Swatch reports good times

The world's biggest watch group Swatch today posted a 2013 net profit rise of more than 20 per cent, beating market expectations and hailing a promising start to the new year.
Times look good for the company despite changes in the climate for luxury watch sales in the important Chinese market, it said.
The Swiss watchmaker posted a net profit of 1.9 billion Swiss francs (USD 2.1 billion, 1.5 billion euros) last year, it said in a statement.
Its operating profit soared 17 per cent from the 2012 level to 2.3 billion francs, while its operating margin rose to 27.4 per cent from 25.4 per cent a year earlier.

The company attributed that increase to winning legal action late last year in the Netherlands against US jewellery group Tiffany & Co over a failed venture jointly to design and market luxury watches.
The numbers published today were well above the expectations of analysts polled by financial news wire AWP, who had anticipated a net profit of 1.7 billions Swiss francs and an operating profit of 2.0 billion.

Swatch, most known for its brightly coloured plastic-cased watches, had already said in early January that its 2013 sales jumped 8.3 per cent to 8.8 billions Swiss francs.
The watchmaker, which is also the leader in watch component production, said it had injected nearly 700 million francs into machinery, production infrastructure and sales outlets last year.

Despite these investments, the group said it held 1.8 billion francs in disposable cash at the end of January.
That was about the same level as last year before it snapped up US jeweller and watchmaker Harry Winston and Dubai-based Rivoli Investment, a company with a distribution network of more than 360 retail stores in the Middle East.
Hailing the strong results, the Swatch board proposed distributing a dividend of 7.50 Swiss francs per bearer share and 1.50 francs per registered share, up 11.1 per cent from a year earlier.
Swatch also painted a rosy picture for the year ahead, pointing out that its watch and jewellery sales had been on an upward trend during the first month of 2014.

"All brands had an auspicious start," it said, stressing that "continued healthy growth is expected in 2014."
"Swatch Group is in an excellent position for both the future and for long-term growth," it said.
Following the news, the company saw its share price jump 4.32 per cent to 555.50 francs a piece in midday trading, as the Swiss stock exchange's main index rose just 0.45 per cent.