Analysis:On the whole analysts welcomed the improved performance revealed by luxury goods group Waterford Wedgwood yesterday, although they also said there is plenty of work to be done.

In a note to investors Goodbody, analyst Philip O'Sullivan said he was pleased with the results, which as well as being in line with the group's forecasts also highlighted the progress being made to turn the company around. He said the planned new round of rationalisation will be "integral" in determining the firm's success in achieving its goals of returning to profitable top-line growth, reducing costs further and lowering the high levels of net debt.

Others agreed, saying it remains to be seen whether the company can reap the benefits of its cost-cutting programme in the long-term, adding that the full effects won't be felt unless the company is successful in raising the proposed extra €100 million.

While they welcomed the decline in the company's pension deficit, which went from €283.7 million to €147.8 million, thanks to the strong performance of equity markets last year, analysts said high debt levels remain a concern. Net debt increased from €371.8 million at the end of March 2006, to €412.2 million at the end of fiscal 2007, though chief executive Peter Cameron said he hopes to bring this figure down to somewhere between €390 and €400 by this time next year.

Barry Dixon at Davy pointed out that orders at the start of June were €15 million higher than in the previous year, adding weight to the company's insistence that demand remains strong for its products. One Dublin dealer, however, expressed doubt that the introduction of yet more celebrity-endorsed product ranges would help the company in the long term.

The shares added 2.7 per cent, to close at just under 4 cent.