Swiss luxury house Richemont reported full-year operating earnings of $623 million, up 71 percent, amid strong demand for expensive gems and watches, Reuters reports.

The maker of Cartier jewelry and watches and Montblanc pens, said on Thursday group net income rose 33 percent to more than $1 billion in its financial year to the end of March 2005.

The firm said sales grew 15 percent at actual exchange rates in April and May, helped in particular by the watch business—but that this rate would not necessarily be sustained in the full year.

“To annualize two months would be misleading but in general the mood is good … but I would not extrapolate 15 percent,” Executive Chairman Johann Rupert said on the conference call, Reuters reports.

The maker of Jaeger-LeCoultre, and IWC watches had already reported full-year revenues of $4.5 billion.

Richemont, which was built out of a South African tobacco dynasty, competes with the world’s biggest luxury-goods maker LVMH, and with Italy’s Bulgari.

Rupert also brushed aside rumors it might buy Tiffany or Bulgari to expand its stable of top brands, London’s Financial Times reports. He also denied the group planned to cut its 18.3 percent stake in British American Tobacco to raise funds for acquisitions.

The rumors have been fuelled by expectations that Richemont, hit by the market downturn of 2003 and Sars in Asia, was returning to the takeover trail as its markets recovered strongly.

JCK