Mulberry shares plunge

Shares of UK luxury fashion chain Mulberry sank 22 per cent after annual pre-tax profit and revenue fell short of expectations.

Somerset-based Mulberry, which makes upmarket handbags and leather accessories, said pre-tax profit rose to £36m for the year ended 31 March 2012 compared to £23.3m a year earlier. Analysts had forecast profit of just over £37m. Total revenues increased by 38% to £168.5m, below forecasts of £175m.

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April saw slower growth, but over the last six weeks UK full price sales have improved, up 21% like-for-like. "However, we remain cautious as a result of the adverse macro-economic climate," it said.

Chairman Godfrey Davis said: "While the current economic conditions make the short term trading outlook more challenging in some markets, we remain confident about Mulberry's long term future. We continue to focus on developing our business internationally, opening new stores and building the foundations for long term growth."

The company, which generates 39% of its revenue outside the UK, said International revenue for the year jumped 61% to £65.2m. Mulberry opened 14 stores during the year in the UK, Netherlands, the US and Asia.

The company, which was founded in 1971 by Roger Saul, said it already has 16 international store openings confirmed for fiscal 2013.

The group said Autumn/Winter 2012 third-party wholesale orders are 11% higher than a year earlier.

The company also announced it will build a second factory, in Somerset, doubling its UK capacity and creating 300 jobs.

The investment in a second UK factory, of around £7.5m, will reinforce the group's position as the largest UK manufacturer of luxury leather goods, the group explained.

A dividend of 5p has been proposed compared to 4p in 2011.

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