Waterford Wedgwood's performance over the immediate future will be strongly influenced by Wedgwood's performance. Mr Brian Patterson, chief executive of Wedgwood, was not providing any clues yesterday as he would not say when the downward profit trend of the china and earthenware subsidiary would be arrested. Wedgwood's operating profits fell from £5.7 million to £4.9 million in the first half due to its exposure to Asia and to Japanese tourists, and the strength of sterling. Sales to Japan were down 4.2 per cent and they could be down some 9 per cent for the full year. So there is unlikely to be much relief on the sales side.

The expectation, therefore, must be for a fall in the operating profit for the full year. However, the drop is unlikely to be severe as it faces the traditionally more lucrative second six months. Also the company has refocused the business to improve margins. That is essential as its margins are less than half the level generated by Waterford Crystal. On a more positive side, Waterford Crystal's sales and profits are continuing to bound ahead. And margins will continue to widen.

Rosenthal is now in the black. However, its contribution in the full year is unlikely to be material. The overall expectation must be for a small increase in group profit before tax and exceptionals, from 1997's level of £40 million.