Richemont has a sparkling first half


Richemont has a sparkling first half

Published Date: 2017-10-18 | Source: Stephen Gunnion | Author: Stephen Gunnion

Richemont has a sparkling first half

The luxury goods group says it's benefited from better trading and positive exchange-rate movements

Last year Richmond was destroying watches; this year it's selling them again. The luxury goods group says it expects a big improvement in earnings for the six months to end September after it bought back inventory from retailers who couldn't sell them last year and disposed of some of the excess stock.

In a trading statement yesterday, Richmond said first-half sales are up 10% on a reported basis and 12% in constant currency. On this basis, its operating profit is likely to show an increase of around 45%, while net profit should be around 80% higher. It says the increases predominantly reflect the non-recurrence of last year's exceptional inventory buy-backs, an improved trading performance and the positive net impact movements in exchange rates.

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Last month, the group reported rising sales across all regions, with particularly strong growth in the Asia Pacific. European sales were held back by the negative impact of a strong euro on tourist spending, but UK sales grew at a double-digit rate benefitting from favourable currency movements. Geopolitical uncertainty held back sales in the Middle East. For the first five months of its financial year, sales at its Jewellery Maisons business rose 16% at actual exchange rates and 17% at constant exchange rates, while sales at its Specialist Watchmakers unit grew by 6% and 7% on the same basis. Sales were also helped by the reopening of the Cartier flagship stores in New York and Tokyo a year ago.

Richmond's shares shed 0.1% yesterday to close at R121.02. They've gained 33% this year.

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