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Waterford Wedgwood plc

Trading Update and Update on Equity Issue

Trading Update and Guidance

Waterford Wedgwood plc ('Waterford Wedgwood', the 'Group' or the 'Company'), the leading international luxury lifestyle group, is today providing an update on trading for the first half of its 2008/09 financial year and updating guidance for the full year. (All numbers herein are stated at constant exchange rates unless otherwise noted.  The Group expects to report its unaudited results for the half year to October 4, 2008 not later than December 4, 2008.) 

The Group's trading in the first quarter was consistent with management expectations, with sales in line with the comparable prior year period (approximately 5% lower at prevailing exchange rates). As stated in the prospectus issued by the Company on September 18, 2008 (the 'Prospectus'), trading softened in the period up to August 31, 2008. Trading also slowed in September, reflecting the increasingly difficult economic environment the world over, resulting in second quarter sales being approximately 10% down on the comparable prior year period. Accordingly, revenue for the Company's half year is expected to be some 6% lower than in the comparable prior year period (approximately 13% lower at prevailing exchange rates). Features of the Group's half year sales include: 

• The recovery of Wedgwood's business continued with second quarter sales approximately 4% ahead of the comparable prior year period and half year sales approximately 7% ahead.

• Reflecting both the consolidation of Royal Doulton's operations with Wedgwood and new management's continued drive towards a profitable business model, Royal Doulton achieved a €2.7m improvement in provisional half year EBITDA against the comparable prior year period, despite its sales being some 18% lower, as a result of a 7 percentage point improvement in gross margins and a €2.9 million reduction in indirect overheads.

• Waterford's half year sales were 9% down on the comparable prior year period. The key US market, however, which represents some 63% of sales, was only 5% down in difficult market conditions, due to Waterford's market share gains of approximately 3 percentage points in both the stemware and giftware categories.

• After a strong first quarter with sales approximately 4% higher than the comparable prior year period, Rosenthal trading softened in the second quarter, and half year sales were approximately 6% lower than the prior year.

• The Spring Switzerland businesses continued to grow, with a year on year sales improvement of approximately 5%.

Not unexpectedly given the severe global shock to consumer markets, October Group sales were some 19% down on the comparable period in 2007. There are early indications, however, that this rate of decline is not continuing into November.

In the face of today's particularly challenging market conditions, Waterford Wedgwood is generally outperforming its competition. The Company has retained and/or increased its market share in many of its key markets, confirming the strength of its product offering and the standing of its brands as international market leaders.

Recent currency movements have been in the Company's favour. The Company's main net foreign currency exposures are the U.S Dollar and Japanese Yen (some US$80 million and Yen 2.7 billion, respectively). These exposures were hedged for the current financial year at rates of approximately USD:EUR 1.49 and JPY:GBP 220, in line with the Group's planning assumptions. The recent substantial strengthening of the U.S Dollar and Japanese Yen, if sustained, would make a significant positive contribution to the Group's financial performance from the next financial year. (By way of example, a 5 cent change in the U.S Dollar rate versus the euro would have a net financial impact of approximately €2 million and a 10 Yen change versus sterling would have a net financial impact of approximately €1 million.)

The Company expects full year sales to be in the region of €615 million (2008: €671.8 million). The Company's new management, however, is continuing its stringent prioritisation of cash over earnings, including a significant reduction in inventory levels. Accordingly, although EBITDA is expected to be approximately negative €50 million (2008: negative €31.6 million), cash outflow from operations is expected to be limited to approximately €20 million, a €62 million improvement on the comparable prior year period. The full year pre-tax deficit, including some €80 million of exceptional charges largely related to the Group's restructuring plans, is expected to be in the region of €200 million (2008: pre-tax deficit €241.6 million).

The Company's restructuring plans as set out in the Prospectus, designed to dramatically enhance gross margins and reduce indirect costs, are being progressed subject to the availability of funds. Management is also removing complexities from the business (further reducing working capital utilisation) and continues to refine and focus the Company's portfolio on the strengths of its core products and brands. Though some of these measures may impact negatively on the Group's earnings short-term, the Directors consider them in the best interests of the Company as they significantly benefit both cash flow and the future earnings of the Group.

Equity Issue - Further Update

On September 16, 2008 the Company announced its intention to raise capital by way of the 2008 Equity Issue, comprised of an Open Offer of up to €101.7 million and a subsequent Placing of the balance up to an aggregate of €153.7 million (before expenses), the details of which were contained in the Prospectus. On October 8, 2008 the Company announced that the Placing was not likely to complete until some time after completion of the Open Offer, and on October 13, that it had raised €79.6 million, successfully completing the Open Offer. 

Amidst the ongoing market turbulence, the Company has not yet been able to complete the Placing of the balance of up to €74.1 million and the Directors are now of the view that it is unlikely that the Placing will be completed on existing terms and within the target date of November 30, 2008. 

The Company's Directors, however, in consultation with its advisors are currently exploring alternatives to raising the required (as described in the Prospectus) equity under terms which may be different than those pursuant to the Placing and which, more significantly, may encompass a comprehensive financial restructuring. The Company is in active discussions with a number of interested institutional investors regarding their possible investment in the Company. The Company is also in discussion with its senior lenders, and the Directors have reason to believe that their senior lenders will continue to support the Company whilst discussions with potential new investors continue.

The Company is being advised by Lazard Frères & Co., LLC, by J.P. Morgan plc and by Davy.

Further announcements in relation to the Company's progress in raising the equity it requires will be made in due course as progress warrants.

Share Consolidation

At the Extraordinary General Meeting of the Company on October 13, 2008 the Company's Shareholders approved a proposal to effect a consolidation of the Company's Stock Units on the basis of 1 Consolidated Stock Unit for every 2,500 New Stock Units held on December 19, 2008, a measure conceived prior to the onset of the recent unprecedented turbulence in global financial markets.

Given the current market conditions, the Directors believe that it would not be in the best interests of Shareholders to undertake such a measure at this time. Accordingly, a resolution will be proposed at the Annual General Meeting of the Company to afford the Directors discretion to implement the Consolidation at a later date. (Details of any subsequent decision regarding implementation of the Consolidation will be notified to the market by means of a further announcement.)

Dual Listing - London De-listing

The Stock Units of Waterford Wedgwood are presently listed on both the Irish Stock Exchange and the London Stock Exchange. The Directors have considered this circumstance and concluded that having regard to the current level of the free float and the small volume of Stock Units traded on the London Stock Exchange, the cost and complexity of this dual listing are no longer justified.

The Company therefore announces its intention to apply to the UK Listing Authority to delist the Stock Units from the Official List of the UK Listing Authority and to request that trading in those Stock Units on the London Stock Exchange be cancelled. As Waterford Wedgwood continues to retain its primary listing on the Irish Stock Exchange, the London delisting is expected to have negligible effect on shareholders.

It is anticipated that this delisting shall take effect as of the start of trading on December 17, 2008.

Annual General Meeting

The Company's Annual General Meeting is scheduled to be held in Ireland on Friday, December 19, 2008. Formal notice thereof will be addressed to shareholders shortly.

November 17, 2008

Enquiries:

Powerscourt (UK and International Media) Rory Godson	+44 (0) 20 7250 1446
Dennehy Associates (Irish Media)  Michael Dennehy	+353 (0) 1 676 4733

Terms defined in the Prospectus dated September 18, 2008 have the same meaning in this announcement. 

Please note that certain information in this announcement is based upon unaudited management accounts. In addition, certain statements made are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements. Unless otherwise required by applicable law, regulation or accounting standard, the Company does not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.

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