Waterford shareholders see ray of hope

Waterford Wedgwood's long-suffering shareholders have been offered a glimmer of hope that they may see a return to profit next year and possibly a dividend.

Addressing the group's annual general meeting in Dublin yesterday chief executive Peter Cameron said sales in the first half of 2005 were down about 7 per cent on a like-for-like basis compared with the same period in the previous year. Overall group sales are running ahead of last year because of the contribution of the Royal Doulton acquisition.

"2006 is when our cost reduction and restructuring plans get implemented. When the restructuring is in place I think we will have the elements to return the company to profitable operations," Mr Cameron said. "I would expect profits in 2007."

The struggling crystal and china maker's restructuring plan began in August and includes the closure of its manufacturing facility at Dungarvan, Co Waterford. The plan is expected to yield savings of €90 million this year, he said.

Mr Cameron ruled out any further production outsourcing saying its remaining facilities in Ireland and the UK were as competitive as any other worldwide location. The remaining cost reductions within the restructuring plan will be achieved by tackling overheads, he said.

The group is beginning to introduce new products to its Waterford Wedgwood, Rosenthal and Royal Doulton brands. "I remain optimistic of the long-term effects of the restructuring and equally important a number of new business initiatives. I am confident that the restructuring will significantly lower our costs. And our new business initiatives are positioned to increase our revenues," he told shareholders.

Waterford Wedgwood shares closed unchanged in Dublin at 6 cent.

Its chairman, Sir Anthony O'Reilly, who along with his brother-in-law, businessman Peter Goulandris, is the company's biggest shareholder, said it had been a difficult three years but steps had been taken to ensure profitability and growth.

The more than 200 shareholders in attendance aired a few gripes during the lengthy meeting, with the company's decision to abolish their 15 per cent discount on its products topping the list. They were assured this would be re-instated when the company returned to prosperity.

There was also some criticism of the lack of gender balance on its board of directors, with more than one shareholder pointing out that Waterford Wedgwood's primary customers were women.

Sir Anthony said that while there had been a number of vacancies on the board this year it did not have a short-list of female candidates. He said his wife, Lady Chryss, the sole female director, was equal to having 10 others.