7th Jul 2022 17:39
(Alliance News) - Watches of Switzerland Group PLC's growth plans will be closely-watched examined by investors as the luxury timepiece retailer posted strong annual results.
The company on Thursday reported a strong rise in revenue, as the retailer enjoyed increased demand for both watches and jewellery, but guided for this soaring sales growth to slow.
In the year ended May 1, the Leicester, England-based firm reported pretax profit of GBP126 million, surging from GBP64 million the year prior.
Annual revenue jumped 37% to GBP1.24 billion from GBP905.1 million. In the UK, revenue was up 34% to GBP810 million, while US revenue was 44% ahead at GBP428 million. Luxury watch sales were 36% higher, while luxury jewellery sales increased 86%.
The luxury watch seller said it has started the new year with "strong momentum", as Covid-19 disruption is largely behind it. It expects revenue between GBP1.45 billion and GBP1.50 billion in the financial year ahead, a moderation from financial 2022's growth.
The company, which is an authorised dealer of Rolex watches, also said its expansion into Europe commenced having opened one mono-brand boutique with Breitling in Stockholm in June. It has also secured a further five mono-brand boutiques in Sweden, Denmark and Republic of Ireland which will open in 2023.
"Luxury goods firms are often seen as more resilient in a downturn because their wealthy clientele is less affected by its effects and Watches of Switzerland's latest update appears to back up this hypothesis," explained AJ Bell's Russ Mould.
"The company nearly doubled its profit and boosted its margins – no mean feat when costs are going through the roof and testament to the pricing power of the products it sells. Attention will turn to plans for expansion in the European market as Watches of Switzerland looks to tick up its growth prospects," Mould added.
The stock closed up 1.9% at 803.50 pence on Thursday.
By Arvind Bhunjun; [email protected]
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