Richemont reports a 27% rise in its sales

By Sandile Mchunu Time of article published May 20, 2019

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JOHANNESBURG - Swiss luxury group Richemont's share price rose more than 4percent on the JSE after the group reported a 27percent increase in sales for the year to end March, reflecting growth across all business areas and distribution channels.

The group’s two acquisitions Yoox Net-a-Porter (YNAP) and Watchfinder were instrumental in lifting the sales to 14billion (R224.65bn) at actual and constant exchange rates. The group said excluding YNAP and Watchfinder, sales rose by 8percent at actual and constant exchange rates.

The share price increased to R105.20 a share on Friday, up from Thursday's closing price of R99.04. It closed on R104.40 at the end of the day.

Richemont chairperson Johann Rupert said that the year under review had been one of transition and consolidation.

“We have continued our transformation journey with the successful tender offer on the shares we did not already own in Yoox Net-a-Porter group, the leading global online luxury and fashion retailer, and the acquisition of Watchfinder & Co (Watchfinder), a leading omni-channel platform for premium pre-owned timepieces.

Last year the group acquired YNAP for 2.7bn to strengthen its presence and focus on the digital channel, which was becoming critically important in meeting luxury consumers’ needs, as well as 100percent of the share capital of Watchfinder, the leading online pre-owned premium watch specialist, in a private transaction with its shareholders, for an undisclosed amount.

The group owns a portfolio of leading international Maisons and it operates in three segments: Jewellery Maisons, which are Cartier, Van Cleef and Arpels and Giampiero Bodino; Specialist Watchmakers with brands such as A Lange and Söhne, Baume and Mercier; as well as watch component manufacturing activities.

Rupert added that in the results, Jewellery Maisons and the retail channel posted the strongest performance.

“Most of our markets were in positive territory, led by double-digit increases in the US and in all the main markets of Asia Pacific,” Rupert said.

The US and Asia Pacific increased their sales by 41percent and 20percent respectively, during the period.

The profit surged by 128percent to 2.79bn, with the group stating the increase reflected a 1.38bn post-tax non-cash accounting gain on the revaluation of the YNAP shares held prior to the tender offer.

“Excluding this amount, profit for the period grew by 15percent, primarily driven by a higher operating profit,” the group said.

Earnings per share also increased by 128percent to 4.93 on a diluted basis.

The board has proposed a dividend of Swiss francs 2 (R28.44) a share.

Looking ahead the group said it is determined to ensure that its unique Maisons remain attractive and compelling.

“We will continue to encourage an innovative and entrepreneurial mindset among our colleagues. We will foster a collaborative and inclusive working environment where talent thrives and sustainability is embedded across all our operations,” the group said.


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