Waterford chief expects profit by 2007

New product ranges and a EUR 90 million restructuring programme should see Waterford Wedgwood return to profit by 2007, new group chief executive Peter Cameron told shareholders 20 October 2005.
The …

New product ranges and a EUR 90 million restructuring programme should see Waterford Wedgwood return to profit by 2007, new group chief executive Peter Cameron told shareholders 20 October 2005. The luxury crystal and porcelain goods group has continued to experience a difficult trading environment and sales remain down by 7% in the 1H of its financial year. Mr Cameron said the company has targeted cost savings, and when fully implemented would make the group profitable at current or even lower trading levels. As well as cost reduction, the company aims to go forwards with the launch of a range of new products throughout Wedgwood, Waterford Crystal and Rosenthal. Mr Cameron added that the company“s restructuring and profitability plan did not foresee greater levels of manufacturing outside of the current locations in Ireland and the UK. He said the key drivers for company growth would be the US and Germany. High oil prices, a decline in the importance of traditional department stores, and a weakening dollar in the Unites States, where the firm makes nearly half of its sales, were among the factors contributing to tough trading conditions, he said. In a strong defence of retaining premium prices for its goods, Mr Cameron said Waterford Wedgwood was ceasing supplies of its premium price products to discount stores, which has accounted for around 3% to 4% of the fall in sales in the 1H of the year. Waterford Wedgwood aims to become a low-cost operator in all its markets, simplifying its product range and launching a number of more casual glassware and tableware ranges which would push growth through 2006 and 2007. He said the restructuring plan was just beginning in earnest. “Really, 2006 is when our plans get implemented … When restructuring is in place, I think we will have the elements to return to profitable operations. I expect profits in 2007.”