| Half year profits at Lego have more than doubled and the company is “optimistic” about the rest of the year despite the economic doom and gloom.
Lego reported a pre-tax profit for the first six months of 2008 of DKK 564m (�75m) compared to last year’s DKK 212m (�28.4m) for the same period.
While the toy market has not grown since last year, the Danish firm is reaping the rewards of a 20% increase in sales.
The company said sales on its classic Lego City and Lego Star Wars lines were strong. While its Indiana Jones line sold better than expected, especially on the North American market.
In fact, Lego reports that sales in North America and Northern Europe have been “especially” strong, although sales are up on last year across all markets.
Lego is now predicting overall sales for the year to hit DKK 9bn (�1.2bn) with the overall profit before tax in the region of DKK 1.5bn (�0.2bn).
Lego Group ceo, Jørgen Vig Knudstorp, said: “The result demonstrates once again the great strength of our classic product lines and the importance of combining these with new strong licences.
“As the bulk of toy sales are concentrated in the closing months of the year, there is still a substantial element of doubt about the overall result for the year as a whole.
“Particularly in view of the continued negative economic development – which looks like gaining ground. But based on the powerful momentum we are enjoying at present and our ability to keep costs under control, we are optimistic about the prospects for the rest of the year.”
Lego said selling direct to consumers through its own branded stores, mail order and the internet had also “developed in a positive direction”.
The results follow a move in March by Lego that saw it take the Kladno, Czech Republic plant in-house from electronics manufacturer Flextronics International (PRW.com 10 March).
In July, it then announced that it would also take control of production at the Flextronics sites in Juárez, Mexico, and Nyíregháza, Hungary (PRW.com 3 July).
It planned to relocate the Juárez site to Monterrey, also in Mexico, as it was not “feasible” for Lego to take the existing site over. This is because the Juárez site is part of a much larger Flextronics facility.
Lego told PRW.com that it signed a lease on a Monterrey site and plans to move next month.
At the time of going to press, Lego was unavailable to comment on how these recent changes are likely to affect its full year results. |
