Opinion: When your financial position is grim, you have two options - crawl into your shell hoping nobody notices and issue a stark, economy-style annual report, or blow away the doldrums by focusing on the products and illustrating them in the most tantalising way.

Waterford Wedgwood, the luxury giftware group, which faces shareholders at its annual general meeting in 13 days' time, rightly adopted the latter. And how! In sharp contrast to last year's dull annual report, this year's 64-pager contains no fewer than 10 full colour pages, each with over half a dozen pictures of products. All positive stuff.

But the report has some curious items, most striking of which is the group chief executive's annual statement for the year to March 31st, 2005. Striking because it is written by Peter Cameron, who only took over from Redmond O'Donoghue a month ago.

Surely O'Donoghue, who signed the accounts, should have outlined the story of the year's trading under his control, not someone who took over that position five months after the year end?

Analysts have given the thumbs up to Cameron's appointment, and it is easy to see why. As chief executive of All-Clad, the high-quality US cookware group, he was the only executive director of Waterford Wedgwood to receive a bonus in 2003-2004, and this year received a €2.6 million bonus for his role in selling All-Clad, the most profitable part of the group.

That sale was essential for the financial well-being of the group. Figures in the annual report illustrate this.

The reported loss before tax of €149.2 million in 2004-2005, compared with a loss of €44.9 million in 2003-2004 was bad enough but, if the profit of €103.2 million on the sale of All-Clad business is taken into account, the underlying loss was a whopping €252 million.

Without the All-Clad sale, it would have had negligible net assets.

And the consolidated cashflow statement indicates the then looming financial pressures. It had, for example, a net cash outflow of €42.6 million from operating activities. Net debt at year end amounted to €279.4 million.

This was down on the previous year of €382.9 million. However, the latest figures included an injection of €194.6 million (net of expenses) from the sale of All-Clad. Without that, the net debt would have been around €470 million.

Is it any wonder that the two major shareholders, Sir Anthony O'Reilly and his brother-in-law, Peter Goulandris, had to dip into their pockets and underwrite a €100 million rights issue?

At the annual general meeting, the company should be in a position to give a good idea of its performance in the first six months to the end of September 2005. These results are likely to be as bad or even worse than the underlying figures for the past year.

It is worth noting that group sales have fallen by 28 per cent since 2001. Last year continuing operations were not even able to generate sufficient gross profit to cover its distribution costs.

It is pretty clear in the annual report that the onus for the profitable development of the group now lies firmly on Cameron's shoulders.

The more optimistic Waterford Wedgwood watchers are convinced that the benefits from the redundancy and rationalisation programmes and cash injections will result in better results in the second half.

However, the more cynical will say the group will continue to struggle and, so far, they have proved to be right.