Royal Doulton slims losses

13 April 2012

TROUBLED china maker Royal Doulton has revealed an 11% fall in operating losses but warned that its performance in the second half would be 'crucial' to its future.

The group said last year's shake-up of the business had paid off, with first half operating losses reduced to £7m from £7.9m previously.

Restructuring, which included 1,100 job cuts and the closure of two factories and 42 shops, had boosted stability in costs, gross margins and underlying sales.

But chairman Hamish Grossart said improvements were needed if the group was to achieve its target of breaking even at the operating level. He added: 'Evidence of that improvement in the second half of 2003 will be crucial to the long term fortunes of the group.'

The 200-year-old group, which was founded by Sir Henry Doulton, employs 3,600 staff and has 356 shops worldwide.

It has been battling to cut costs and raise its game in the face of stiff competition from low-cost overseas producers.

The group has increasingly moved manufacturing overseas and outsourced production of its Royal Albert range to Indonesia last year. It is left with just one UK factory in Stoke.

The first half of 2003 saw a continuation of the market conditions experienced throughout most of last year.

Industry overcapacity continued to exert pressure on prices and margins and consumers continued 'value conscious purchasing patterns'.

Sales in the first half were £58m, against £69.7m, which the group said reflected the impact of store closures, withdrawal from some non-commercial channels and weak consumer spending.

Losses were reduced to £4.9m from £7.7m last time, while net debts were £16.8m and restructuring costs were £8.2m. In common with last year, the group is not paying a dividend.

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