Burberry profit ahead of forecasts
British luxury goods group Burberry beat forecasts with a six per cent rise in first-half profit as its most wealthy shoppers continued to spend despite a faltering global economy.
The group, best known for its camel, red and black check pattern, said yesterday it made a profit before tax and one off items of £173 million (€217 million) in the six months to September 30.
Last month, Burberry said sales had steadied in the final weeks of its second quarter, reassuring investors rattled by a shock profit warning in September.
At the time the firm said the “aspirational luxury consumer” had been hit by the slowing global economy, but wealthier shoppers continued to spend. It also said it had sold a higher proportion of goods from its top-end lines, boosting profit margins. Total first-half revenue was £883 million (€1 billion), up eight per cent at constant exchange rates, with first quarter growth of 11 per cent slowing to five per cent in the second.
Burberry said guidance for the second half was unchanged from that issued in October.
However, the firm said the decision to end its licence agreement with Interparfums and directly operate fragrance and beauty as a fifth product division from April 1 would be broadly neutral to underlying profit in 2013/14 and earnings accretive thereafter.
It said there was a “significant opportunity” in under-penetrated opening price point categories in fragrance and beauty.
The group, which ended the half with net cash of £237 million (€297 million), is paying an interim dividend of 8p (10c), up 14 per cent.