Waterford Wedgwood Plc reported a narrowing in first-half operating losses today and said it was on track for a return to profit in 2007.
The crystal glassware and china maker firm, which is recovering from a prolonged slump in demand, said it was benefiting from new products that were being distributed more effectively, leading to an arrest in sales decline, and from rigorous cost savings.
Best known for its Waterford crystal and Wedgwood and Royal Doulton ceramics, the group had an operating loss in the six months to end-September of €13.9 million before exceptionals, compared with a loss of €37.9 million in the same period of 2005.
Goodbody Stockbrokers had forecast a loss of €10 million, while NCB Stockbrokers' estimate was €15 million.
The group has largely arrested its sales decline. It reported first-half sales of €352.5 million, down 2.8 percent at prevailing exchange rates, or 1.6 per cent at constant exchange rates, on last year.
Waterford Crystal made an operating profit of €7.8 million before exceptionals versus a loss last year of 1.4 million - the first time in three years the division has been profitable in the first half.
In ceramics, which has launched new ranges by celebrity chefs such as Britain's Gordon Ramsay and well-known designers, the group made an operating loss of €15.8 million before exceptionals against a loss of €31.9 million last year.
Sales trends in October-November were similar to the first six months, the company added.
"Key in terms of the business is that the gross margins have gone up 6 or 7 percent depending on which business you look at...through appropriate pricing as well as cost reductions," Chief Executive Peter Cameron said in an interview.
He said a restructuring programme announced last year aimed at taking out an annual 90 million euros in costs was "on track and if anything it's a little bit ahead of schedule".
He reiterated that profitability in 2007 was still the firm's intention.
"I think we're on the plan...we said we'd be here and we're at the turn where we belong and we're still focused on the same result," Cameron said.
He declined to give specific guidance for the full year.
Shares in the company, which is chaired by Irish billionaire Tony O'Reilly, rallied after it said at its annual meeting last month that sales of its crystal products were up 22 percent in the United States, its biggest market, in September.