Source : EuropeanMarkets
Christopher Bailey, Chief Creative and Chief Executive Officer, commented:
“This robust performance reflects decisive action as the external environment became more challenging in key markets over the period. We enter the second half mindful of this backdrop, but confident in our strongest-ever festive plans and emphasis on productivity and efficiency.
Beyond these immediate priorities, we remain focused on building Burberry for long-term, sustainable growth and value creation. In an evolving luxury environment, we see compelling opportunities by channel, region and product, underpinned by the strength and distinctiveness of our authentic British brand.”
Highlights for the six months to 30 September 2015
• Robust financial performance in a challenging environment for luxury
- Revenue £1,105m, unchanged year-on-year
- Adjusted retail/wholesale profit up 5% underlying (up 4% at reported FX)
- As planned, licensing profit down 13% underlying, as Japanese licences expire (down 21% at reported FX)
- Resulting in adjusted profit before tax of £153m, up 3% underlying
- Reported PBT £155m (2014: £142m), up 9%
- Net cash of £459m at September 2015 (2014: £307m)
- Interim dividend up 5% to 10.2p
• Further building brand and business momentum
- Over 11m views of our festive film across social platforms within first 48 hours
- Combining our three labels to reduce complexity for customers and our business
- Increasing our capacity to manufacture trench coats in Yorkshire, England
- Making good progress in transforming Japanese operations
- Expanding global distribution of Beauty in store and online with key partners
- Comparable sales since the start of Q3 have improved relative to Q2
Outlook
Retail: In FY 2016, net new space is expected to contribute low single-digit percentage growth to total retail revenue.
Wholesale: Burberry expects total wholesale revenue at constant exchange rates in the six months to 31 March 2016 to be broadly unchanged on the same period last year (H2 2014/15: £331m).
• In apparel and accessories, an underlying mid single-digit percentage decline reflects
cautious ordering by wholesale customers globally, as well as the re-phasing of orders
in the Americas into the first half from the second half of this year.
• Double-digit percentage underlying growth is expected in Beauty in the second half,
driven by sales to distributors of our new male fragrance, Mr Burberry, offset by some destocking.
Retail/wholesale profit: In FY 2016, if exchange rates* remain at current levels, our latest expectation is that there will be no material benefit to FY 2016 reported retail/wholesale profit compared to FY 2015 rates. This compares to an expected benefit of about £10m at the time of the First Half Trading Update based on 30 September 2015 effective rates.
Licensing: Total licensing revenue for FY 2016 is planned to be down by about 40% at constant exchange rates (FY 2015: £68m), due to the expiry of the Japan Burberry licences. For FY 2016, we continue to expect double-digit percentage growth from the global product licences and about £25m revenue from Japan. At current exchange rates*, the impact of the movement in the sterling/yen rate on reported licensing revenue in FY 2016 is not expected to be material.
Capital expenditure: Spend of around £180m is still planned for FY 2016.
Christopher Bailey, Chief Creative and Chief Executive Officer, commented:
“This robust performance reflects decisive action as the external environment became more challenging in key markets over the period. We enter the second half mindful of this backdrop, but confident in our strongest-ever festive plans and emphasis on productivity and efficiency.
Beyond these immediate priorities, we remain focused on building Burberry for long-term, sustainable growth and value creation. In an evolving luxury environment, we see compelling opportunities by channel, region and product, underpinned by the strength and distinctiveness of our authentic British brand.”
Highlights for the six months to 30 September 2015
• Robust financial performance in a challenging environment for luxury
- Revenue £1,105m, unchanged year-on-year
- Adjusted retail/wholesale profit up 5% underlying (up 4% at reported FX)
- As planned, licensing profit down 13% underlying, as Japanese licences expire (down 21% at reported FX)
- Resulting in adjusted profit before tax of £153m, up 3% underlying
- Reported PBT £155m (2014: £142m), up 9%
- Net cash of £459m at September 2015 (2014: £307m)
- Interim dividend up 5% to 10.2p
• Further building brand and business momentum
- Over 11m views of our festive film across social platforms within first 48 hours
- Combining our three labels to reduce complexity for customers and our business
- Increasing our capacity to manufacture trench coats in Yorkshire, England
- Making good progress in transforming Japanese operations
- Expanding global distribution of Beauty in store and online with key partners
- Comparable sales since the start of Q3 have improved relative to Q2
Outlook
Retail: In FY 2016, net new space is expected to contribute low single-digit percentage growth to total retail revenue.
Wholesale: Burberry expects total wholesale revenue at constant exchange rates in the six months to 31 March 2016 to be broadly unchanged on the same period last year (H2 2014/15: £331m).
• In apparel and accessories, an underlying mid single-digit percentage decline reflects
cautious ordering by wholesale customers globally, as well as the re-phasing of orders
in the Americas into the first half from the second half of this year.
• Double-digit percentage underlying growth is expected in Beauty in the second half,
driven by sales to distributors of our new male fragrance, Mr Burberry, offset by some destocking.
Retail/wholesale profit: In FY 2016, if exchange rates* remain at current levels, our latest expectation is that there will be no material benefit to FY 2016 reported retail/wholesale profit compared to FY 2015 rates. This compares to an expected benefit of about £10m at the time of the First Half Trading Update based on 30 September 2015 effective rates.
Licensing: Total licensing revenue for FY 2016 is planned to be down by about 40% at constant exchange rates (FY 2015: £68m), due to the expiry of the Japan Burberry licences. For FY 2016, we continue to expect double-digit percentage growth from the global product licences and about £25m revenue from Japan. At current exchange rates*, the impact of the movement in the sterling/yen rate on reported licensing revenue in FY 2016 is not expected to be material.
Capital expenditure: Spend of around £180m is still planned for FY 2016.
Source : Press Release Burberry Group plc, Brunswick (UK), November 12, 2015
