British luxury retailer Burberry returned to an operating profit of 54 million pounds in its first half, with revenue and comparable sales both increasing. Adjusted operating profit rose to 62 million pounds. Free cash outflow nevertheless widened as inventories absorbed working capital ahead of peak trading, and the company declared no interim dividend.
Clothing company Burberry returned to an operating profit in the 26 weeks ended 26 September.[1], [2]
The reported result was a profit of 54 million pounds, compared with an 18 million pound loss a year earlier. Adjusted operating profit increased from 19 million pounds to 62 million pounds. Revenue rose 6 per cent to 1,098 million pounds, and comparable retail sales increased 4 per cent.[1]
Free cash outflow widened from 50 million pounds to 147 million pounds. The working-capital outflow rose from 43 million pounds to 197 million pounds. Burberry attributed the inventory increase to a return to normal stock levels ahead of peak trading and earlier deliveries. Capital expenditure fell from 38 million pounds to 32 million pounds. Net debt including leases was 988 million pounds, against 852 million pounds at March-end.[1]
At Burberry, comparable sales grew 12 per cent in the Americas, 7 per cent in Greater China and 3 per cent in the rest of Asia Pacific. Europe, the Middle East, India and Africa together recorded a 2 per cent decline. The adjusted operating margin reached 5.7 per cent. Management anticipates full-year revenue growth and margin expansion at constant exchange rates. No interim dividend was declared.[1]
