Portmeirion Group (LSE:PMP) — Interim Results

0:01 Good afternoon, and welcome to the PORTMEIRION GROUP PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, company can review all questions submitted today and publish responses, which is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO, Mike Raybold. Good afternoon to you. Good afternoon, everybody, and thank you for joining us. This is PORTMEIRION GROUP's 2024 interim results presentation.

0:48 Like I said, you have me, Mike GROUP, chief executive, and my colleague, Dave Sproston, our group finance director. We're looking forward to talking to you today to run through our latest half year results. And as I've said, there's opportunity at the end. If you have a question, I'll log in, and we'll get to as many of those questions as we can. I'm gonna start straight away with our headlines. There are a number of slides of background on the company, which I won't go through this morning. But if you haven't listened to one of our presentations before, you can find those afterwards when we post this slide deck on our investor website. So starting with an overview for our first half. Sales, as we reported in July, were down 17%, and this is particularly due to one market and a particular issue in South Korea where we had destocking going on with our key distributors.

1:49 I'm gonna deal and talk about a number of our key markets in detail later on, and that will include the South Korean market. If we exclude that market, we were pleased our sales everywhere else were up about 5% on a constant currency basis. That included a 5% growth in our US market, our our biggest sales market in the group, which also contributed a 50 points improvement in gross margin. As a result of that year on year sales reduction in South Korea and the impact that it had on our factory utilization in the first half, we reported a loss, and Dave will come talk to our financials on the next slide. Looking forward, the cost reduction program that we initiated in the first quarter is on track to deliver around 10% or £4,000,000 of benefit of lower overheads across the year.

2:43 Our order book going into Christmas in our main US and UK markets and in our wax local home frames business are ahead of last year, is encouraging. And so we expect to forecast our profits to currently be in line with consensus market expectations, which is 4,500,000 PBT compared to 3,000,000 in the comparative period last year. Our interim dividend expectations for the year of 7.25 p against 5.5 p last year, and Dave will talk in more detail about that shortly. Similarly, in the last few weeks, we've signed a new long term bank facility deal, four plus one, four years plus one with Barclays under an RCF for 30,000,000. Again, Dave will give the detail on that shortly.

3:36 So that's an overview. I'm now gonna hand over to Dave who's gonna review our financial and balance sheet performance, and then I'll come back and talk in more detail about the performance of our key markets and brands and where we're going forward. Okay. Thank you, Mike. In terms of sales for the first half of the year, sales were 36,600,000, which was a 17 percent decline from the first half of twenty twenty three. And as Mike has indicated, that was really driven by by South Korea. Outside of South Korea, constant currency sales were were up 5%. The first half results in terms of profitability was a was a 2,000,000 loss driven by the drop through impact of those sales reduction.

4:26 In terms of interim dividend, it's 1.5 p for for for the interim, although that is really due to a rebalancing of first half, second half dividend. So we've maintained our full year dividend guidance or market at market guidance at 7.25p. In terms of inventory, that continues to be maintained below 2023 levels. And at the half year, net debt was £1,600,000 better than the half year of 2023. In terms of balance sheet, we signed a new bank facility. So since we last presented to everybody, we have been with with Lloyd's as our bankers for, I don't probably about fifteen years, and we've really taken the time to do a full retender process in order to simplify our lending structure.

5:20 And we've recently signed at the end of August a new four plus one year £30,000,000 revolving credit facility, And that gives us significant facility headroom at peak time of year, which largely is at the end of the third quarter going into the start of the fourth quarter due to working capital. However, we are demonstrating our medium term aim to reduce net debt, and that reduced by 10% over the first half of twenty four versus the first half of twenty three. We have a 5% ongoing decrease in inventory as part of our inventory reduction program. And then finally, on balance sheet, in terms of pension scheme, we continue to maintain a small surplus in the scheme, and there were no ongoing employee contributions.

6:08 The final slide on on financials. We cover some of these markets in in in a bit more detail shortly. But in terms of the headlines, The US, our largest market, was up 5% in constant currency despite difficult market economics. The UK was up 11% driven by improving wax lyrical top line growth around new listing wins in the grocery channel. South Korea was down 61%, although that represents a 10% reduction in the market. The rest is due to destocking in the mass channel. And then finally, in rest of world markets, slightly behind for the first half, which is down to timing, but we expect to see full year growth in rest of world markets for the full year fourth consecutive year.

7:00 Thank you, Dave. So moving on to our brand brands performance. You'll know if you've joined these presentations over the last couple of years that we have a particular focus on growing our Spode brand, and you can see a chart on the bottom left of this page that shows the progress that we've been making in achieving that growth. I'm pleased to say in this six month period, our Spode brand is up again, and this is due to a number of factors. Getting more listings within the key markets like The US and UK, launching new product under this brand and getting further online penetration around the world. Our PORTMEIRION brand is down year on year in the first half, but this is really down to the reduced sales and order flow from our Korean market for our range Botanic Garden, which makes up the vast majority of sales into the Korean market.

7:59 Our Nongbei brand sales were down in the half. That was particularly due to the weaker economy in The US where our non Bay brand is particularly dominant and the impact on premium department stores that have seen reduced footfall. And for our own non based stores that are in and around the state of New Mexico, there's been lower levels of tourism, which has impacted retail performance across the board. Wax Lyrical, however, our home fragrance business is really growing very nicely. We've seen a much improved performance in this division in the last couple of years. Good growth last year, and this year, we're up 31%. Again, the new strategy we have in this business, the new management team doing an excellent job in winning listings, winning shelf space in the grocery channel with customers like as the and Tesco.

8:58 I'm now gonna look at some of our markets in more detail. I wanna start with The US. It's our single biggest sales market. And whilst we've made good progress since 2019, 2020 growing this market in the last eighteen months, Clearly, like everywhere in the world, the consumer spending has been under pressure, and that has impacted our brands as with everybody else. We did grow 5% in the first half at constant currency. We did see an improvement again in gross margin points, which is an important driver as we look to increase our operating margin over the next few years. As I said, our non vape brand has been hit the hardest during the consumer recession, particularly because of the status within premium department stores and the decline in tourism fall in some of the key places where we have stores.

9:54 We've continued to navigate a lot of challenge in terms of supply chains moving products from Asia from Asian factories into The US continues to be difficult in terms of the longer routes around Africa, disruptions in travel and lead times, and the much higher container rates again this year. However, I'm pleased to say that we've managed to get product in the right place for Christmas, albeit there have been challenges in the last two or three months. As we look forward, we have strong advanced order books. We typically get order books for Christmas that represent around two thirds of our key Christmas business, and those those advance orders are up up on last year, which is encouraging.

10:41 And despite the tougher economy and tougher consumer spending levels in The US, I'm pleased to see our team still win new business, new listings, and there's a couple of examples I've given here where we've increased our presence significantly within the premium department store Williams Sonoma and also taken on new online accounts like The Knot. Moving on to South Korea. It's our third biggest market. And as we said at the outset in the summary slide, this was the market where we saw the key challenges in the first half of the year. Our sales year on year were down 61%. Our analysis tells us that a roughly 10% of that 60% downturn is about the market. So, again, the general recession within Asia and slowdown in consumer spending as they, like everyone, cope with higher interest rates, higher cost of of living, and so on. The remaining 50% is about overstocks, particularly within the mass channel that are taking time to subside.

11:52 If you've been to one of our presentations before, you may remember that we service the Korean market through a series of distributors, and therefore, there are more players, if you like, more customers in the chain before the end consumer. Those customers and distributors restopped when the markets reopened after COVID and took significant amount of stock in, and then that butted up into a real downturn in consumer spending about half year point last year. So those that restocking has left our customers a lot of stock, which is taking longer to sell through, and that has resulted in slower order flow in first half of the year. What are we doing to stabilize that order flow? Well, from the time we've spent out in the market speaking to our customers in the last couple of months, we're pleased and reassured to see that those levels of those stock have reduced quite nicely since January. There's further to go. I think we will need to see where we are at the end of this year, but we've made good progress in the first six to seven months of the year. The second thing we're doing is accelerating some short term product development to help customers in career, giving them something new and fresh to get in front of the consumer.

13:08 And we're also significantly expanding the number of ranges that we have on the online platform, Kupang, and that will include this Christmas having our spoke Christmas tree range up for consumers to shop from. In terms of the more medium term, we're optimistic that this market will bounce back to kinda historic levels of order flow, and you can see on the top right hand chart sort of history we have trading in the South Korean market. Why do we think that is the case? Well, firstly, our botanic garden range has a highly successful and long term market position within Korea. Our online platform, KUP PANG, their sales out to the end consumer of our products are actually up year on year, up 37%.

14:02 That shows there's still demand in the market from the end consumer. And indeed, our rankings in terms of brand search online in platforms like coupon have actually grown, and you can see from the pie chart on the right side the dominant position that we have in terms of consumers searching for our brands, our products within online space. So with that in mind, we expect to see the second half sales in Korea to be back broadly in line with the second half last year, and then, hopefully, this market will recover start to recover through 2025. Turning now to Wax Lyrical, our home frames business.

14:48 As I said in our headlines, we're really pleased to see the improving performance and the follow through on the new strategy from this part of our business. The sales in the first half are up nearly a third, and the new ranges that we created around about a year ago that were at a good price point, an aggressive price point that we could target the grocery channel have been very successful. We got new listings in ASDA this time last year. That product has continued to perform well within ASDA stores in the last twelve months and is still on sale. And it's gone, in addition, in the last few months into Tesco and into the Waitrose, chain of stores as well. So we're making good progress getting new listing with some of these price fighting ranges that we created around about a year ago.

15:43 In other parts of our home frames business, our Christmas lines have been extended, renewed, refreshed, and we're seeing the benefit in terms of improved advanced orders for Christmas this year. That together with the well performing grocery range gives us some optimism that the second half growth will continue as well. In long standing accounts such as Dun Elm, we've mixed up the ranges that we have in store and are seeing improved sell through rates. So what I know, we're pleased with the performance of this division in the last six months. We expect to return back to profitability for this division for the year for the year 2024, and I think we have good momentum going forward into 2025.

16:33 And finally, in this section, I wanted to talk about our rest of world sales markets. We've said for the last couple of years that developing our rest of world sales marks key part of our long term ambition to grow our business. And I've put some examples together here on slide twin of slide 17 of the work we're doing in Asia and in particular within Malaysia and the progress we're making. Malaysia, as an example, has developed very quickly in the last couple of years from almost nothing to around about 2,000,000 sales a year. We have two new distributor partnerships, and those partners are are doing great things with our brands, with our products in the Malaysian market. You can see the different routes to market here on this slide. On the left hand side, we now have some PORTMEIRION branded stores across Malaysia in the middle.

17:27 We are listed within Parkinson's, a key department store chain across Malaysia. And then finally, online sales are a key contributor. Around 40% of the sales in this market are now coming from the TikTok platform, and indeed, RH Botanic Garden is now one of their top performing lifestyle products on that TikTok platform. Our distributors believe there's further high growth potential in the Malaysian market over the next three to five years, and our job, obviously, is to support them to deliver on that ambition. So the Malaysian market, together with the work we've done the last two years with distributors in China and the work we intend to kick off late this year and early next year in Taiwan gives us some confidence that we have a good road map for growth within Asia and a good ongoing road map for growth within our rest of world sales markets.

18:29 I'm now going to move on to our forward ambition and strategy to deliver that. We've been very clear in these presentations over the last two or three events that we see an opportunity to grow our top line over the next five years, but equally important, we want to significantly improve our operating margins. Dealing with that top line growth opportunity, first, on slide 19, we've laid out the key areas that our teams are focused on. The first is geography, growing those rest of world sales markets. I've given some examples on the last few slides of how we're doing with that. But within Asia and our rest of world's surround markets, we have a good track record of growth, and we're gonna support that growth going forward.

19:20 Second driver for top line growth is about online online penetration, open up more online markets with the very well known products and brands that we have. We continue to focus on our own website sales. In fact, we've improved the operating margins the last six months on on our own websites. We're growing our online presence in rest of world markets. Malaysia, China are two good examples. And in South Korea, as I said a few slides ago, we're expanding the the ranges and the availability of our product on platforms such as Coupang. Third driver of growth will be new product. We've had a good pipeline of product that we brought to the market in the last six or nine months.

20:08 Three examples today to share with you. First of all, our new contemporary tableware range called Minerals. There's a photo on the left hand side of this slide. It's new, it's different, and it's fresh at PORTMEIRION. That was exclusively launched in John Lewis in the second quarter of this year. It was well received, and it's now being rolled out to further retailers up and down The UK and in addition into some of the other countries as well. Secondly, long standing and important Spoke Christmas tree range continues to grow, and that comes from new development as well. We have a UK made edition of Spoke Christmas Tree that is fresh and new for this year, and that'll be in UK retailers like Forman Mason's.

20:55 It'll be in The US, and it'll be in South Korea online. And thirdly, on the new product, the grocery range that I talked to that we developed within the wax lyrical business. Again, we're extending that range in terms of fragrance and looking at how we can develop further for 2025. So geography, online penetration, new product, and then finally, leveraging our extensive brands and range portfolio more effectively against geography and in terms of omnichannel retailers. The other area of our forge strategy is how do we improve our operating margins. We've been quite public in in recent presentations and stating that we want to get our operating margins back to 10% as soon as we can.

21:50 And, really, there were three key drivers of this, reducing our operating gearing, improving the profitability of our wax lyrical division, and leveraging our top line. So if I deal with those one one at a time in terms of our operating gearing, we've restructured our our operating base in the first quarter of this year, taking out roughly 10% or 4,000,000 of operating costs. So this will go a long way to delivering a full year benefit of around three to 4% improvement in operating margin. Secondly, I've talked about the progress we're now making with our wax lyrical business. We expect it to return to profit during full year 2024 and then hopefully grow further in 2025.

22:40 Top line leverage is where we've been challenged in the short term. Growing our sales in key markets like The US and Korea has been a challenge with consumer spending. But in when those markets normalize as we would expect at some point, we should expect to see improvement in terms of our utilization of our factories and the ability to leverage all the infrastructure that we have in those markets around the world. I'm gonna just pass on to Dave again who will give an update on ESG, but particularly what we're doing with energy consumption and energy contracts. Okay. Thank you, Mike. So, yeah, I think we we have a sort of headline strategy in terms of energy. We are obviously consume a significant amount of energy as a UK manufacturer.

23:32 What we are doing and have set out a very clear roadmap to reduce our energy consumption. Actually, in the first half of the year, we successfully reduced by 10% across our UK sites following a full year benefit of about 8% reduction. Last year, we're continually investing in automation and replacing old plants with new, more energy efficient equipment. And as as I said, we have a road map in order to continue to generate energy reductions. We've also recently extended energy contracts out until the end of q one twenty twenty seven. That is a reduced we were out to q one twenty five.

24:17 We have a reduction for the next twelve months to q one twenty six and then a further reduction for for the second year out to q one twenty twenty seven. Thank you, Dave. And so I'm gonna summarize now where we've been in the first half and where we're going. Just a reminder before I do that summary that if you haven't registered a question yet and you want to do so, if you want to fill that in in the box, then shortly, we'll come to answer as many of those questions as we can. So in terms of a summary of what we've covered today, clearly, the markets in which we operate in, the consumer environment we operate in has been tougher and stayed tougher for longer than I think any commentators expected.

25:09 Interest rates have stayed high for longer. And in particular, in the first half, we saw the impact of reduced consumer spending in Asia, particularly in South Korea, really impacting our order flow in that market. However, elsewhere, we see really good progress up and down our business. Our sales outside of that South Korean market are up 5%. The US, our biggest market, started growing again and has improved margins. In wax lyrith build, our home fragrance business, we continue to see good growth coming from the new strategy in grocery. As Dave said, we've reduced our inventory again. We've reduced our net debt again. We've been proactive in terms of engineering a leaner cost base, and that will deliver significant benefit in terms of overhead savings this year.

26:02 And we've signed a new four year bank facility with a with an RCF and competitive rates. So a lot of work has gone on. As we look forward in terms of outlook, we're encouraged by the Christmas order books that we have, the advance orders we take for Christmas in The US, in The UK, and also in wax lyrical, our home frames business. With the work we're doing in Korea, we expect the second half performance in that market to be back broadly in line with 2023 prior year. And so our market expectations for full year 2024 remain at 4,500,000 versus 3,000,000 p b t last year.

26:49 As a management team, we're excited about our medium and long term prospects for growing those operating margins and growing the top line again. That's us. We thank you for dialing in today. I hope that's been a useful run through, and we look forward to answering any questions that you have. That's great, Mike. David, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated in the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via our investor dashboard. Mike, David, as you can see, we have received a number of presubmitted and live questions for today's presentation.

27:38 And if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I'll pick up from you both at the end. Thank you very much. Okay. Thank you for your questions. We have lot of questions, and we're gonna try and pick up as many of those as we can. Some will overlap, and we'll try and we'll try and make sure we only have answer once. So the first question is around revenue stream and stock building in certain markets. How do we work with customers so order flow is smoother and less stop start? I think where we where we find that difficult is where we don't have our own self infrastructure within a market. So within The US and UK, we have substantial sales and marketing teams, and we're very close to to end customers and retailers.

28:33 In markets like South Korea, we we work through distributors. They're experts in their market, but it means it one step removed. I think what we can do is try and get better management information on stock levels in the market. Indeed, that's what we've been working in the last two, three months in Korea. The next question is around how do we get growth or better growth that within the PORTMEIRION brand and NAMI and what are the solutions for that? Well, you know, to a degree, all of our brands have been impacted by the much tougher macroeconomic environment and the reduced consumer spending. You know, our products are at a certain place in the market, which is mid to premium mid, and those parts of the market, you know, there's no doubt, have been impacted.

29:27 That said, the way that we can win in tough markets is to take on new listings, new accounts. I gave some examples of the work that we're doing on that front in The US to get in front of more consumers through online and by launching fresh and new products that gets customers and consumers excited and and tied into our brands. Dave, the question is which costs have been impacted by restructuring? So do wanna pick? Yes. It's it's really I think as we said before, it's it's really across across the board. I think all areas, I think there was an element of of of headcount reduction, but really all departments have been, you know, have been have been targeted with with with a with a a with a reduction.

30:17 Next question, what's the annual fixed costs in the operating cost line? So generally, cost of operational sites. So obviously, have two factories in The UK. We have two warehouses, and we have two warehouses in The US as well. So it's by far this sort of operational infrastructure that's the biggest fixed cost. Next question is, is it possible to split the operating cost more, cost of sales, personnel, sales and admin costs? In the annual report and accounts, we do split we do split our operating costs in that manner. We don't for the half year, but for the full year, those numbers are are split.

31:03 Next question is energy. How much lower is the renewed energy contract for q one twenty twenty seven? It's probably at least 10% step down in each each of the two financial years over the the current rate that we that we're that we're paying. What is the interest rate on the renewed credit facility? That will we we haven't gone to press on what that is yet. It is a slightly lower rate that we're paying currently, but that will be that will be in our annual report accounts that come out comes out in March next year. Next question is inventory is decreasing somewhat. Are there ways to decrease your stock levels? What ideas that you have? Yeah, Dave. Thank you. I'll I'll step back in. So we've from our peak inventory, after all the supply chain disruption in 2021, we've been successful in reducing inventory in most parts of the group.

32:05 I think the remaining challenges is on our UK made ceramic stock that we make in our own factory, and that really is about balancing the need to reduce stocks with the output and productivity in the factory. So that's really the area that will be of focus in the next twelve months. There's a question around share price predictions and dividend predictions for the forthcoming few years. So, clearly, we don't set the share price, unfortunately. I think that we are hopeful that by delivering improvements to operating margin over the next few years, then the market will notice the value in the PORTMEIRION investment case, and the share price will react accordingly.

32:56 In terms of dividend, we have a progressive dividend policy, which means that we expect the dividend to go up in line as profit goes up. I think that the current market consensus forecast for dividends are 7.25 p for this year, Dave. Yep. 12 p for 2025 and 17 and a half p for 2026. So that kinda bears out the point about we're having a progressive dividend policy. Next question is around the improvements that we've taken, the benefit.

33:41 When will we see that? I think I think that, clearly, it's been a difficult few years for all consumer good business international consumer good businesses. Not only has the consumer side of the market been under pressure because of cost of living and higher interest rates, but also supply chains have been really challenged, really turbulent in terms of moving products around and at a cost. How fast those consumer markets recover, it's very hard for us to say today. I think that, as I say, all of our markets have probably been tougher than anybody expected at the start of this year, but once interest rates stop to come down, and hopefully, will react.

34:26 We are seeing some sign on supply chains that things will finally settle down. Container freight rates that did peak again over the summer have started to come down, and if we can keep them down for longer, then freight cost of freight and margins will benefit. What is what is our expectations for Wax Lyrical? Well, having had a tough couple of years coming out of having a tough couple of years coming out of COVID wax lyrical, the new strategy that we have for winning business in high footfall grocery channel has been successful. We think we have some good momentum now with that strategy. We're still winning new listings, and so our expectation is for growth over the next couple of years in Wax Lyrical, and that should feed through to improve levels of profitability as well.

35:23 The next question is what is the edge that we have in the marketplace? I think that's our point of difference. And so, really, it starts with our brands. Our brands are well known and have been around in some cases for hundreds of years. That gives a retail buyer confidence. They know our products perform, and the consumer is aware of our brand, and in many cases, collects our our product or ranges. So I think it starts with our brand. Our quality is also a key point of difference. We make high quality products. And then thirdly, I would I would highlight that we have a wide distribution around the world. We're not focused on one on one country. We're well known around the world, and we have some significant infrastructure, particularly in The US and The UK to service those markets.

36:16 Next question is is our confidence levels for full year market expectations in the second half weighting. As I said in the the body of the presentation, we look at a number of things. We look at our order books and the advanced order books we have for Christmas and how does that compare to previous years. And, obviously, we talk every week with the key retail groups, whether it be in the Macy's and Bloomingdale's and Amazons or in The UK, the John Lewis, you know, and and our distributors around the world. And so we we put those two bits of information together, which segues into the next question, which is around how strong our trading visibility is for the South Korean market. We don't have a large sales team in South Korea. We work through distributors.

37:07 So to some degree, we are dependent upon those distributors for their forecasting and their information flow. But as I said earlier on, we are doing everything we can to get closer to the end customer in Korea and get some more consistency in terms of order flow. Next question is what annual revenue could our factories deal with? So I think this is about capacity. We have a good level of capacity or free capacity in our ceramic factory in Stoke On Trent. We could probably increase production by 50% from current levels. In wax lyrical, our factory in Cumbria, we've actually increased production by about 30% this year already, which is fantastic.

37:58 And with some extra shifts and labor, we could probably at least add another 30%. How much and next question is how much of our our sales are driven by property sales, by which I mean I think they mean house house sales. That's a great question, and I really have an answer for that. I think we are, as I said, high diversified in terms of the markets we're in and the channels we're in far more than we were three, four, five years ago. We're far less dependent upon premium department stores, and we're not dependent upon just The UK or just The US. We sell to around 70 countries.

38:45 In terms of house sales, I don't know what the correlation is, but it's a it's a good question. Maybe we'll we'll go away and look into that. There's a question now about AI and whether there is a role for AI in designing new products. Maybe that's what I should throw at my my design team. We have a great design team around the world, a global design team, who are really fantastic at what they do. And so I think that human touch will remain very important for us. There are, however, ways where AI can simplify our lives increasingly on online platforms. AI is being used to write copy. It's also being used for production of lifestyle photography of your products, of putting your products in in real life situations, and I'm sure there'll be many more applications to come.

39:38 Next question is around capital investment in our Stokehold Trent site and what is our focus over the next couple of years. Dave, do you wanna pick that up? Yeah. I think I think, obviously, we've been on an accelerated capital capital expenditure plan, particularly in terms of automation over the last couple of years. I I think I would say for the next twelve to eighteen months, we've just got a new a new dipping line, which is just coming on stream now. So I think, really, it is it is getting the benefits of the automation that's put in place. I think probably the next twelve to eighteen months is more is more sort of maintenance and maintaining the the the the the what we've got, possibly some opportunities from an energy perspective in terms of terms of capital investment. Thank you, Dave. Next question, share buybacks. What's our view on share buybacks?

40:30 I don't think we've ever been asked that before. We don't have any any plans on share buybacks. I think share buybacks are really for companies that have more cash and have don't have a way of investing it back in the business. I don't think that's I don't think that's a decision wherein we can see the benefits of the cash we're investing in the business right now. Where do we see inventory in net debt is the next question. What David's already said, I think that expectations and our ambitions are to continue to reduce inventory and net debt this year somewhere between 510%. Yep. Equally, David, I think, has answered the question about interest rates on the new borrowing. Yeah.

41:19 It's lower than the previous facility, and we'll publish that in the next annual report. There's a question about South Korea, the challenges we're having in the time frame. Again, just to reiterate what I've said in the presentation and already, The market is down like like most markets around the world in terms of consumer spending, but that has been massively compounded by stock that is built up whenever they came back post COVID and and filled all their warehouses. People wanna hold less stock generally because of high interest rate, the cost of money. And then what do we do to fix it, and how long is it gonna take? And as I said, I think we're gonna see a a much more like for like second half and then hopefully a gradual improvement in 2025 as those stocks have hopefully reduced and got back to normal levels.

42:14 There's a question around whether we can offer product discounts to private shareholders. I don't think we've been asked that before. If you come to one of our factory stores, then everybody can get a very good factory factory store price. But outside of that, we always welcome shareholders to come and visit us. Moving on, we've got this is the last question. Is there a segmentation between product availability in different markets, or can I buy all your products in any of your markets? So we have certain ranges that are almost universally available across markets, and that would include things like PORTMEIRION Botanic Garden, which accounts for roughly a third of the group sales for a successful range over the last fifty years or so.

43:21 Other of our ranges may only be available in certain markets. We have some US specific ranges. We have shapes of product that are specific to the Asian market because of different eating and dining habits. And so, really, we do both. We have some products that work everywhere and then other products that we may develop just for a particular market either aesthetically or in terms of use. One more question is about m and a opportunities. I think we have a a great deal of work and opportunity with the brands that we have. But if anything came across our desks that we thought accelerated our strategy, then, obviously, we would we would investigate it.

44:10 Okay. My thanks to everybody that posted a question. I think we've got to deal with pretty much all the questions, and I hope that the answers were were informative. And just to say thank you again for everybody that's dialed in today. That's great, Mike, David. I believe you have addressed all those questions from investors today. And of course, the company can review all questions submitted today and publish responses when it is appropriate to do so. But before we direct investors to provide you with their feedback, which I know is particularly important to the company, Mike, could I please ask you for a few closing comments? Thank you. Again, our thanks for those of you that have joined us today. We hope that the overview we've given has been useful. We hope that the answers to questions have been useful.

45:01 As a management team, we're excited about the opportunities that we see the business has, and we're looking forward to making progress on those. We look forward to doing another one of these presentations at the end of the year to talk about our full year results. And until then, we we look forward to seeing you there. Okay? Many thanks. Fantastic. Mike, David, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback and order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of PORTMEIRION GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.