By  on June 10, 2005

LONDON — Compagnie Financiere Richemont may have doubled its profits last year, but it's keeping a tight hold on the purse strings.

Profits at Compagnie Financiere Richemont more than doubled to 496 million euros, or $624.7 million, from 238 million euros, or $279.8 million, in the fiscal year ended March 31, thanks to a mix of rising sales and shrinking costs.

And the momentum continues to build. Sales for April and May increased 15 percent at actual exchange rates, and the group's watch businesses in particular have continued to show strong levels of growth, Richemont said in a statement Thursday.

Dollar figures have been converted from the euro at average exchange rate for the corresponding periods.

Richemont's portfolio includes brands such as Cartier, Van Cleef & Arpels, Montblanc, Piaget, Baume & Mercier and Chloe.

"The year ahead will be a good one for the group," said Johann Rupert, chairman of the Swiss-based luxury goods group in a telephone interview. "All things being equal, and barring any major economic disruptions, things will be going very well this year. We're going to be carrying on driving sales, creativity and innovation — and containing costs."

The statement added that operating profit rose 70.6 percent to 505 million euros, or $635.9 million, from 296 million euros, or $348 million, thanks to strong sales coupled with a 5 percent growth in operating expenses.

"We've been focusing on cost-cutting and cost-containment measures across the table," said Rupert. "In the past, costs have gone up along with sales, but this time it didn't happen. I think my colleagues have been very disciplined over the past year."

The statement added there will be a 25 percent increase in the level of ordinary dividend to 0.5 euros, or 61 cents, per unit, as well as a special dividend of 0.5 euros, or 61 cents, per unit.

Jacques Franck Dossin, an equities analyst at Goldman Sachs in London, was full of praise for Richemont in his report Thursday.

"Second-half results indicate that Richemont, our top pick within the luxury goods sector, is delivering on all fronts: top line, restructuring and caring for shareholders," he said.

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