Buoyant trading, helped by a recovery in Asia and a strong contribution from US acquisition, All-Clad, enhanced Waterford Wedgwood's pre-tax profit by 31 per cent to €18.2 million (£14.3 million) in the six months ended June 30th 2000. Sales grew by 30 per cent from €342.6 million to €447.0 million, in line with expectations. The shares rose three cents to €1.29 following publication of the results.
The company also revealed it had paid €10.2 million for its recent acquisition of German porcelain and giftware brand, Hutschenreuther. The consideration represents 20 per cent of 1999 sales of €50 million and is expected to be earnings enhancing in the first year.
It has only acquired the brand, current inventory, the intellectual property rights as well as the lease of Hutschenreuther's five distribution outlets. The new subsidiary will be integrated into the group's other porcelain subsidiary, Rosenthal.
Waterford Wedgwood's crystal sales increased by 18 per cent from €150.4 million to €178.0 million in the first half, while ceramics which includes Wedgwood and Rosenthal had the same percentage increase, from €171.4 million to €202.7 million. The biggest percentage increase came from "other" which includes a first six months contribution from All-Clad, the US cookware company; sales rose by 219 per cent from €20.8 million to €66.3 million.
Earnings per share grew by 30 per cent from 1.73 cents to 2.24 cents. Shareholders are to benefit from the good results with a 15.5 per cent increase in the interim dividend from 0.57 cents to 0.66 cents.
The crystal division accounts for 40 per cent of sales and the particularly strong growth in 1999, helped by new millennium products, has continued into this year. Mr Redmond O'Donoghue, chief executive of Waterford Crystal, noted suggestions that crystal sales could run out of steam. The millennium "is not as important" now, he said, but "we are wringing every last drop out of the millennium". New products account for 40 per cent of sales. Waterford Crystal brand sales increased by 21 per cent with sales in the US up 6 per cent, a rise of 10 per cent in the UK, the Republic up 18 per cent, and an increase of 23 per cent in Australia.
Chairman Dr Tony O'Reilly said new product development continues as the key driving force of the growth. Brand extension continued to grow with John Rocha sales up 37 per cent to €5 million and Jasper Conran sales were ahead of targets with sales of €1.7 million. The group's line and brand extensions now account for sales of €38 million, representing an annual increase of over 80 per cent.
In ceramics, Wedgwood's growth at 22 per cent was ahead of the division's average of 18 per cent. Mr Brian Patterson, chief executive of Wedgwood, said the trading period represented a "gear shift" for Wedgwood and this was driven by the US, Japan and Asia. Sales in the US market were up 15 per cent, "a highly encouraging development due to continuing new product introductions and to the energetic promotional efforts of Sarah, the Duchess of York", said Dr O'Reilly.
The recoveries in the Asian and Japanese markets were important influences; Asian sales went up by 78 per cent while sales in Japan increased by 15 per cent. In Europe, sales were up 15 per cent, but in the UK and Republic there was only a marginal increase of 3 per cent.
Despite problems in the German market, Rosenthal recorded a 5 per cent increase in sales. But the porcelain products company had a much better performance in the US where sales increased by 29 per cent. Rosenthal has launched a number of new product ranges and has also benefited from the continuing success in sales of its Bvlgari and Versace luxury ranges.
In other products, All-Clad, the US cookware subsidiary, "made a significant contribution to the company's half-year results and achieved outstanding first half sales of €43.2 million, up 40 per cent", according to Dr O'Reilly. Mr Richard Barnes, group finance director, said €5 million was spent on addressing the capacity problems. The Emeril Lagasse range was launched in May and sales so far have amounted to €2.2 million. Cutlery first-year sales topped €0.5 million, he added.
