DESPITE difficulties in Britain and continental Europe, Waterford Wedgwood, the crystal and fine bone china group, increased its pre tax profit by 28 per cent from £7.4 million to £9.5 million in the six months ended June 30th, 1996. Both Waterford Crystal and Wedgwood contributed to the profit growth.

Group sales rose by 8 per cent from £1.5 0.9 million to £163.2 million. Profit margins widened from 4.9 per cent to 5.8 per cent. The performance was "in line with our plans", said Mr Richard Barnes, group finance director.

Although some markets proved to be difficult, there was an excellent performance" in the US, Japan and Ireland, said chairman, Dr Tony O'Reilly. The group's overall marketing strategy "is proving to be globally successful" and the "international reach of our brands enables the group to cope more easily with localised fluctuations in demand". If Dr O'Reilly takes up the option to buy out the remaining Morgan Stanley stake in April, 1997, he and his family will have a 27.5 shareholding in Waterford Wedgwood.

The group was helped by the introduction of new products, and benefits from manufacturing investment continued to flow through. Growth at the pre tax level was partly helped by a reduction in the interest bill from £2.7 million to £1.9 million.

Shareholders are to share in the profit increase which was broadly in line with expectations. The interim dividend is being raised from 0.25p net per share to 0.30p. The tax rate fell from 22 per cent to 17.9 per cent and this was partly responsible for the higher growth of 32 per cent in earnings per share which rose from 0.82p to 1.08p.

Although net debt rose from £54.7 million to £56.9 million, gearing continues to improve. It now amounts to 37 per cent, down from 41 per cent in 1995.

Sales generated by Waterford Crystal rose from £46.9 million to £61.5 million while operating profit grew from £4.5 million to £5.1 million. Operating margins dropped from 9.6 per cent to 8.3 per cent.

The crystal company is now showing benefits from the £20 million investment pro of the past three years, said chief executive, Mr Redmond O'Donoghue.

Sales of the cheaper Marquis brand rose by 31 per cent. Waterford Crystal introduced 90 new products while Marquis brought 47 new products to the market. Out sourcing now accounts for 25 per cent of sales. The biggest selling crystal product is the flute glass launched in 1995. It plans to sell 132,000 pairs, which sell for $99 a pair this year, according to Mr O'Donoghue.

Although the US market was not particularly buoyant, with an estimated 3 per cent growth in the market, Waterford increased its sales of crystal by 17 per cent and Marquis by 29 per cent. Its market share (of the $10 plus crystal glass market) increased to 39 per cent. Sales to Japan grew by 34 per cent while sales in Australia rose by 14 per cent. Sales in Ireland were buoyant and the group expects 260,000 tourists to visit its visitors centre in Waterford this year - more than double the number in 1992.

Wedgwood sales fell from £104 million to £101.7 million while operating profit grew from £5.6 million to £6.3 million. However, bin sterling terms, sales showed a 4 per cent rise. This was "fuelled by new products", said Mr Brian Patterson, Wedgwood's chief executive. A breakdown of the products showed a 6 per cent rise by Wedgwood while Johnson Brothers sales fell by 7 per cent. Sales in Japan grew by 18 per cent (24 per cent for the Wedgwood product). Sales in the Pan Asian market rose by 69 per cent (84 per cent for Wedgwood). This market is small but is "growing like a rocket", Mr Patterson said.