SHAREHOLDERS in three of the biggest guns in Irish business suffered information overload this week when Jefferson Smurfit Group, Waterford Wedgwood and CRH peppered the stock market with detailed breakdowns of half yearly trading. It would appear that the most successful companies in the present cycle of supply and demand are primary producers of consumer products, such as Waterford Wedgwood, its excellent results due in part to the general resurgence in consumer confidence and spending power.
One would expect that businesses riding alongside the primary producers feeding in specialist services, like printing and packaging, would also benefit. But while the focussed Waterford Wedgwood profitably surfs the consumer boom the more globally spread Smurfit Group is buffeted by lower prices and overcapacity.
At Smurfit Group, where steady annual growth has for so long been almost a foregone conclusion, the 37 per cent slippage in pre-tax profits to £126 million, although well signalled, must come as a shock. But at least Smurfit performed better than its competitors in managing the downturn and the group hopes to benefit from price increases in containerboard in the US and Europe.
But price rises, if they hold, will come too late to prevent further earnings weakness. Any recovery is most likely to show through next year, the outlook clouded by the likelihood of more rapid price fluctuations.
Shareholders are cushioned from the worst of the fall-out with a 7 per cent higher interim dividend of 1.5p a share.
Waterford Wedgwood, also no stranger to hard times, emerged revitalised from a painful restructure with a new product, a fresh marketing approach and the technology to produce more cost-effective products. With 90 new glassware products on the shelves Waterford Crystal's sales rose £14.6 million to £61.5 million producing a £0.6 million rise in operation profits.
Opportunistic marketing for revellers ushering in the new century is behind the specially-decorated "millennium flute " champagne glass, the biggest-selling crystal product. Americans are [snapping them up at $99 a pair.
Although tough competition held back sales growth at Wedgwood to a modest 4 per cent in sterling terms, profits rose £700,000 on turnover of £102 million. For the group as a whole pre-tax profits surged 28 per cent to £9.5 million on an 8 per cent rise in turnover to £163 million. Interim dividend goes up from 0.25p to O.3Op a share.
Size matters at CRH where the global spread of its business enables the group to balance strength in some markets against weakness in others. Half year profits rose 13 per cent to £64 milion and chief executive Don Godson anticipates "a further year of progress". Accompanying the interim figures came confirmation that CRH has acquired the US Tilcon building materials group for £213 million, its biggest-ever acquisition.
