13th Apr 2005 07:00
Burberry Group PLC13 April 2005 Burberry Group plc Second Half Trading Update Burberry Group plc reports on trading for the six months ended 31 March 2005. Highlights • Total revenue increased by 6% on an underlying(1) basis • Retail sales rose by 6% underlying driven by new stores • Wholesale sales increased by 5% underlying driven by Spring/Summer 2005 season sales • Licensing revenue increased by 8% underlying • Minimum EBITA of £162 million for 2004/05 • 2005/06 plans - increase average net retail selling space by approximately 8% - first half wholesale revenues broadly flat relative to the previous year based on orders to date for the Autumn/Winter 2005 season - more moderate growth in licensing revenue relative to the second half of 2004/05 Second Half Full Year------------------------------------------------------------------------------------------------------------------------ 2004/05 2003/04 % change 2004/05 2003/04 % change------------------------------------------------------------------------------------------------------------------------£ million Reported Underlying Reported Reported Underlying Reported Underlying Reported Reported Underlying (2) (1) (2) (2) (1) (2) ------------------------------------------------------------------------------------------------------------------------Retail 155 163 153 1 6 265 279 257 3 8Wholesale 174 179 171 2 5 372 382 351 6 9Licence 39 39 36 8 8 78 80 67 17 19------------------------------------------------------------------------------------------------------------------------Total 368 380 360 2 6 716 740 676 6 10 (1) Underlying figures are calculated at constant exchange rates(2) Calculated at average annual exchange rates Commenting on the trading results, Rose Marie Bravo, Chief Executive, stated,"Burberry continued to manage for the bottom line, delivering a solid result forthe half. This will allow the Group to achieve EBITA ahead of expectations forthe 2004/05 financial year. Looking forward, we continue to be encouraged by thevitality of the Burberry brand and the opportunities it presents." Total revenue Total revenue in the six months to March 2005 increased by 6% on an underlying(1) basis (i.e. at constant exchange rates), 2% reported, compared to the sameperiod last year. Retail Underlying retail sales in the second half increased 6% (1% reported), driven bycontributions from newly opened and refurbished stores. In addition to the fourstores and concessions opened in the third quarter, the Group opened a net fourconcessions during the fourth quarter. On a year on year basis, average netretail selling space increased approximately 8% in the half. In aggregate, fourth quarter retail performance was consistent with that of thethird quarter. In the US, as the result of a muted consumer response to earlyspring women's fashion styles and significant store renovation activity, salesgrowth was driven by space additions. Similarly, new stores and concessionsdrove sales growth in Continental European markets, which had achieved stronggains in the previous year period. The UK market continued to be soft. In Asia,sales in Korea continued to be volatile as a result of the challenging retailenvironment resulting in a small gain for the quarter. Hong Kong and SoutheastAsia achieved robust gains in the period. Wholesale Total wholesale sales increased by 5% on an underlying basis, 2% reported,during the second half driven by solid sales growth for the Spring/Summer 2005season. By region, growth was led by strong gains across Asian markets.Continental European markets achieved good growth. Following strong gains in theprevious year, US wholesale sales increased marginally in the half. Strong gainsin new and emerging markets also contributed to the increase. In conjunctionwith local partners, the Group opened seven franchised stores in the half,including a new store in Beijing. Licensing Total licensing revenue in the second half increased 8% on an underlying basis,8% reported. In Japan, aggregate volumes declined as a result of licenseecancellations/transitions, Burberry's programme to reduce selectively thedistribution of certain products in that market and a soft apparel environment.This decline was partially offset by increases in certain royalty rates. Globalproduct licences drove gains in the half led by the continued strong performanceof fragrance products. At the Annual Fragrance Foundation awards held last weekin New York City, Burberry Fragrances won three awards, including best men'sfragrance for Burberry Brit for Men. 2005/06 plans In line with the ongoing execution of its core growth strategies, Burberry'splans for the 2005/06 financial year include: • An approximate 8% increase in average net retail selling space through the addition of stores and concessions. In the US, the Group has signed leases for new stores in Naples, Florida; San Antonio, Texas; San Diego, California and Atlantic City, New Jersey. Burberry has also signed a lease for a new store in Madrid, Spain, which is expected to open in spring 2006.• First half wholesale sales broadly flat relative to the previous year based upon orders received to date for the Autumn/Winter 2005 season.• More moderate licensing revenue growth relative to the second half of 2004/05 - revenues from Japan are expected to decline moderately for the year as a result of Burberry's programme to reduce selectively the distribution of certain products in this market, a soft apparel environment and licensee cancellations/ transitions - global licensees are expected to continue to produce strong gains Burberry will announce its preliminary results for the year ended 31 March 2005on 24 May 2005. Enquiries: Burberry 020 7968 0577 Stacey Cartwright CFOMatt McEvoy Strategy and IRJohn Scaramuzza Strategy and IR Brunswick 020 7404 5959 Susan GilchristLaura CummingsRobert Gardener The financial information contained in this Trading Update has not been audited. Certain statements made in this Trading Update are forward looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual results to differ materiallyfrom any expected future results in forward looking statements. This announcement does not constitute an invitation to underwrite, subscribe foror otherwise acquire or dispose of any Burberry Group plc or GUS plc shares.Past performance is not a guide to future performance and persons needing adviceshould consult an independent financial adviser. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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