JOHANNESBURG - Swiss luxury group Richemont on Friday posted an 80percent rise in first-half profits, buoyed by strong growth across all of its divisions in the six months to September.
The group’s bumper rise in profits, however, failed to win over the markets, with the group’s share price down 2.45percent to R125.08 on the day.
Johann Rupert, Richemont’s chairman, said most markets were in positive territory, led by mainland China, South Korea, the UK, and notably a return to growth in Hong Kong.
“While we cannot predict the environment for the full year, it is clear that the full-year results on a comparative basis will not see the exceptional level of growth reported in the period under review,” Rupert said.
The company owns several of the world’s leading luxury goods companies, with particular strengths in luxury watches, jewellery and premium accessories. The group’s luxury interests include several of the prestigious names in the sector, encompassing Montblanc, Van Cleef & Arpels, Cartier and Piaget, among other renowned brands.
The group said its sales in the six-month period increased by 10percent at actual exchange rates and by 12percent at constant exchange rates, driven by growth across all segments, distribution channels and regions. The group’s operating profit on a reported basis rose by 46percent, while profit for the period grew by 80percent compared to the prior year period.
Richemont said its cash flow from operations increased by 66percent to 1.1billion; it attributed the growth to improved operating profit and continued working capital discipline, with decreased inventories. In the six months under review, Richemont disclosed that it had taken a 5percent stake in Dufry, a leading travel retail specialist listed on the Swiss stock exchange. The Swiss watchmaking company has been hit in recent years by sluggish global economic growth - as well as the rise of the Apple Watch.
The group has appointed Cartier’s international sales director Emmanuel Perrin as head of specialist watchmakers’ distribution at Richemont. The new position will see him take responsibility for the co-ordination of distribution strategies across the group.