Irish-based crystal and china maker Waterford Wedgwood yesterday reported a year of "unacceptable losses" but said its recovery was on track as its restructuring programme helped streamline the business.
The Dublin-based group, which axed 1,800 jobs last year, is issuing new shares to help finance its turnaround.
Pretax losses for the year to March 31 were cut to 189.4 million euros (£130 million) compared with a deficit of 244.8 million euros (£168 million) the previous year.
Sales rose ten per cent to 772.6 million euros (£528.6 million), largely as a result of the acquisition of Midlands-based Royal Doulton in January last year, Waterford said.
The closure of its Tuscan plant in Staffordshire, announced earlier this year, would concentrate production in four streamlined European plants and one in Indonesia, Waterford added.
Waterford Crystal sales were down 6.6 per cent at 206.5 million euros (£142.4 million), while ceramics, excluding Doulton, were six per cent lower.
In the first two months of this year, it said group sales had been at approximately the same level as a year ago.
Chief executive Peter Cameron said: "Fiscal 2006 was a year of unacceptable losses for Waterford Wedg-wood. However, we believe our transition back to profitability is gaining momentum given our new and exciting ranges."
These include the Gordon Ramsay range for Royal Doulton, and Waterford's Ballet collection, along with a collaboration with US fashion designer Marc Jacobs.
A rights issue aims to raise 60 million euros (£41 million) by offering three shares for every 13 held at 0.06 euro (0.04p) each. Chairman Sir Anthony O'Reilly and deputy chairman Peter Goulandris - who own 51 per cent of shares - have agreed to take up their proportion of the rights issue, the firm said.
Mr Cameron said trading in the first two months of this year was at a similar level to last, while profits were on target.
Waterford has seen its sales shrink dramatically in response to falling demand and the impact of low-cost competition in Asia.
Some 615 jobs went in the famous Potteries area last year with 400 axed following the closure of a crystal factory at Dungarvon, Ireland.
Waterford Wedgwood, which employs 9,000 staff, was established in 1986 with the merger of Waterford Crystal and Wedgwood, later acquiring Rosenthal and Royal Doulton.
In the wake of the takeover of Royal Doulton, Wedgwood's state-of-the-art facility at Barlaston, near Stoke, took on production of the Royal Doulton and Minton brands, ensuring some of Royal Doulton's famous china remained in the UK.
Mr Cameron said the group's planned cost reductions and new product and marketing initiatives were laying the foundation for an improved sales performance.
"Taking into account the cost savings achieved under the restructuring programme and the new product and marketing initiatives, we are targeting a considerably improved performance this year," he told shareholders.