Burberry profits up 14%
Luxury brand Burberry saw its adjusted pre-tax profit rise by 14% to Â£428 million in the year to end March as revenues were boosted by strong sales in China and Hong Kong.
Total revenue increased by 8% to £2 billion with growth led by the retail division where sales increased by 12% to £1.4 billion. The retail division now accounts for 71% of total sales, up from 68% in the previous year. Wholesale revenue fell by 1%.
Reported profit before tax was down 4% in the year to £351 million due to costs relating to the termination of a fragrance and beauty licence relationship.
Sales in China, where the retailer has 69 stores, soared by 20% in the year. Burberry plans to open eight further stores in the country in the current financial year, including three in the flagship market of Shanghai.
Despite the strong retail sales, Burberry said that growth was uneven with comparable store sales increasing year-on-year by 6%, 1%, 6% and 8% each quarter, a slowdown from the double-digit growth seen in 2011/12.
Store traffic was soft, offset by increased conversion rates and higher average transaction values. The group said its online traffic and conversion grew significantly and that digital engagement had reached "record levels."
Commenting on the results, Angela Ahrendts Burberry chief executive, said: "Finishing the year with a strong retail performance both online and offline, Burberry achieved record revenue and profit in 2012/13.
"Looking ahead, although the macro environment remains uncertain, Burberry is well positioned with opportunity by channel, region and product. With the integration of Beauty in April, we have added another exciting growth platform.
"Our brand momentum, proven strategies and closely connected global team provide confidence in Burberry's future performance."
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