can do a lot more with that. There is more scope for growth inside those brands. It comes down to having a good pricing strategy.

Speaker #3: It comes down to having the structure in place and an understanding of where our premium brands fit into the consumer's desirability, what we want to see in the market, and how we can achieve that with design.

Michael Scheepers: It comes down to having the structure in place and an understanding of where our premium brands fit into the consumer's desirability, what we want to see in the market, and how we can achieve that with design. So it all ladders up into each other in that sense, where I believe firmly in having an efficient and effective factory running well, keeping, and obviously also from a cost point of view, being as efficient as possible, but then making sure that on the other side, we position our premium brands properly. We don't continue the strategy that's been in the past of a lot of discounting. We don't lean into that. We make sure that we underpin our premium brands with the right price positioning and also the right strategies around promotions, discounting, et cetera. It's a reset, and that's what the team is working on.

Speaker #3: So it all ladders up into each other, in that sense, where I firmly believe in having an efficient and effective factory running well, and obviously, also from a cost point of view, being as efficient as possible.

Speaker #3: But then making sure that on the other side, we position our premium brands properly. We don't continue the strategy that's been in the past of a lot of discounting.

Speaker #3: We don't lean into that. We make sure that we underpin our premium brands with the right price positioning and also the right strategies around promotions, discounting, et cetera.

Speaker #3: It's a reset, and that's what the team is working on.

Speaker #2: And I think the other half of driving higher returns is around balance sheet efficiency. So, can you just talk about what you're doing on the balance sheet side in terms of your inventory management?

[Company Representative] (Portmeirion Group): I think the other half of the driving higher returns is around balance sheet efficiency. Can you just talk about what you're doing on the balance sheet side in terms of your inventory management?

Speaker #3: Well, look, inventory has been a huge focus for us this year, and we've communicated that we're looking to clear £4 million of inventory. The team is focused on that.

Michael Scheepers: Well, look, inventory has been a huge focus for us this year, and we've communicated that we're looking to clear GBP 4 million of inventory. The team is focused on that, just as they are focused on developing new ranges, developing new markets, all the BAU and all the new strategy that we're bringing in. Inventory is a key theme of that. We have too much inventory. We sold through GBP 1.8 million in the H1 of this year. We're well on track to hit that GBP 4 million target by the end of this year. That's our commitment. It's one of our KPIs, and it's absolutely essential to set the foundation right for future growth in 2027 and beyond.

Speaker #3: Just as they are focused on developing new ranges, developing new markets, all the BAU, and all the new strategy that we're bringing in, inventory is a key theme of that.

Speaker #3: We have too much inventory. We sold through $1.8 million in the first half of this year. We're well on track to hit that $4 million target by the end of this year.

Speaker #3: That's our commitment. It's one of our KPIs, and it's absolutely essential to set the foundation right for future growth in 2027 and beyond.

Speaker #2: Perfect, thank you. The next question is about Wax Lyrical. You've identified the brand as non-core, and I think in the first half your sales were down double-digit.

[Company Representative] (Portmeirion Group): Perfect. Thank you. The next question is about Wax Lyrical. You've identified the brand as non-core, and I think in the H1, your sales were down double digit. Have you initiated a sales process already? How should we think about the divestment of this business and what sort of timetable are you working towards?

Speaker #2: So, have you initiated a sales process already? How should we think about the divestment of this business, and what sort of timetable are you working towards?

Speaker #3: So wax lyrical is non-core. We haven't initiated the sales process, mainly because we want to get the company match fit. The team at wax lyrical is doing a huge amount of work, making sure that they've got the processes right.

Michael Scheepers: Wax Lyrical is non-core. We haven't initiated the sales process mainly because we want to get the company match fit. The team at Wax Lyrical is doing a huge amount of work making sure that they get the processes right. They're looking at reducing their inventory, making sure that they're chasing down every sales opportunity out there. But we want to get the company to a level that we also feel comfortable as a board to make sure that we can command the best possible price and can negotiate from a position of strength. That's why Getting Match Fit is absolutely essential before we initiate any type of sales process. Now, if we look at Wax Lyrical in the H1, a lot of that downturn was because of a supplier issue.

Speaker #3: They're looking at reducing their inventory, making sure that they're chasing down every sales opportunity out there. But we want to get the company to a level where we also feel comfortable as a board, to make sure that we can command the best possible price and can negotiate from a position of strength.

Speaker #3: That's why getting match fit is absolutely essential before we initiate any type of sales process. Now, if we look at wax lyrical in the first half, a lot of that downturn was because of a supplier issue.

Speaker #3: Single supplier, a critical component, wasn't able to deliver, and therefore had an impact on the commercial achievement in the first half. That's been addressed at pace.

Michael Scheepers: A single supplier, a critical component, wasn't able to deliver and therefore had an impact on the commercial achievement in the H1. That's been addressed at pace. We now have two suppliers. We have that resilience in the supply chain. That's what we're working towards. These are exactly the sorts of things that we're sorting at pace, making sure that we cannot have those similar problems happen again, but it did impact the H1 results.

Speaker #3: We now have two suppliers. We have that resilience in the supply chain; that's what we're working towards. These are exactly the sort of things that we're sorting out at pace, making sure that we cannot have those similar problems happen again.

Speaker #3: But it did impact the first-half results.

Speaker #2: Thank you. The next question is, do you expect any material write downs on goodwill or other balance sheet items during the course of the year?

[Company Representative] (Portmeirion Group): Thank you. The next question is, do you expect any material write-downs on goodwill or other balance sheet items during the course of the year?

Speaker #3: It's difficult to say at the first half. These are, of course, the interim reports. That's something that we would be looking at and communicating around for our full year.

Michael Scheepers: It's difficult to say at the H1. These are, of course, the interim reports. That is something that we would be looking at and communicating around for our full year.

Speaker #2: Great, thanks. And then turning to the performance of the first half, operating losses or pre-tax losses were around £4.5 million for the first half.

[Company Representative] (Portmeirion Group): Great. Thanks. Turning to the performance of the H1, operating losses or pre-tax losses were around GBP 4.5 million for the H1. I think in your statement, you called out some startup costs and investment costs and potential impact from moving to a demand-led production model. How should investors think about the profit outlook for the H2 of the year and beyond?

Speaker #2: And I think in your statement, you mentioned some startup costs, some investment costs, and the potential impact from moving to a demand-led production model.

Speaker #2: How should we think about or how should investors think about the profit outlook for the second half of the year and beyond?

Speaker #3: Look, we're working towards our expectations and what we've communicated to the market. We're also in a transformation year. 2026 is a year of transformation.

Michael Scheepers: Look, we are working towards our expectations and what we have communicated to the market. We are also in a transformation year. 2026 is a year of transformation. We are fixing a lot of the foundations. We are dealing with legacy issues. For me, it is key to get the right people in place, which we now have. We can now execute at pace against all the plans and the KPIs that we have. I would say to shareholders is, hold us accountable to those 12 KPIs that we have communicated as part of the presentation, as part of our full-year expectations. That is what we are working towards. We feel that we are able to deliver on those 12 KPIs. Five of them are already achieved. We have got seven more outstanding. We are working at pace, and I have got good confidence that we will achieve all 12 of them.

Speaker #3: We're fixing a lot of the foundations. We're dealing with legacy issues. For me, it's key to get the right people in place, which we now have.

Speaker #3: We can now execute at pace against all the plans and the KPIs that we have. And I would say to shareholders is, hold us accountable to those 12 KPIs that we've communicated as part of the presentation, as part of our full year expectations.

Speaker #3: That's what we're working towards. We feel that we are able to deliver on those 12 KPIs. Five of them are already achieved, and we've got seven more outstanding.

Speaker #3: We're working at pace, and I've got good confidence that we will achieve all 12 of them.

Speaker #2: Great, you've actually answered the next question, so I'll move on. Could you talk about the role Worcester plays as an opportunity—a brand with huge amounts of heritage?

[Company Representative] (Portmeirion Group): Great. You have actually answered the next question, so I will move.

Michael Scheepers: Perfect

[Company Representative] (Portmeirion Group): I will move on. Could you talk about the Royal Worcester opportunity? A brand with huge amounts of heritage. What role can the brand play in the future success of the group?

Speaker #2: What role can the brand play in the future success of the group?

Speaker #3: Well, ironically, it's our oldest brand, has the most heritage, and it's probably the brand that we've done the least with as a company. The team and I are focused on relaunching that in the first half of next year.

Michael Scheepers: Well, ironically, it is our oldest brand, has the most heritage, and it is probably the brand that we have done the least with as a company. The team and I are focused on relaunching that in the H1 of next year. We are looking at a UK-made fine bone china proposal for Royal Worcester. We are incredibly excited about that. I think it will get us into a market and into a sector that we really have not touched in any meaningful way, and I think that is what Royal Worcester adds. Portmeirion, Spode, and then having Royal Worcester as that third core brand, I think makes the company incredibly resilient. It allows us to enter into new conversations with new customers and a different consumer, and it is about growing that audience that I mentioned about before. So all of it ladders into the strategy for growth for 2027.

Speaker #3: We're looking at a UK-made fine bone china proposal for Royal Worcester. We're incredibly excited about that. I think it will get us into a market and into a sector that we really haven't touched in any meaningful way and I think that's what Royal Worcester adds.

Speaker #3: Portmeirion, Spode, and then having Royal Worcester as that third core brand, I think makes the company incredibly resilient. It allows us to enter into new conversations with new customers and a different consumer and it's about growing that audience that I mentioned about before.

Speaker #3: So I think all of it ladders into the strategy for growth for 2027. So Royal Worcester, for me, that launch in the first half is absolutely key.

Michael Scheepers: Royal Worcester, for me, that launch in the H1 is absolutely key, and I am incredibly excited about it.

Speaker #3: And I'm incredibly excited about it.

Speaker #2: Great. Well, Michael, we've whizzed through a lot of the questions. This is the final question we've had submitted, unless we have any last-minute additions.

[Company Representative] (Portmeirion Group): Well, Michael, we have whizzed through a lot of the questions, and this is the final question we have had submitted, unless we have any last-minute additions. But what gives you confidence that Portmeirion can return to growth in 2027, and what is the longer-term outlook for the group?

Speaker #2: But what gives you confidence that Portmeirion can return to growth in 2027, and what's the longer-term outlook for the group?

Speaker #3: So what gives me confidence and I must say pride in the team as well of doing everything at pace. We're moving through at an incredible rate through lots of strategic decisions, fixing legacy issues, and making sure that the foundation for 2027 is solid.

Michael Scheepers: What gives me confidence, and I must say pride in the team as well, of doing everything at pace. We are moving through at an incredible rate through lots of strategic decisions, fixing legacy issues, and making sure that the foundation for 2027 is solid. Then we have so many plans for execution in 2027 based on achieving the 12 KPIs I just mentioned, that gives me confidence for 2027 and to be on that growth trajectory for that year. Again, 2026 is the year of transformation. 2027 is when we start building back to growth. Beyond that, I am very confident that the future of Portmeirion is indeed very bright, as long as we keep having the right people, the right processes, the right projects, and indeed focus on developing and building those heritage brands that we have.

Speaker #3: Then we have so many plans for execution in 2027. Based on achieving the 12 KPIs I just mentioned, that that gives me confidence for 2027 and to be on that growth trajectory for that year.

Speaker #3: Again, 2026 is the year of transformation. 2027 is when we start building back to growth. And beyond that, I'm very confident that the future of Portmeirion is indeed very bright as long as we keep having the right people, the right processes, the right projects, and indeed focus on developing and building those heritage brands that we have.

Speaker #2: Great. And if you have any closing remarks?

[Company Representative] (Portmeirion Group): Great. If you have any closing remarks?

Speaker #3: No, I'd like to thank investors everybody who's been listening in and watching this for their attention. We cannot do this without having people that understand the road that we're on as Portmeirion.

Michael Scheepers: I would like to thank investors, everybody who has been listening in and watching this, for their attention. We cannot do this without having people that understand the road that we are on as Portmeirion. Yes, there is a lot to reset. We are doing that very quickly. Again, it is those 12 KPIs that I mentioned that I think will be our guide on that. Achieving those will set the foundations for a new type of Portmeirion, and what is very exciting around that, of course, is at the end of November, we are looking to also rename the company to Spode. That will be a big reset moment for the business.

Speaker #3: Yes, there is a lot to reset. We're doing that very, very quickly. Again, it's those 12 KPIs that I mentioned that I think will be our guide on that.

Speaker #3: Achieving those will set the foundations for a new type of Portmeirion. And what's very exciting around that, of course, is at the end of November we're looking to also rename the company to Spode.

Speaker #3: That will be a big reset moment for the business. We are committed to manufacturing in Stoke-on-Trent, the heart of the potteries. These are the things that make me proud for the future of Portmeirion—or I should maybe say Spode PLC for 2027—because I think that's really where the key drivers for growth will come from.

Michael Scheepers: We are committed to manufacturing in Stoke-on-Trent, the heart of the Potteries, and these are the things that make me proud for the future of Portmeirion, or I should maybe say Spode PLC, for 2027, because I think that's really where the key drivers for growth will come from. Having the right team, having the right range, having the right design, moving at pace, a factory that works fantastically and effectively with great people that are dedicated to the growth of the company, that have a huge amount of experience in the Potteries. It gives me a lot of joy and a lot of pride to see what we've been able to do, and it gives me a lot of confidence for the years on the road ahead.

Speaker #3: Having the right team, having the right range, having the right design, moving at pace, a factory that works fantastically and effectively with great people that are dedicated to the growth of the company, who have a huge amount of experience in the potteries—it gives me a lot of joy and a lot of pride to see what we've been able to do, and it gives me a lot of confidence for the years and the road ahead.

Speaker #1: Thank you to Michael for joining us today. That concludes the Portmeirion Group interim results presentation. Please take a moment to complete a short survey following this event.

Operator: Thank you to Michael for joining us today. That concludes the Portmeirion Group interim results presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.

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