Watches of Switzerland clocks up 'strong' H1 and reiterates bid to grow in Edinburgh
The FTSE250 luxury timepiece and jewellery firm saw group revenue in the 26 weeks ending October 30 reach £765 million, a year-on-year jump of 31 per cent at reported rates. Statutory pre-tax profit stepped up by 28 per cent to £83m, while basic earnings per share on the same basis grew 26 per cent to 27.2p. The group also reported that trading in the first six weeks of the third quarter dovetails with its expectations and its full-year guidance laid out last month is unchanged.
Its Glaswegian boss Brian Duffy told The Scotsman that he is “very, very pleased with the results and the consistency and predictability of them” and he stressed that the business is “much less affected than I think almost anybody in retail” by the cost-of-living crisis, with its waiting list growing. “We're gaining market share, we're maintaining all of our investments and overall doing well, but nobody's immune completely.”
Adjusted earnings before interest and taxes jumped by nearly a third to £87m, although the relevant ebit margin retreated by 20 basis points (bps) to 11.3 per cent. The latter was seen as contributing to the group’s share price falling at one point to 890p after starting the session at 959p. “We disagree with the takeaway from it… our focus is running the business,” Mr Duffy said, adding that last year included the rate holiday, and without this exceptional element the margin would have been up 70bps.
In terms of its branch network, the CEO pointed out that the group has in Glasgow in 2022 opened neighbouring Tudor and Longines stores on Glasgow’s Buchanan Street, complementing its Rolex, Omega, Breitling and Mappin & Webb stores on the thoroughfare. “There's always more you could do,” he added, and said the group is very happy with the performance of its stores in Edinburgh’s St James Quarter. In terms of expanding in the Scottish capital, he said: “There are things happening on Multrees Walk... that's been an upgrade waiting to happen. I think that combination of Multrees Walk, St Andrews Square and the St James Quarter, has got some really good potential.”
The firm also noted in its first-half-results that it has expanded into Scandinavia – “we like to specialise in freezing cold places” said Mr Duffy – and is set to open a further seven mono-brand boutiques in the second half in the UK and US, including a third Watches of Switzerland showroom in Manhattan at One Vanderbilt.
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