Burberry released their first half results today showing improved total revenue of 8% and a strong cash position, leading to an increased interim dividend of 8p.
Financial performance
- Total revenue growth 8% underlying to £883m (up 6% reported)
- Retail revenue growth 10% underlying to £577m (up 9% reported)
- Adjusted PBT up 6% underlying to £173m (up 7% reported)
- Reported PBT £112m (2011: £159m)
- Net cash of £237m
- Interim dividend up 14% to 8p
Retail/wholesale reported revenue up 7%; adjusted operating profit up 11%:
- Adjusted operating margin up 60 basis points to 15.5%
- Better quality sales and tight control of discretionary spend
- Enabled continued investment in key growth initiatives
Focused execution of key strategies:
- Digital innovation: Regent Street opening - Burberry World Live
- Brand balance: Prorsum and London penetration increased
- Non-apparel growth: mens accessories grew 40% in retail
- Retail investment focus in flagship markets: new stores in Hong Kong, Milan, Rome and London; full year capital expenditure unchanged at £180-200m
- Emerging markets focus: 62 franchise stores in 27 countries worldwide
- Operational excellence: expanded and upgraded logistics network
- Fragrance and beauty directly operated as fifth product division from 1 April 2013
- Consistent with ongoing strategy of greater brand control
- Significant opportunity in under-penetrated opening price point categories
- Euro181m payment to be made in H2 for ending licence relationship; £71m of which is recognised within exceptional items in H1
- Broadly neutral to adjusted PBT in FY 2013/14, a transition year; earnings accretive thereafter
Angela Ahrendts, Chief Executive Officer, commented:
"In retail/wholesale, which accounts for over 90% of our business, Burberry delivered 7% revenue growth, 11% profit growth and a further improvement in operating margin, all in a challenging external environment. Our five key strategies remain highly relevant and we continue to invest in our retail, digital and technology growth initiatives.
Integrating fragrance and beauty is a significant brand and business opportunity. Our global teams are excited to partner with long-standing distributors, suppliers and customers to optimise these under-penetrated categories. One consistent brand expression, leveraged across all categories, will underpin future growth in the Beauty division and our existing core business."
