Waterford Wedgwood down 10% on US jitters

Friday 26 January 2007 21.34

Shares in Waterford Wedgwood were down 10% this afternoon as the impact of yesterday's US disaster sparked fears for the outlook of this heavily US focussed company.

The fall to 85 cents per share - up on earlier levels of 77 cents - came as the company reported a 6.6% fall in first half pre-tax profits to 17 million euros on 3.4% higher sales of 462.3 million euros.

Chief executive Redmond O'Donoghue said it was a good performance in tough conditions, but conceded the future outlook was very hard to predict.

44% of Waterford Wedgewood revenues come from the US market, whilst 60% of its Irish sales depend on visiting tourists.

O'Donoghue expressed sympathy with America, and said he expected a resilient and balanced response from the business community.

The former chairman of Bord Failte said tourism in Ireland would undoubtedly be hit by the US attacks, but expressed hope that the situation would recover as rapidly as tourism was able to recover following the Gulf War.

Looking in more depth at the company figures, operating profits rose slightly to 29.7 million euros but higher interest payments resulted in a fall at pre-tax level. Earnings per share were down 5.4% to 2.12 cents. An interim dividend of 0.7 cents has been declared.

Chairman Tony O'Reilly said trading conditions in the period had been difficult, particularly in the US, where group sales fell 10%. A drop in sales of Millennium crystal had been expected.

The company says sales grew strongly in Europe, particularly in Germany, where Waterford owns the Rosenthal glassware company.

Sales in Waterford's ceramics business rose by 13.2% in the first half, boosted by growing Rosenthal sales. Overall crystal sales were down 8.7% after the phasing out of Millennium products, but when the impact of this was excluded, core sales grew by 3.8%.

Waterford said conditions in the US had weakened in July and August. It added that it would be 'constantly reviewing' the company structure and would take 'appropriate action' to protect profits should the economic climate worsen in the rest of the year.

'We've had some tough conditions, but our big trading months are coming up and we'll be watching trends,' chief executive Redmond O'Donoghue said.

Waterford shares closed in Dublin this evening at 85 cents - a drop of nine cents on the day.