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Richemont just reported its results for the financial year ended 31 March 2018. It managed sales of EUR 10 979 million (up by 3% at actual exchange rates) and profit for the year of EUR 1 221 million (up 1%). Double digit sales growth was maintained in mainland China, Hong Kong, Korea and Macau.
Remember that Richemont's 'A' shares are listed on the Swiss Exchange. We own Richemont SA Depository Receipts, which are listed on the JSE.
The business is run very conservatively, which has always been Johann Rupert's style. Strong cash flow from operations swelled net cash to EUR 5.3 billion. The dividend was hiked by 6% from last year's payout. They could afford to be more generous, in my view.
Richemont's products are in high demand, and have great margins. For example, consider Van Cleef & Arpels' Alhambra line of jewellery.
The four-leaf-cloverlike design was launched in 1968. Necklaces are the core product, but the format has been extended to earrings, rings and watches.
To celebrate Alhambra's recent 50th anniversary, Van Cleef & Arpels created four limited-edition designs which were launched at select flagship stores around the world. Alhambra pieces generally are snapped up within 24 hours of posting. If you can get one, prices range from $6,350 to $63,500.
The Richemont share price is down this morning by around 6% as some investors probably expected stronger numbers. We like this high-quality business and remain loyal investors. Today would be a good day to buy some more for your portfolio.