Asia Pacific helps Burberry deliver record figures

British luxury brand Burberry hiked its dividend by 16 per cent after strong growth in the Asia Pacific region helped the company register record annual revenue and profit in 2012/13.

British luxury brand Burberry hiked its dividend by 16 per cent after strong growth in the Asia Pacific region helped the company register record annual revenue and profit in 2012/13.

Total revenue in the 12 months ended March 31st rose 8.0% from £1,857m to £1,999m, slightly above Credit Suisse's £1,997m forecast.

Adjusted profit before tax was up 14% at £428m, ahead of Credit Suisse's £417.5m forecast. However, reported profit before tax was down 4.0% at £351m after accounting for exceptional items, including £83m of termination costs of its fragrance and beauty licence relationship with Interparfums.

The firm raised its full-year dividend by 15% from 25p to 29p per share.

"Finishing the year with a strong retail performance both online and offline, Burberry achieved record revenue and profit in 2012/13," said Chief Executive Officer Angela Ahrendts.

Sales growth was led by strength in the larger Retail division, which grew by 12% to £1,417m. This now accounts for 71% of total sales, (compared with 68% the year before), generated from 206 mainline stores, 214 concessions and 49 outlets.

Despite the strength in Retail, the company did admit that growth was uneven with comparable store sales increasing year-on-year by 6.0%, 1.0%, 6.0% and 8.0% each quarter, a slowdown from the double-digit growth registered in 2011/12.

Store traffic was "soft", though this was offset by increased conversion rates and high transaction values. Online traffic meanwhile was "up significantly".

The Asia Pacific region accounted for nearly 40% of total Retail/Wholesale revenue (37% the year before) and grew by 14% during the year, compared with more subdued growth in the Americas (7.0%) and Europe (1.0%). Nearly 90% of Asia Pacific sales came from Retail with China and Hong Kong registering double-digit comparable store sales growth.

Meanwhile, both Wholesale and Licensing revenues were broadly flat on the year before, though Burberry said that Wholesale sales would drop by 10% in the first half of the current year.

Ahrendts said: "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."

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
What does the Coinbase listing mean for bitcoin and other cryptocurrencies?
Bitcoin

What does the Coinbase listing mean for bitcoin and other cryptocurrencies?

As the bitcoin price hit new highs, the world's biggest cryptocurrency exchange, Coinbase, listed on the stockmarket. John Stepek looks at what that m…
15 Apr 2021
Lab-grown meat: the new agricultural revolution
Soft commodities

Lab-grown meat: the new agricultural revolution

Vegan alternatives are taking off, but the future of food technology lies in lab-grown meat – cultivating steaks and burgers from animal cells, says A…
16 Apr 2021