Watches of Switzerland Group PLC on Thursday warned of poor trading conditions in the UK, but did laud revenue growth in the US.

For the six months to October 29, the luxury watches seller said revenue edged down 0.5% to £761.4 million from £765.2 million a year earlier.

Pretax profit dropped 20% year-on-year to £66.5 million from £82.7 million.

Revenue grew 11% in the US market, now accounting for 43% of the group’s total revenue. However, the consumer environment in the UK and Europe proved more challenging, with the group posting a 4% year-on-year decline in revenue. The firm warned the ‘consumer environment in the UK continues to be more challenging’

The group underwent expansion and refurbishment of a number of showrooms, opening 19 globally over the six-month period, meanwhile.

Guidance remains unchanged for the full year, expecting revenue growth of 8% to 11% at constant currency and revenue between £1.65 billion and £1.70 billion.

Chief Executive Officer Brian Duffy commented: ‘We are confident in our long range plan objectives of doubling sales and profit by 2028 through capitalising on our leading market positions and the unique growth opportunities available to us as the world’s largest luxury watch retailer.’

The group’s share price slumped back in August and it has struggled to mount a sustained recovery since, following Rolex SA’s agreement to purchase Swiss watch retailer Bucherer Ltd. It slumped more than 20% in late-August on the Rolex announcement. It led to fears that Bucherer would get better access to Rolex watches.

Watches of Switzerland, however, said the acquisition does not represent a strategic move into retail by Rolex, and there will be no change in the product allocation or distribution of Rolex watches.

Watches of Switzerland shares were down 0.8% at 650.50 pence each in London on Thursday morning. It is roughly 6.0% lower than it was prior to Rolex’s Bucherer announcement.

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