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Burberry Group posts excellent growth in all regions
19
Nov '08
Burberry Group plc, the global luxury company, today announces its unaudited results for the six months ended 30 September 2008.

Financial highlights:
–Adjusted operating profit of £98.4m up 3%; up 7% excluding new HQ/SAP costs of £3.8m
–Profit before tax up 1 % and reported EPS up 14%, benefiting from tax adjustment relating to prior years

Group financial highlights:
–Revenue up 20%, 13% on an underlying basis. Exchange rates increased revenue by £31m.
-Adjusted operating profit up 3% or 7% excluding Horseferry/SAP costs of £3.8m. Exchange rates increased profit by £3.5m.

Adjusted operating margin of 18.3% (2007: 21.2%), with approximately 100 basis points of the decline due to the planned lower proportion of revenue from licensing.

Operational highlights:
By channel-
•Retail revenue up 21 % (14% underlying); comparable store sales growth of 3%; opened a net five mainline stores
•Wholesale revenue up 23% (15% underlying); Americas, Europe and Emerging Markets all performed strongly
•Licensing unchanged (down 3% underlying); good growth in global product licences especially fragrances

By region-
•Double-digit growth in all regions, except Spain
•Joint venture formed in Middle East - a high growth Emerging Market
•Joint venture being finalised for non-apparel in Japan - largest luxury accessories market in the world

By product-
•Double-digit growth in all product categories
•Non-apparel up 20% to contribute 31 % of revenue
•Outerwear and innovative check performed strongly

Outlook:
•In line with other luxury companies, trading has become more difficult since start of second half, particularly in the United States
•Peak season trading to come; if initial trends continue, adjusted profit before tax would be in mid to lower half of current range of market expectations
•Cost efficiencies of £15-20m for 2009/10 already identified, enabled by investments made in supply chain, IT and infrastructure; reviewing further significant savings to underpin profitability going forward
•Strategies remain strong to drive out performance and long-term value creation

Angela Ahrendts, Chief Executive Officer, commented:
"The fundamentals of Burberry remain strong, despite the current very challenging environment. With our supply chain and IT investments in their final phases, we are now in a position to drive significant efficiencies in the near term.

These benefits, along with continued investment in the business, our seasoned management team, strong brand perception and proven strategies underpin our confidence in the future long-term growth of Burberry.

I am also delighted today to announce two joint ventures with long-standing partners - the first in the Middle East and the second for non-apparel in Japan - both of which will accelerate our growth in these key regions."

Burberry Group


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