Troubled luxury goods maker Waterford Wedgwood has revealed a narrowing of its pretax losses saying the sales decline seen in recent times had been largely "arrested".
The company, which has laid off 1,800 people, terminated the manufacture of some low-margin products and signed up celebrity designers and chefs in a bid to improve its performance, saw its pretax loss narrow to €20.7 million in the six months to the end of September, from €94.5 million in the year-earlier period.
Operating profit, which includes an exceptional gain of €18.8 million related to the curtailment of a pension scheme and the sale of property, stood at €4.9 million, compared with a loss of €69.4 million last year.
Sales meanwhile were just 1.6 per cent down on the prior period at €352.5 million, when compared using constant exchange rates.
Chief executive Peter Cameron welcomed the figures, saying they represented significant progress towards an improved performance. "Our unwavering focus on reducing our cost base, and on contemporising our brands has put Waterford Wedgwood on the road to recovery," he said.
Reiterating comments made at the group's agm last month, he said the company had had its best September sales in three years. Sales at Waterford Crystal in the US - the brand's largest market by far - were up 22 per cent on the same month last year.
October and November have continued in the same vein and Mr Cameron said he was positive about the outlook for the group as a whole. Since that original announcement, the company's shares have risen 75 per cent, though they are still worth only 7 cents each.
Waterford Wedgwood is part way into a restructuring plan aimed at saving €70 million this year and €90 million a year thereafter. By the end of March it will have cut its staff by 2,200, closed factories and shifted ceramic production to Indonesia.
However, Mr Cameron said one of the main contributory factors in the improved results is the increase in margins by 6 percentage points, to an average of 44 per cent.
The group is aiming to raise that to at least 50 per cent, and one that compares with 60 per cent-plus generated at top-luxury brands such as Gucci.
Analysts were cautious on the results, welcoming the reduction in the cost base, but anxious to point out that this isn't the first time the group has said things are getting better.
John Sheehan, an analyst at NCB, said that while new products and outlets were expected to boost sales in the second half, resilience over Thanksgiving in the US and Christmas will be key to the future performance.
At the end of September, net debt stood at €398.2 million.
