Bulgari lifts dividend as LVMH synergies loom

The Rome-based company is being taken over by the world No.1 luxury group in a 3.4 billion euro ($4.7 billion) deal. The takeover would double LVMH's watch and jewellery business and fuel the group's exposure in both mature and emerging markets.

"Our alliance with the LVMH Group has created new synergies that will enable Bulgari to strengthen even more and pursue its long-term, worldwide growth," Chief Executive Francesco Trapani said in the 2010 results statement on Friday.

Bulgari will benefit from LVMH's global retail network and improve margins through cost-sharing. The Italian company will help the owner of Louis Vuitton handbags better compete with bigger watch and jewellery companies Richemont (CFR.VX) and Swatch (UHR.VX).

Bulgari proposed a dividend of 0.12 euro per share, to be paid partly from 2010 profits and partly from reserves.

Analysts expected a dividend of 0.09 euro per share. Last year, Bulgari halved its dividend to 0.05 euro.

Net profit was 38 million euros, below an average of 51 million euros forecast by analysts in Reuters I/B/E/S poll.

Sales grew 25 percent in the first two months of the year, after a 15 percent increase to 1.06 billion euros in 2010, showing the continued strength of top luxury brands.

"The general market recovery and excellent sales trend ... lead me to be cautiously optimistic and also constitute a positive starting point for the months to come," said Trapani.

LVMH plans to delist Bulgari once the deal is completed.

Bulgari shares closed up 0.25 percent at 12.19 euros before the results came out. The Dow Jones Luxury index .DJLUX was down 0.54 percent.

(Editing by Will Waterman) ($1=.7242 Euro)