Despite the lacklustre first half results, Waterford Wedgwood is heading into the second, and more important, half with confidence. Finance director, Mr Richard Barnes, says he is comfortable with brokers' projections. This implies a 20 per cent-plus rise in pre-tax profit from £28.1 million to at least £34 million. To achieve this, the second-half profits will have to rise by 28 per cent. As many of the costs came into the first half, and most of the profit surge will be in the second six months, this is well within its capabilities. Waterford Crystal, which is on a upward trend, should continue with a solid performance. Further profit growth should come from product developments, new products and a further push in its existing markets. Outsourcing will become an increasing part of the crystal business and the company is to continue to keep pressure on costs. Stuart Crystal, purchased in 1995, has yet to make its mark. It returned to profits of £368,000 in the first half which contrasted with a loss of £19,000 in the first half of 1996. A lot more is to be squeezed out of this company. Much more is also expected from Rosenthal, the German porcelain manufacturer, in which it has a 26.2 per cent stake. Losses have been reduced from DM10.7 million to DM7.8 million in the first half. It could be next year before there is any prospect of profits, but clearly this company has a lot of potential.

Wedgwood, the fine bone china group, dragged down group growth in the first half. How it performs in the second six months will be crucial to the outcome for the full year. The reduction in operating profit, from £6.3 million to £5.7 million, was directly due to adverse currency translations. Extra costs were also loaded in the first half. These included marketing and distribution costs of £2.3 million and further cost reductions. Some of the benefits should come through in the second six months. Overall, Waterford Wedgwood is heading for stronger growth in the second half. The movement of currencies could still have an impact but it appears to be fairly fully hedged. It is 96 per cent hedged, at $1.59 in the pound/ dollar rate; 94 per cent, at $1.56 in the dollar/ sterling rate; and 82 per cent, at 155.71 in the yen/sterling rate.