Waterford optimistic after successful cost savings

Click to follow
The Independent Online
WATERFORD Wedgwood, the luxury glass and ceramics combine, yesterday said it was on the road to recovery despite losing Ir pounds 17m ( pounds 17.3m) before tax in 1992.

The loss included an Ir pounds 18.4m exceptional charge for restructuring at Waterford Crystal and Wedgwood. Operating profits were steady at Ir pounds 9.1m, despite a 7 per cent decline in turnover to Ir pounds 273.6m.

Waterford Crystal made an operating profit of Ir pounds 500,000 - its first since 1986, although most of that was attributable to the success of the lower-priced Marquis brand of glass launched in late 1991.

Don Brennan, chairman, said 1992 was a watershed for the group and that it was now poised to go forward despite difficult economic conditions in most of its principal markets.

The optimism follows the company's deal in January with its workforce in Waterford, involving pay cuts and productivity gains. The unions agreed terms after the group threatened to move all production from Waterford.

Richard Barnes, chief financial officer, said that the significantly reduced cost-base at Waterford would give Ir pounds 4m savings this year and Ir pounds 5m in 1994.

John Clark, analyst at Riada in Dublin, said the exceptional charge was worse than anticipated. Restructuring at the Waterford plants ate up Ir pounds 8.8m, mostly in redundancy payments.

A further Ir pounds 7.7m was spent rationalising production at Wedgwood. 'We've consolidated down from 11 factories to seven,' said Kneale Ashwell, Wedgwood's chief executive.

Wedgwood has begun to suffer just as it appears that Waterford is turning the corner. The china company's operating profits fell from Ir pounds 10.3m to Ir pounds 8.6m.

The balance of the Ir pounds 18.4m exceptional charge came from Ir pounds 1.9m losses on property disposals.

The shares were stable at 30p.