Richemont slumps 10% in minutes after results

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Richemont's share price lost almost 10% in opening trade on Friday after the company reported results.

Earlier, the company reported a 46% increase in sales for the year to end-March, with its profit up 61% to €2.079 billion. It also declared a special dividend.

But Bloomberg reports that the earnings were lower than expected, and Reuters reports the share price fell after the company said discussions about its "Luxury New Retail" partnership are "taking time".

Richemont is in negotiations with luxury digital groups Farfetch and Alibaba Group about a global strategic partnership that will boost selling of luxury brands in China, and build ecommerce in the global luxury industry.

On Friday, the company said its watchmakers – including Roger Dubuis, Cartier, IWC, and Jaeger-LeCoultre – reported 49% sales growth, with a 34.3% operating margin. “The increased appeal of high-quality watches to Millennials and Gen-Z is very positive for the future,” the company said in a statement.

Its jewellery business - Buccellati, Cartier and Van Cleef & Arpels – grew sales by 49%. Online sales grew by 27%.

The company posted a proposed dividend of 2.25 Swiss franc (R36.72), with a special dividend of CHF 1.00 (R16.32).

“This is a recognition of the excellent profits achieved over the year that we would like to share, not only with all Richemont colleagues through an exceptional reward payment, but also with Richemont’s loyal long-term shareholders.

The company said its suspension of commercial activities in Russia resulting in a €168 million hit to its operating result.

The company increased its net cash by 55% to €5.251 billion.

Richemont's share price is down almost 40% from the start of the year Its share price traded at R154.48 on Friday morning.

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