9th Nov 2016 07:27
LONDON (Alliance News) - Luxury fashion retailer Burberry Group PLC on Wednesday reported lower pretax profit for the first half of its financial year due to the costs of its strategic review, but said its sales were given a boost by the weak pound.
The FTSE 100 constituent said it made a pretax profit of GBP102.0 million in the six months to September 30, down from GBP154.7 million a year before. The bottom line was hit by higher operating costs as the group works to improve its product offering and the efficiency of its retail space, while boosting its brand equity.
In addition, Burberry's profit took a hit from a fall in retail and wholesale profit and from licensing profit in the half.
Revenue for the half rose to GBP1.16 billion from GBP1.10 billion, boosted by the weak pound and Burberry's high exposure to overseas sales. In constant currencies, revenue fell 4.0%.
Sales were dragged lower by continued softness in Asia-Pacific and the Americas, which offset better sales in Europe and a particularly good performance in the UK, where the weak pound encouraged tourists to come to London and buy Burberry goods. Like-for-like UK sales were up 30% in the first half, the company said.
Burberry said it will pay an interim dividend of 10.50 pence per share, up 3.0% year-on-year, and said it will launch an additional GBP50.0 million buyback on top of its existing GBP100.0 million buyback programme, of which GBP34.0 million was completed in the first half.
"In May we outlined plans to evolve how we work as a business and to drive Burberry's future growth in a rapidly-changing luxury environment. Since then, we have made good early progress towards realising the significant opportunities ahead of us, as we begin implementing our five strategies. We remain on track to deliver our financial goals," said Christopher Bailey, Burberry's chief creative officer and outgoing chief executive.
Bailey is to remain chief creative officer of the company but will relinquish the CEO post to Marco Gobbetti, who joins from his role as the head of French high-end fashion house Celine. Gobbetti is due to join in 2017.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Burberry