Waterford Wedgwood expects to make a profit at an operating level this financial year after more than halving its pretax loss in the year to the end of March and seeing ongoing demand for its new range of products.
The company, which has undergone a significant restructuring aimed at reducing costs and modernising its somewhat outdated product range, also said it will be seeking out potential new shareholders who would be interested in participating in a second €100 million fundraising.
At a recent egm, Waterford received shareholder approval to raise as much as €200 million through a share sale, €100 million of which is already secured and underwritten by the group's chairman Sir Anthony O'Reilly and deputy chairman Peter Goulandris. It is unclear whether the two men will participate in the second fundraising.
Speaking yesterday, chief executive Peter Cameron said that being profitable at an operating level in this financial year was "achievable." This compares with an operating loss before exceptional items of €14.9 million in the year to the end of March.
The pretax loss for the period was €70.8 million, an improvement on the €189.4 million loss recorded in the financial year ended March 2006.
Sales at constant exchange rates slipped 1.5 per cent, to €741.5 million, although Mr Cameron attributed this to the group's decision to stop selling products at discount outlets. However, given the fact that Waterford raised its prices, the sales decline implies that volumes were actually down year on year. The margin increased by 6.3 percentage points to 47.7 per cent, still short of the 50 per cent target.
Mr Cameron said that overall, demand for the company's products is strong, although he did admit the retail environment in Germany is difficult. In the US, by far the company's biggest market, he said the group has not experienced any slowdown in consumer spending.
Waterford, which has been lossmaking at a pretax level for four years, benefited to the tune of €70 million from the restructuring, a figure that Mr Cameron says will rise to €90 million this year. In a bid to lower costs, the company has shifted some ceramic production to Indonesia, where labour costs are one-fifteenth of what they are in the UK, closed two factories and cut its workforce by 2,200.
