Asia pushes Burberry profits 14% higher
Burberry\'s full year adjusted pre-tax profits are up 14% to £428m, helped by its growing spread of Asian branded stores
Despite spending wobble worries last autumn – the nervousness was so severe Burberry issued a profits warning – Burberry claims full year adjusted pre-tax profits are up 14% to £428m, helped by its growing spread of Asian branded stores. However the costs of Burberry buying out its fragrance licence with Interparfums – the company took its perfume in-house last month – came to almost £83m. Still, the solid numbers – better than expected from many analysts – saw Burberry up its dividend to 29p, up 16%.
However the bags-to-beauty maker confirmed first-half 2014 profits would not match 2013, given its repositioning of its wholesale/retail mix, in favour of the stronger retail side. “Burberry is well positioned with opportunity by channel, region and product,” said Chief Executive Angela Ahrendts. “With the integration of beauty in April, we have added another exciting growth platform.” The company claims the back-of-house supply chain integration of beauty is complete.
It’s also shipping reorders for Body Tender, its new women’s fragrance launched in March. More encouragingly, the latest numbers gives the company a bounce when comparing so-so sales comments from the likes of LVMH and PPR (to be rebranded Kering in June); both have endured slower growth in Asia, particularly China. Some distance from its 2010 share price high of 1,578p, Burberry shares were recently selling at 1,544p, more than 50% higher compared to its mid October 2012 low of 1,001p.