Richemont's jittery outlook

Cartier luxury-goods maker Richemont warned yesterday that Europe's uncertain economic prospects might hit demand for expensive watches and jewellery despite recent signs that the sector was starting to recover.

"What is going on in the Western world is not very encouraging," Richemont's deputy chief executive, Richard Lepeu, said. "Look at Europe and what might happen in the US."

The company posted à603-million in annual profit, down 18%.

Sales declined 4% to à5.176-billion from à5.418-billion for the financial year that ended in March.

Richemont, based in Switzerland, gave investors some encouraging news when it announced a new share buyback programme.

The group, which is controlled by the Rupert family, said it would pay a dividend of 0.35 Swiss francs - up 17%.

It said shops were replenishing stock after cutting back during the economic crisis, lifting sales by 24% in April.