RICH CONSUMERS in Asia and the Americas buying luxury foreign watches and jewellery in ever greater quantities helped Richemont raise annual sales and profits well beyond market expectations.

The world’s second-biggest luxury goods group by sales said net profits for the year ending March 31st jumped 43 per cent to €1.54 billion on revenues that were up 29 per cent to €8.87 billion.

The Swiss group, best known for its Cartier jewellery and Jaeger-LeCoultre watches, said sales in April, the first month of its financial year, rose 29 per cent, or 20 per cent in constant currency terms, despite tough comparisons with the same month last year.

Richemont shares rose sharply against a lower market, trading up 6.56 per cent at 56.85 Swiss francs. The outlook statement from Johann Rupert, Richemont’s invariably conservative executive chairman, was reassuring for investors.

“While mindful of unstable economic conditions, particularly in the euro zone, Richemont is convinced of the resilience and long-term prospects of its maisons.

Jon Cox, Kepler Capital Markets analyst, noted: “Clearly better than expected with the outlook comment – given by a company that is notoriously downbeat with its outlook statement – remarkably positive.”

Further cheer came from the group’s decision to propose a 22 per cent boost to the dividend to SFr0.55 a share, and the fact that Richemont’s already reassuring net cash position had increased almost €600 million to €3.18 billion in the year.

While business was driven by Asia and the America’s, Europe also performed strongly in spite of the economic difficulties, with sales up 20 per cent.

Operating margins remained buoyant across the board, up 3.3 percentage points to 23 per cent for the group, defying a strong Swiss franc and rising costs for precious metals.

The margin for jewellery products – primarily Cartier, but also Van Cleef Arpels – reached a record 32.9 per cent.

René Weber of Vontobel noted: “Not just sales exceeded all expectations, but also the margin development.” – (Copyright The Financial Times Limited 2012)