IG Design Group plc

Good morning and welcome to IG Design Group's full year 2026 results presentation. I'm Stuart Gilliland, Interim Exec Chair, and I'm joined today by our Group CFO, Rowan Cummings. Today's agenda will cover a review of the year's performance, followed by a more detailed look at the financials. We'll then provide a strategic update before concluding with an outlook, including reaffirming our guidance and our capital allocation policy. Moving on to the full year summary for 2026. It's been a transformational year for the group, following the sale of DG Americas to Hilco on 30 May 2025. We're now a more focused and less complex business, with the quality of our earnings materially improved. All the results we are presenting today relate to the continuing group on our instilling. We have delivered strong results against the backdrop of still challenging market conditions. Revenue, profit and cash were ahead of expectations, demonstrating the resilience of a more focused group. We've delivered revenue of $217.9 million and operating margins of 4.4%. We're pleased with our strong net cash position of $54.6 million, where the continuing group generated $16.2 million of cash in the year. This provides a robust platform for future growth, and Rome will take you through the financials shortly. Strategically, we've made significant progress. The disposal of DG Americas marks an important milestone in the simplifying of the group. We've continued to build momentum across our strategic growth pillars, including the bolt-on acquisition of GlenArts, Looking ahead, the outlook remains positive, which strengthened our leadership with the appointment of a new CEO, Gerald Kerr, who joined as CEO designate on the 1st of May, 2026, and will assume the role of CEO on the 1st of July, 2026, at which point I'll return to my role as non-exec chair. Gerald has been working with the group since January, so he already has a strong understanding of the strategy, operations, and our customers. Additionally, our guidance remains unchanged, reinforced by an order book with levels of 78% of budgeted revenues, and we continue to see a supportive order book, underpinning confidence in the period ahead. We're very pleased to announce both a dividend and a share buyback, reflecting our clear commitment to long-term shareholder value creation. I will cover our new discipline capital allocation policy in more detail later. Overall, IG Design Group is now a smaller, simpler, more focused business, one that is profitable, cash generative, and supported by a strong balance sheet, positioned as well for the future. This slide reflects the group as it stands today following the transformation over the last year. While we continue to have broad reach with over 550 million products sold annually across more than 50 countries, The real strength of the business is in the quality and durability of our customer relationships. We have longstanding partnerships with the winning retailers, including Aldi, Tesco, Action, and Costco. These relationships are central to our model, with our customer base increasingly weighted towards the resilient, value, and mass channel, which now represents 76% of group revenue. Our model is supported by our core capabilities, product design and innovation, responsible sustainable sourcing, and a well-established distribution network, alongside the market insight that enables us to anticipate trends and stay relevant in a fast-moving and often seasonal category. So overall, this is a more disciplined and focused group than before. one that has a strong heritage and long-established and stable relationships with our customers. We have four clear priorities for the business, addressing the challenges in the US business that were impacting the wider group, simplifying the business model, sharpening and focusing on our core markets in the UK, Europe and Australia, and improving financial stability. I'm pleased to say that we delivered against each of these. Most significantly, we completed the sale of DG Americas at the right point in time, exiting a structurally challenged and loss-making business. The timing and nature of the transaction mitigated further financial and operational drag that the group would have otherwise have experienced and protected the profitable cash-generative part of the group. That has allowed us to materially reduce complexity and establish a much clearer strategy, with more focus on our core geographies. At the same time, we've improved financial stability, strengthened the balance sheet, and have the required banking facilities in place for the year ahead. This is a business that's been fundamentally reshaped over the last 12 months, smaller and simpler, but also more stable, more focused, and better positions to generate sustainable profits and cash. I'll now hand over to Rowan to take us through a more detailed financial review.

Thanks, Stuart. Before we dive into the financials, let me step back and look at what we promised at the beginning of the year and how we've delivered against that. As a reminder, at the start of FY26, we were reporting in US dollars, and at the end of the year, we transitioned into sterling. On this slide, we're showing both our delivery in dollars directly against our original guidance, and equally in pounds to bridge that commitment to our current reporting currency. And as GF has already said, all of the results we are presenting today relate to the continuing group. Looking first at revenue, we guided to $270 to $280 million and delivered $291.8 million, which translates to £217.9 million. For adjusted operating margin, we guided to 3% to 4% and delivered 4.4%, slightly above the top end of the range, reflecting strong operational discipline. And finally on cash, we guided to $40 to $45 million and delivered a very strong $72.2 million, or £54.6 million, driven by improved profitability and significant working capital release as inventory levels normalised. Building on that, this slide tracks in more detail how we've delivered against the commitments we set out a year ago. On the left, we said we would improve profitability, strengthen cash generation and balance sheet discipline, reduce central costs, and simplify the business. Starting with profitability, we delivered an adjusted operating profit margin of 4.4%, ahead of market expectations, reflecting both revenue outperformance and continued cost discipline. On cash generation and balance sheet, we've made particularly strong progress. We generated £26.4 million of adjusted operating cash, up from £15.7 million last year, driven primarily by a significant working capital release as inventory normalised. We also refinanced the group, entering into a new receivable finance facility with HSBC and NatWest in July, which lowered our financing costs and provides flexible funding. Importantly, the stronger cash performance coupled with capital reduction project has enabled us to return capital to shareholders through dividends and share buybacks. In terms of central costs, we delivered on targeted cost reduction actions, generating 1.3 million pounds of savings. And on simplification, we've taken tangible steps, including a change in reporting currency and segmentation. Turning to group revenue. For the full year, revenue declined 3% to £217.9 million, reflecting the market headwinds we outlined previously. Looking at the drivers in more detail, performance has been shaped by a combination of volume, tariffs, pricing and effects. Starting with volume, we saw good progress from our strategic initiatives, delivering £7.9 million of growth across the group. particularly through expansion into adjacent and higher price point categories, such as decor and license ranges, leveraging the strong customer relationships we have in place. This largely offsets softer underlying demand of roughly £7 million, particularly in the UK, where the retail environment and the independence channel remains challenging. As communicated previously, the impact of US tariffs reduced revenue by £5.9 million. As well as the tariff itself, one of our largest customers also reduced ordering in anticipation of the weaker consumer demand as a result of the uncertainty created in the US market. In addition, we saw pricing pressure across Europe, resulting in a £4.7 million headwind, reflecting the competitive environment in which we invested in price to maintain our market position with key retail partners. Offsetting some of these factors, foreign exchange provided a modest tailwind of £2.2 million. From a divisional perspective, Europe and Australia delivered growth of 2% and 6% respectively, while the UK was down 12%, reflecting the more challenging trading conditions in that market. Moving on to adjusted operating profit. For the full year, adjusted operating profit was £9.6 million, compared to £16 million in FY25, with margins of 4.4%. The largest driver remains the revenue-related headwinds we have discussed, which reduced operating profit by £11 million. This includes the combined impact of lower volumes, tariffs and pricing pressure across the group. Breaking that down, softer sales volumes and mix account for £3.7 million, tariffs for £2.6 million, and pricing pressure a further £4.7 million, reflecting the competitive environment, particularly in Europe. Offsetting some of this, freight costs reduced by £4.8 million, as rates normalised following the elevated levels seen in the prior year. Restructuring initiatives contributed £0.8 million, which reflect the benefits from the closure of the China site in the prior year, offset by an impairment of machinery in DG Europe. Overheads increased by more 0.5 million pounds, with reductions across the cost base, offset by reinstatement of performance-related initiatives. So overall, while margins remain under pressure, the group is demonstrating increasing cost discipline, and the actions we have taken are now clearly offsetting a significant portion of the external headwinds. Turning to DG Europe, which accounts for 47% of revenue, DG Europe delivered revenue of 102.9 million pounds, up 2% year-on-year. This reflects good underlying progress in the business, with volume in adjacent and higher value categories offsetting the pricing pressure we have previously highlighted, and demonstrates the benefit of product diversification within our established value and mass market customer base. As flagged at the half-year, the European market has remained competitive, with pricing investment required to maintain our position with key retail partners. Adjusted operating profit was £11.5 million versus £14.4 million last year, with margins at 11.2% down from 14.3%. This reduction is primarily driven by pricing investment and lower gift wrap manufacturing volumes, which reduce production efficiency and operational leverage. It also includes a non-cash impairment charge of £1.5 million against certain manufacturing assets, following a reassessment of demand of European-produced but higher-cost product in that market. However, it is important to highlight that lower margins were partially offset by a tailwind from freight cost normalisation. Strategically, we continue to make good progress. On premiumization, we are seeing increased traction through licensed and higher value ranges. Product diversification remains a key driver, particularly in categories such as FSDUs and homeware, where early progress is encouraging. We have also strengthened commercial capability with key hires during the year, while continuing to expand with the leading value and mass market retailers who are performing well. Looking ahead, we will remain focused on premiumization and product diversification, while also focusing on customer expansion, now that we have strengthened our commercial capability. Europe has a strong market position and clear strategic leaders to support both growth and margin recovery over time. Now turning to DG UK, which accounts for 38% of revenue. For the full year, revenue declined by 12% to £82 million. While this remains a challenging performance, it does reflect a significant improvement from the first half, as we flagged at the time, where we saw much deeper declines. As we highlighted previously, the key driver was the impact of US tariffs on our largest customer, who reduced volumes as they adjusted ordering in anticipation of weaker consumer demand. We also provided pricing support to help mitigate the tariff impact, which further weighed on revenue. Working closely with our customer, we leveraged the strong commercial relationship to take on a wider range of new products, which partially offset the declining core volumes. Beyond this, performance was also affected by softer UK consumer environment, particularly within the independence channel. Adjusted operating profit was £3.1 million versus £5.6 million last year, with margins of 3.8%. This reflects the operational impact of lower volumes and unfavourable mix, particularly in our core gift packaging category, partially mitigated by actions taken last year, including the closure of the China manufacturing facility alongside continued overhead discipline. Strategically, we continue to focus on product differentiation and premiumization, expanding into higher margin categories such as decor and create products to reduce reliance on core gift packaging. We are strengthening commercial capability through insight and execution, including our commercial academy and the new B2B ordering platform, and progressing channel diversification to reduce concentration risk, increasing the proportion of manufactured product also remains a key lever, giving the operational leverage it brings. While profitability remains under pressure, looking ahead, DGUK is committed to building a leaner, more commercially effective operating model, simplifying core processes, sharpening the cost base, and enabling reinvestment to accelerate sustainable, profitable growth. DG Australia delivered a strong performance in the year, with revenue increasing by 6% to £33.5 million, reflecting good momentum across all channels and product categories, with particular strength in party wear, gift packaging and craft. Adjusted operating profit increased to £1.8 million from £1.6 million, with margins holding at 5.2%. The increase reflects the benefit of higher sales volumes and improved mix, which more than offset the increase in cost base associated with the warehouse relocation. As flagged at the half-year, the warehouse relocation, prompted by the expiry of the previous lease, has now been successfully completed. It has resulted in higher fixed costs, reflecting current market means. But it is also largely absorbed through strong trading. I would like to recognize the team for the effective execution of the warehouse transition. Importantly, this now provides a much stronger platform for future growth with additional capacity, improving distribution capability and operational efficiency. We also secured a new distribution agreement with Hinkler Books during the year, a complementary category that broadens our offering across the independence and national channels. The contribution in FY26 was limited, but as volumes scale, Hinkler is expected to be a meaningful contributor to growth and help us utilize the increased warehouse capacity. From a strategic standpoint, the focus now shifts to leveraging that platform. driving revenue growth through existing and new channels, optimizing the cost base as we annualize the warehouse benefits, and continuing to premiumize the mix and support margin progression over time. While DG Australia is a smaller part of the group, it is an important one and continues to demonstrate growth, good market position, and key opportunities to enhance returns. Let's now move to the detailed financial review, focusing on areas we haven't already covered. Growth profit decreased by 15% to £41.9 million, with adjusted gross margin reducing by 280 basis points to 19.2%. Encouragingly, adjusted overheads reduced to £32.3 million, down from £33.5 million year-on-year, reflecting prior year restructuring benefits and continued cost discipline, partially offset by higher people-related costs, including performance-related remuneration. As a percentage of sales, overheads were broadly stable at 14.8%. Below the operating line, net finance costs reduced slightly to £1 million, reflecting lower finance costs following the refinancing and the group's strong cash position, partially offset by higher lease interest of £1.3 million following the Australian warehouse relocation. The adjusted tax charge for the year was £1.3 million, an effective tax rate of 15.1%, which is lower than the prior year primarily due to a £1.6 million tax credit following the release of uncertain tax provisions no longer applicable after the closure of the China site. This results in adjusted profit after tax of £7.3 million and diluted adjusted earnings per share of 7.2 pence. Turning briefly to reported numbers, reported operating profit was £7.5 million. The difference to adjusted profit is a net adjusting item charge of £2.1 million, made up of £1.3 million of restructuring and integration costs, largely the Far East reorganisation and Australian relocation. Provision for guarantees following the sale of DG Americas of £3.8 million was partially offset by a £3 million profit on disposal of the surplus UK property. Finally, the reported results include the final impact of discontinued operations following the sale of DG Americas, comprising both trading losses prior to disposal and loss under sale. As before, any potential future proceeds remain uncertain and are currently expected to be null. Turning now to cash flow, for the full year the group delivered a strong improvement in cash generation with a net cash inflow from continuing operations of £16.2 million compared to an outflow last year. This improvement has been driven primarily by working capital which contributed £7.2 million inflow against £8.3 million outflow last year. This reflects a significant unwind in the elevated inventory levels we carried in the prior year, particularly in Europe. As a reminder, that inventory had built up following supply chain disruption at a key retail partner, and it reversed during FY26 as stock levels normalised, releasing cash. Adjusted EBITDA at £18.4 million, down from £23.4 million last year, affected lower profitability we have discussed. Importantly, this converted more effectively into cash, with adjusted cash generated from operations of £26.4 million, up from £15.7 million. Capital expenditure was £2.9 million, broadly in line, albeit lower than the prior year. Predominantly maintenance capex, alongside investment in electric forklifts following the DG Australia warehouse relocation. Tax paid reduced to £3.8 million. around £3 million lower than the prior year, reflecting prior year overpayments and lower profits in tax-paying territories, and lease payments reduced as we normalised the cost base. We also benefited from £3 million of proceeds from the disposal of the surplus UK warehouse, and interest remained well controlled, reflecting the benefit of a receivables financing facility. Finally, as expected, there was a cash outflow relating to DG Americas of £25.8 million, alongside £1.4 million of disposal costs, reflecting the final phase of separation, with no change in our assumption that the future proceeds remain uncertain and currently valued at nil. Bringing this together, the group ended the year with a strong net cash position of £54.6 million. The group has delivered a significant improvement in cash generation, driven by disciplined working capital management and a simplified business model, leaving us with a strong balance sheet to support future growth and capital returns. I'll now pass back to Stuart, who will talk through the strategic progress we have made.

Thanks Rowan. As presented to you last time, we have four drivers of long-term growth that underpin both revenue expansion and margin improvement. First, premiumization. We're upgrading and offering through improved design, higher quality materials, and more disciplined pricing. And we're already seeing the benefits of this through the increase in sales of licensed products, which now represent 8% of group sales versus 5% last year. Second, product diversification, which is to expand into higher margin categories to reduce concentration risk and improve resilience of earnings. Third, customer and channel expansion, increasing our reach across existing and new channels, including investigation into online platforms to drive volumes and enhance operating leverage over time. Finally, commercial capability, investing through training, commercial excellence programs, and better use of market insights. We've included some case studies of product ranges that deliver on our strategy initiatives in the appendix. And importantly, all of these are underpinned by our continued focus on low-cost, efficient manufacturing and sourcing, which remains a core competitive advantage. Turning to capital allocation. First, our priorities grow. We will continue to invest organically across product, commercial capability, and channel expansion, as well as pursuing selective strategically aligned bolt-on M&A, where it strengthens our portfolio or accelerates entry into higher margin categories. The bar for returns remains high. Second is a progressive dividend policy targeting three times earnings cover over time. We're committed to this policy being a sustainable dividend policy, so we'll not be impacted by any selective strategic bolts on M&A. Against that backdrop, we're pleased to announce today a one pence per share dividend for 2026, an important step in returning cash to shareholders whilst maintaining flexibility to invest for growth. Third, where we have surplus capital beyond the needs of the business, we will return this through share buybacks, subject to maintaining a prudent balance sheet. In line with this, we're also announcing a 10% share buyback program for fall year 2026 and the efficient use of capital at current valuation levels that also enhances earnings per share and overall shareholder returns. Stepping back, this framework is deliberately balanced prioritizing investment in growth, delivering a sustainable and growing dividend, and returning excess capital in a disciplined way. All underpinned by a strong balance sheet and robust cash generation that gives us confidence in executing all of these pillars in parallel. Post-year end, we completed a bolt-on acquisition with the purchase of Glenart in South Africa in April 2026. Glenart is a design-led manufacturer and distributor within the Celebrate category, with a strong position in crackers and a well-established local presence. And the business is highly complementary to our existing operations in both product offering and sales channel. Strategically, this acquisition is compelling across the three dimensions. First, its earnings accreted, and we expect it to be immediately earnings enhancing, in line with our disciplined approach to capital allocation. Second, it strengthens our cost competitiveness, providing access to a lower-cost manufacturing base that supports group margins and adds flexibility and resilience to our supply chain. Third, it represents a fourth step in geographical expansion, giving us a direct entry point into the South African market whilst leveraging Glenart's established customer relationships and distribution channels with the key market players. The consideration is based on multiple of Glenart's EBITDA, with initial cash payments of around 3.4 million on completion. His third fixed consideration over the following three years and the performance-related elements linked to Iridar, which keeps our interests well aligned. This is a clear example of the selective bolt-on M&A strategy we've outlined earlier, where we can add capability, improve margins, and expand geographically, while maintaining a disciplined return profile. We see this as the first step in building a broader international platform and will continue to evaluate similar opportunities that align with our strategic and financial criteria. The business today is more streamlined, focused and cash generative following strategic progress we've made over the last 12 months. We're better positioned to benefit from our long-standing strong customer relationships, have a resilient operating model and a robust balance sheet, which gives us flexibility to invest and return capital. That said, we remain cognizant of the macro environment, with ongoing cost pressures, inflation, and softer consumer confidence across a number of our markets. In terms of current trading, we remain encouraged by the order book, which is 78% of budgeted revenues, compared to 75% secured at this time last year. Looking ahead, our guidance remains unchanged. For 27-28, we're guiding to revenue growth of 0-5%, reflects our ongoing demand on certainty, and a disciplined approach to pricing and mix. Adjusted operating margins of 4-5%, supported by premiumisation, operating leverage, and continued cost control, and free cash generation of at least £5 million per annum. underpinned by improved profitability and tight working capital management. We have a business well positioned to deliver steady, high-quality growth with improving margins and a strong cash conversion, while maintaining flexibility to navigate the external environment. In the short term, our strategy will be focused on evolution rather than revolution, with continued emphasis on the four long-term growth pillars and accelerated momentum of future value creation where possible. With that in mind, I'd now like to pass over to Gerald, who will briefly talk you through why he joined the group. Following this, Rohan and I will take any questions that you may have.

Thank you, Stuart. Hi, I'm Gerald. I'm the new Chief Executive Officer Designate of IG Design Group. As I prepare to take up the role as a CEO as of July 1st, I'm delighted to be joining the business It's a very exciting time. What brought me here was really three things. People, the end market, and the opportunity. The people I met during my time working with Design Group as an advisor and since joining full-time have been really exceptional. They are passionate, committed, and deeply knowledgeable. It is clear to me that great companies are built by great people, and that's always been the most important factor in any role I have taken. I was also drawn to the markets we serve. Design Group creates products that bring joy to people's lives, and being part of a business that has such a positive connection with consumers is something I find incredibly rewarding. And finally, there is the opportunity. This is a company with strong foundations. talented teams, long-standing customer relationships, and genuine expertise. I can see significant potential in the business, and that's what makes this role so exciting. Throughout my career, from P&G, Bain, Unilever, through to leading partner in Patfood as a CEO in the last five years, one lesson has remained constant. Success starts with people. As a leader, I believe strongly in trust, transparency, and continuous learning. My role is to help create an environment where talented people can do their best work and where we are honest with one another about the opportunities and the challenges we face. Looking ahead, we have an amazing opportunity to build on these strong foundations. We have a talented team, strong customer relationships, and a market that matters to millions of people. I believe there is a great future ahead of us. I'm looking forward to getting to know more of our colleagues, customers, and also shareholders over the coming months, and to an exciting journey together as we continue to grow this wonderful business. Thank you.

Okay, I'll now open up to questions from the audience. If you would like to ask a question, please use the Q&A button at the base of your screen, type in the question, and I'll ask it on your behalf. We have already had a number of questions submitted, both by email and in the Q&A. So the first question is, what are the fundamental differences between the U.S. business and the remaining businesses?

Thank you, Bob. I think the thing is that the U.S. business was extremely complex. I don't think we ever really fully established how many SKUs we had, but it was something in the order of 160,000, yeah. multiple sites, lots of different required businesses that we struggled to actually integrate fully, 60 RP systems. I mean, it was a really challenging situation. And I think what really took it over the edge was the fact that we had a plan that we felt could turn the business around over a period of time. And then when the tariffs came in, it was quite clear that it was impossible to do that. and the only outcome from that was actually disposal, and actually we had to do that pretty quickly, otherwise we would have put the rest of the business at risk. What we've done for the rest of the group is now much simpler, far more focused, profitable, and cash-generative business, where we have very long established relationships with customers. So, you know, it's much easier for us to get our hands around. As a board, previously we spent all our time dealing with all the problems from the U.S. Now we've actually got control of the business, and we can actually see ways of how we can simply buy further and grow the business further as well.

Thank you. Next up, it's more three questions. They say, congratulations on the turnaround. I have two questions on working capital and one on owned real estate. First, how much of the €54.6 million net cash position do you regard as tied up in seasonal working capital? I think the three should be sterling. Sorry, 54.6 million net cash, do you regard as tied up in seasonal working capital? Second, do you see further potential for a structural working capital release over the longer term? And then thirdly, on the owned facility in the Netherlands, could a sale and lease back unlock cash for additional shareholder returns, and is that something that the board would consider? I don't know.

Okay, if we take working capital, I mean, in this particular year, we basically said we had a release of 7.2 million working capital. Last year, we had 8.3 million working capital coming in, and that was all with regard to the European business. I mean, when it comes to seasonality, we have, again, put the charge in the appendix of the working capital cycle that we have. We normally start the year with a lot of cash. We then build up a lot of working capital during the year, which is mainly seasonal working capital that we'll build up. And the peak of our working capital requirements is normally by the time we report half year. So while we're reporting March, our inventory figure sits at about 44 million pounds of inventory. That can be sort of normalized inventory a lot around the group. I wouldn't say a lot of that is seasonal inventory. The seasonal inventory will start building from now on. until we go through to half year. So, you know, the guidance we've sort of given for inventory going forward is that we put it at an optimal level at the moment. Going into the next financial year, you will see there'll be, on some of the analyst notes, there's a little bit of an inventory bull. That's because of us taking on the Hitler contract, as we said, in Australia. That will have a little bit of a working capital bull. And then from there, we're just saying an optimal level. of inventory required for the business would be growing at one or two percent as we grow our revenue. So, to answer the questions, we have the lowest level of inventory when we report at the moment. Inventory builds during the year, but I don't think there's a big structural element of cash to be taken out from inventory or any working capital for the remainder of the group. Salem reached my question. Salem Eastpac, I mean, You know, we own our sites, we always look at our property and our property values that we've got, but I don't think at this stage, you know, given the strength of the business and where we are right now, you know, and the excess cash that we've done within the capital allocation policy and everything like that, we would be sort of looking at selling the stack within those. I think there's no need to do that within anything given the strength of our energies.

Okay, thank you. Next question is, what are the estimated central costs going forward for are you still expecting around £5 million per year?

Yes, so within the central cost, we again have put a slide on some of the costs that we've taken out. I mean, annually we've taken out about 1.3 million run rate costs. And in this particular year, you've seen the costs go up slightly. That's because of transition costs that we've had coming in and reinstatement of some of the remuneration incentives. But going forward, we are looking at an annualised level just over the £5 billion mark, which is what we previously guided you.

On the big change, though, with the audit costs, which are going to be quite complex this year because of DGEA being included, but next year will be significantly simpler to audit.

Yeah. So within the central costs, we have taken out exactly as we said. We've got a simpler banking structure. We've taken out a lot of costs around insurance, audit fees, and we've also reduced the headcount of entities.

Okay, thank you. Can shareholders expect any additional excess property sales?

No, we don't have any excess property at the moment, so we have sold all of the property that we have deemed excess or anything like that. They are no further properties or assets sold for sale that we have on the overseas.

Okay, thank you. Next question is, in the medium term, what are the projects that IGR is envisioning to increase profitability or free cash flow or shareholder returns?

I mean, I think the primary focus now, as I said, it's been a hugely transformational year. What we're now looking at is a much simpler, more focused, profitable, cash-generative business. And what myself and Brian have been able in product diversification, in terms of new customers, new channels, and also in terms of our commercial capability. So we're building in plans with most of our major customers about how we grow going forward, and I think that's the platform we've built. Gerald will pick that up when he starts in fall as the new CEO on the 1st of July to really generate a very, very clear growth plan. So I think that's the main thing we need to do, and it's about recovering our margins both in the EU the UK and also in Australia. Shareholder returns.

I mean, I think with regards to shareholder returns, you know, we've clearly outlaid, I think with regards to the capital allocation policy, which is sort of our view, you know, enhancing shareholder value of the sort of medium to long return. We've clearly said it's, you know, it's just spoken about investing in organic growth, selective M&A, going back to paying a dividend, which we started today, and we'll increase that progressively over time, and then exit cash beyond that, which we would see and sort of have, you know, we've announced the 10% share buyback today. So I think, you know, we're continuing sort of along those two, and even that's why we laid out the capital limitation policy today.

Okay, thank you. Next question is kind of related. What would you say is the minimum level of cash that IGR expects to keep on its balance sheet?

I mean, when we sort of look at cash, we look at it in various ways. Obviously, we look at that cash flow cycle that we've got, and that one's in the appendix that we normally put on the balance sheet slide. You know, with our current level of cash that we've got, you can see that we haven't had to go into any of our borrowing facilities. in the year. Even with the 10% buyback, we are forecasting, we're not forecasting to go into that facility. So we haven't actually said what the minimum level of cash is, but we've obviously got a 40 million facility over and above that. So we've got ample facilities and ample headroom on the balance sheet. We obviously look at our opening cash position, our net cash position and our average cash position during the year. And the average cash position has remained strong at well over 20 million pounds. So those are the ones we look at, and obviously we're very confident that we can return £10 million in shareholder returns, as we've just announced today, and still be comfortable within our financing facilities and cash facilities.

Okay, thank you. A question on M&A. I'm impressed by the bolt-on deal of Glenart. You talked a bit about this during the presentation. Could you talk a bit more broadly about what it brings to the group and where you see Glenart adding to the long-term future of the business.

Yeah, I think for a long time, I mean, driven a little bit by the retailers, we've been looking at alternative sourcing solutions as opposed to from the forays. And so I think we came across Glenart a couple of years ago, and it was interesting because it actually would allow us to source crackers, which is what they, customs crackers, which they predominantly produce at a lower cost. as we'd exited from our Chinese facility and we were reliant on outsourcing all the crackers. So, the initial interest was all around getting a lower sourced cracker production capability outside of China. The other benefit of this, of course, is actually the lead time is about two-thirds of what it is from China. So, it gives us greater flexibility. That was the primary reason for engaging with them and the team in our environment as part of this. We did a very good job in working with Miles and the team there and coming up with a plan. But what became apparent beyond that is a couple of other opportunities. Secondly, the fact that they've got excellent boots of market with three major retailers in South Africa. And we've already explored the rest of our portfolio with them and some genuine interest about sourcing other products from the design group portfolio out of the UK. So that's something we're exploring and we hope we may even get a trial of our money for this Christmas. And then the third element, it actually gives the opportunity to maybe produce other within the South African facility as well. So we're very excited about the opportunity of, you know, about what this brings to the group and what the opportunities may well be. And I think by the time we get to the half year, we'll have a clearer plan of how we can fully leverage that. Is there anything else?

No, I mean, you know, we already said it was earning and haunting from the first, you know, from the beginning, a really profitable business, 25% of the dollar margin, so a really profitable business. that we can really utilize within the group. So this is clearly one of the ones you spoke about in the capital education policy that is very selective and strategically aligned.

Okay, that's great. Thank you. Just as a reminder to the audience, we're running on our last couple of questions. Now, if you do have any more questions, please use the Q&A tab at the bottom of your screen. Next question is, is IG design broadening its supplier base from China to improve supply chain resilience?

I think it's not so much broadening. I think really it's actually we've been trying to bring, a lot of it was done individually and we've now tried to centralise that across the group in a more innovative fashion than we had previously. I think it's an opportunity for us to leverage the existing supply base we have. One of the challenges, of course, that's always coming out of Asia is actually ensuring you've got an ethical supply chain and it meets the requirements from a technical and quality standard. And so we've got some very good suppliers. I think the bigger opportunity is to consolidate more of what we're doing through those suppliers that we have those strategic relationships with, and that's what we're currently exploring.

Okay. Thank you. Next question is, what is the status of the Americas units Is a sale or are any further funds expected from this?

Yeah, the American units, I mean, Kilco disposed of a number of the entities. The remaining bit was then put into a Chapter 11. That Chapter 11 process continues and we are not expecting any further outcome. We basically said we don't see anything coming from that process. I think it will be concluded sometime during next year but we can't really say but at the moment I think most of what Hilco have done has been concluded and we're quite confident I think that there won't be an outcome.

Okay. Thank you. Understood. And the last question we currently have I think you may have already covered this earlier talking about working capital but I'll ask the question anyway. Given that the working capital cycle is now fully financed where do you see the current levels of excess or surplus cash?

I think pretty much what we said earlier on with regard to working capital. I mean, the company's got a working capital cycle. We're very happy with the facilities we've got in place. I think we've got a really good facility that we can utilise. And I think, you know, we've got a clear plan of how to return the excess cash we've spoken about to shareholders. But, you know, we have got a very strong balance sheet to go forward. And I think given the capital allocation policy we've announced, we've got the opportunity to invest in everything that we've basically laid out within this. you know, we'll continue the journey that we basically set with the excess cash. But like I said, even given the 10% share buyback today and the dividends, we're still in a very strong position going forward where we won't need to go into our facility, we don't think, for the next year.

Okay, that's all very clear. Thank you. There are no further questions at this time, so I'll just hand back to Stuart for any final closing remarks, please.

Okay. Well, thank you very much for joining us this morning in the interest and business. I think What I'd say is that, you know, last year we set out to say that we wanted to under-promise no-dealers, and I think we have achieved that over the last 12 months in all the key metrics. I'd also say, having been with us five years now, this is the best shape this has ever been in. And I say that for two reasons. One is it has But more importantly, the fact that we've been able to return, you know, capital and dividend return to our shareholders. Again, we gave that commitment. We're delighted to be able to announce the share buyback and also the dividend. So, you know, I think we're in great shape for the future. We remain somewhat cautious because of the macro effects out there. But we're very, very clear that we're in charge of our own destiny. So thank you for your help and support and we look forward to the future.

Fantastic. Thank you very much indeed. Thank you all for attending. This is the end of the webinar.