Wedgwood boss expects earnings for 2002 to meet market expectations

Luxury goods group Waterford Wedgwood expects earnings this year to meet market expectations, chairman Sir Anthony O'Reilly told shareholders yesterday.

Shareholders were told the group intended launching a major initiative to sell its shares on the US market. Sir Anthony said half the group's sales were now in the US, but only 17 per cent of its shares were held there.

He said this compared badly with companies such as CRH, which had more than 50 per cent of its shareholders in the US, or Independent News & Media, which was 35 per cent US-owned.

He said it was "utterly critical" that Waterford Wedgwood increased the size of its US shareholder base and expressed the hope that it would reach 50 per cent of all shareholders.

He defended US business and said that, in spite of the recent wave of corporate and accounting scandals, the bulk of companies in the US were well run.

Sir Anthony still believed Waterford Wedgwood's plan to double sales to €2 billion by 2006 was attainable. Aspects of the plan were outlined to the meeting by the group's chief executive, Mr Redmond O'Donoghue.

Sir Anthony said the world economy was currently going through the most volatile commercial period he had experienced in the course of his professional career. He said the group had performed very well given the September 11th attacks on the US and given that it was involved in the luxury goods sector.

"After a record-breaking year in 2000, our rate of sales and profit growth did slow. However, although our trading results in 2001 were disappointing, they were in line with those of many other luxury goods businesses."

A number of shareholders expressed disappointment with the performance of the Waterford Wedgwood shares. Sir Anthony said it was the most under-rated stock in the luxury goods sector in which it operated. He said this was due to the under-emphasis on the US in its shareholder portfolio.

Speaking to RTÉ after the meeting, Sir Anthony said he was not convinced that laws in the US needed to be changed to give the Securities and Exchange Commission more powers.

He said US auditing firms like KPMG and Ernst & Young were extremely good companies, and said he felt sorry for Arthur Andersen, where one office rather than the whole company had been shown to act improperly.

He expressed concern that people would be less willing to serve as non-executive directors of companies because the fees they were paid would not justify the work they may now have to put in.