Waterford Wedgwood plans to raise up to €200 million from shareholders to help fund a new round of job cuts and to bolster the marketing spend on its range of luxury goods.  Ciarán Hancockreports

The company said yesterday that it intends to raise €100 million, before expenses, by offering cumulative convertible preference shares to existing investors.

Chairman Sir Anthony O'Reilly and his brother-in-law Peter Goulandris, the company's deputy chairman, have agreed to subscribe for their entitlement of 51.35 per cent of the equity. Birchfield, a company they jointly own, will underwrite the balance.

By way of dividend, shareholders who subscribe to the open offer will receive eight new preference shares for every 100 they hold annually for the first five years. After that period, an 8 per cent cash dividend or additional shares will be paid, subject to Waterford Wedgwood's approval.

Shareholders will also be asked to give the company approval to raise an additional $100 million in preference shares on the same terms as the current offer at some point in the future.

Waterford Wedgwood said details of the fundraising would be issued to shareholders in "due course". Their approval will be sought at an extraordinary general meeting.

This is Waterford Wedgwood's fifth rights issue or open offer since 2003 and will bring the amount raised by the company to €400 million. Waterford Wedgwood said "a range of opportunities for further rationalisation" had been identified during the last redundancy programme in May 2005. That plan "is on track to achieve annual savings of €90 million at a cost of €90 million".

Waterford Wedgwood also released results yesterday for the nine months to the end of December 2006. These showed that group sales fell by 3.9 per cent over the same period of 2005 to €574 million. Losses narrowed to €47.2 million during the nine-month period compared with €118.1 million a year earlier. The company continues to suffer from the weakness of the dollar.

The crystal and ceramics divisions experienced contrasting fortunes. In the April to December period last year, Waterford Crystal earned an operating profit of €14.6 million compared with a loss of €13.4 million in the same period of 2005.

Sales, however, declined by 2.9 per cent to €161.6 million. "Waterford has made significant progress in right-sizing its cost base, has arrested its sales decline and has the initiatives in place to make its products ever more appealing to consumers," the company said.

In the ceramics division, which comprises Wedgwood, Royal Doulton and Rosenthal, a loss of €14 million was incurred, half the level of the same period in 2005. Ceramics sales declined by 4.8 per cent to €382.2 million, reflecting continued difficult trading in its key markets of Germany and the UK.

John Sheehan, an equity analyst with NCB, said there had been "no meaningful improvement" in the results in spite of numerous restructurings. "It's a very challenging environment for the group," he added.