Richemont group sales gains 11%

26 Dec '07

4 min read

Richemont, the Swiss luxury goods group, announces its unaudited results for the six-month period ended 30 September 2007.

Group sales increased by 11 per cent to € 2 548 million. At constant exchange rates, sales growth was 16 per cent, including particularly strong growth in the Asia-Pacific region.

Operating profit from Richemont's luxury goods businesses increased by 28 per cent to € 560 million. The significant increase reflected the increase in sales, an improvement in gross margin and operating leverage.

Net profit, including the Group's share of the results of British American Tobacco, increased by 28 per cent to € 824 million. Earnings per unit attributable to unitholders on a diluted basis increased by 27 per cent to € 1.445. Excluding the impact of non-recurring items reported by British American Tobacco in both years, net profit attributable to unitholders increased by 22 per cent to € 821 million.

During the period, cash generated by operations was € 268 million and the Group received dividends from BAT totalling € 338 million. Net cash at 30 September 2007, after the payment of the ordinary and special dividends of € 689 million, amounted to € 904 million.

The Group's results for the first half of the year are very satisfactory. Sales of luxury goods increased by 11 per cent and further margin improvements have resulted in Operating profit growth of 28 per cent to € 560 million for the six-month period. In general, the market for luxury goods has remained favourable and Richemont has been well positioned to take advantage of this with its first-class portfolio of Maisons and broad geographic footprint.

The Jewellery Maisons reported 9 per cent sales growth. Cartier continued to develop its business, both in established markets and in new markets such as China and Russia. The sales performance at Van Cleef & Arpels was very strong during the period under review, albeit from a much smaller base than Cartier.

Sales of the Group's Specialist Watchmakers grew by 18 per cent during the period, with excellent performances reported by IWC and Jaeger-LeCoultre. The strong demand for watches featuring high quality mechanical movements seen by the Swiss watch industry as a whole has led to some supply constraints in terms of components. Dependent upon the level of demand, these shortages may limit sales of specific product ranges during the second half of this year.

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