ROYAL Worcester Porc-elain says it is now in a much healthier position after 18 months of job losses, bad financial results and property sell-offs.

The company, which employs almost 200 people at its Severn Street headquarters in Worcester, made a small financial loss last year.

The disastrous results led to a restructuring which saw 100 redundancies announced in November 2003 and 100 more at the end of last year.

It also sold off swathes of its property to developers.

Peter Watson, the sales and marketing director of Royal Worcester, said the company, which has an annual turnover of around £45m, had made significant changes and rejected the view the industry was in terminal decline.

"When you make losses you can do one of two things," he said. "You can either do nothing and continue as you are, or do something positive to move the business forward, which can be painful."

Royal Worcester has seen a dramatic slow-down in its mid-priced tableware, alth-ough prestige goods and the business-to-business market is continuing to hold strong.

Mr Watson said the "fickleness" of the middle market was where many of the problems lay.

"The top end of the market is buoyant but it's people in the middle market who are finding things difficult," he added.

Royal Worcester is just one of many companies in various industries which, anecdotally, seem to be beginning to feel the pinch.

The Severn Street firm finds it more difficult because, Mr Watson says, they are trying to sell "luxury" products to people who need to pay the mortgage first.

The industry as a whole has been affected. Royal Doulton, traditionally Royal Worcester's biggest competitor, was bought out in December, by Waterford Wedgwood, which itself has made hundreds of redundancies.

Despite orders for prestige products stretching well into 2006, Royal Worcester knows the secret of its success lies in its cheaper merchandise.

New ranges by TV chef Jamie Oliver, and modern artist Govinder Nazran may not be what Royal Worcester is renowned for, but it is a sign that all companies - even those over 250 years old - need to watch the market closely and change to survive.

l See tomorrow's Worc-ester News for how Royal Worcester Porcelain is looking to the future.