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Waterford Wedgwood: optimistic future, despite flat pre-tax profits

18 March 1999: Irish glass and chinaware group Waterford Wedgwood Plc announced flat annual pre-tax profits before exceptional items, but said its restructuring and investment in luxury brands would p…

18 March 1999: Irish glass and chinaware group Waterford Wedgwood Plc announced flat annual pre-tax profits before exceptional items, but said its restructuring and investment in luxury brands would position it well. “Assuming the world of the next century builds on the aspirations of the last, we look forward to increased prosperity in the years ahead,” Chairman Anthony O“Reilly said in a statement. In 1998, pre-tax profit before exceptional items totalled 40.2 million punts (US$ 57.64 million), fractionally up from 40 million a year earlier, on group sales of 575.3 million, up 37.9% including newly-acquired German unit Rosenthal. The company incurred an exceptional provision of 24.6 million punts, down from 27.8 million a year earlier, to cover restructuring and other costs. Company officials said Waterford Wedgwood was not expected to make an exceptional provision in the 1999 accounts. By division, the company said its Waterford crystal business boosted sales by 17.8% last year and operating profits by 40% to 33.1 million punts, helped by a strong performance in the US. Sales at Wedgwood china and ceramics, however, dropped 5% at constant exchange rates, and operating profits fell 35% as the Asian crisis continued and the strong pound hit exports to continental Europe. Sales in Japan fell 6% and were down 32% in the remainder of Asia. Some 15 million punts of the group“s total exceptional provision has been allotted to Wedgwood for restructuring. The division plans to cut 500 jobs this year, of which 260 have already been shed. At Rosenthal, operating profit doubled to DM 8.5 million (US$ 4.74 million) on a 2.6% rise in sales to DM 321.4 million. The company said the German unit had good potential for profitable growth. The company plans to pay a second interim dividend of 1.4 pence per share, making a total of 1.8 pence for the year, up from 1.6 pence previously.

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