New Record For The Swatch Group “Dazzling Prospects”
Everything is for the best in the best of worlds for the Swatch Group, which has published record results for 2006 while announcing a "very promising" 2007 financial year.
Last year the worlda€™s leading watch company saw its net profit increase by 33.7% to 830 million francs and its operating profit rise to 973 million, compared to 735 million in 2005 (+32.4%). Meanwhile turnover in 2006, published at the beginning of the year, exceeded the five billion franc mark for the first time with a total of 5,050 million (+12.3%).
By sector of activities, operating profit increased by 17.9% in watches and jewellery, to 738 million francs, by 212.8% in the production of movements and components, to 147 million, and by 32.5% in electronic systems, to 106 million.
In the light of these exceptional results, the board of directors of the Swatch Group decided when it met on 14 March to submit to the General Meeting of 11 May this year an increase in the dividend of 40%, to 3.50 francs per bearer share, compared to 2.50 francs last year, and 0.70 franc per registered share, compared to 0.50 franc in 2005. At the meeting it will also propose to shareholders the cancellation of shares bought during the last share buyback programme a€“ totalling 300 million a€“ completed on 23 November 2006. The board of directors has also decided to embark shortly on a new 400 million share buyback programme through the secondary market.
With these two measures, the Swatch Group shows once again its willingness to return to shareholders liquid assets not required for operation. It also demonstrates its commitment to optimising the groupa€™s consolidated balance sheet. In this respect, mention should be made of the return on equity, which has been increased to 17.3% (14.0% in 2005) for an equity ratio of 71.9% on 31 December 2006 (69.9% on 31 December 2005).
Regarding the 2007 financial year the first two months show a strong upward trend in line with that of 2006, particularly in the watch, jewellery and production sectors (the more volatile electronic systems segment at present shows a slightly more modest rate of growth). So much so that the group already envisages another very promising financial report and has announced "dazzling prospects" for the current year.
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