Waterford Wedgwood has reported a 4.6% dip in annual sales to €951.3m as the global uncertainty continues to hit the luxury goods group.
Waterford said its operating profit rose to €64.2m for the year ending March 2003 from €56.5m in 2002. Its pre-tax profits before exceptional restructuring costs and goodwill came in at €38.9m, up 24% from the previous year's figure of €31.3m.
Due to competitive pressures in the earthenware segment of the ceramics market, Waterford Wedgwood said it will close its two Johnson Brothers factories in the UK with the loss of 1,058 jobs. Production will move to its out-sourced plants in Asia.
This will result in reduced costs of €28.7m on an ongoing annual basis for an exceptional restructuring charge of €35.7m in the financial year 2003 and €28.7m in 2004.
The company's Wedgwood-branded earthenware will continue to be crafted by Wedgwood in the UK. Currently manufactured in the two UK factories due for closure, production will be transferred to Wedgwood's existing factory at Stoke-on-Trent.
Waterford Wedgwood said its trading environment continued to be tough in April and May with sales down 10% on the previous year. The company said there are signs of improving consumer confidence returning in the US, although it still anticipates a difficult first quarter. The US is a key market for company sales.
'A combination of a competitive cost base, innovative product strategy and improved capacity utilisation will result in a swift upturn in profitability when demand grows again,' Chairman Tony O'Reilly said in today's results statement.
Group chief executive Redmond O'Donoghue said that Waterford Wedgwood's crystal brands continued their dominance of the world's markets, showing market share gains in the US, UK and Ireland. While sales of €314.3m were down 4.6%, operating profits rose 29%.
Sales of ceramic products were down 5.3% to €414.2m with the German market proving particularly difficult throughout the year. Waterford said the launch of the Vera Wang range and the performance of the Jasper Conran range made a significant contribution to sales.
The company's premium cookware sector had an 'outstanding' year with sales up 43.6% and profits doubling. The group's brand extensions are grew notably during the year. W-C Designs increased sales by 24%, while jewellery sales were up 13% and Waterford Crystal's Holiday Heirlooms range was up 19%.
Waterford said that given the current trading environment, the uncertain outlook and the impact of the Johnson Brothers restructuring, the Board has decided to propose a final dividend of 1.2 cents, down from 2.4 cents in 2002. The proposed annual dividend will be 1.9 cents, down from 3.1 cents the previous year.
Waterford Wedgwood shares closed unchanged at 23 cent in Dublin.