Burberry jumps as Asia drives record growth - UPDATE

21st May 2013 07:07

Angela Ahrendts, the Chief Executive Officer of Burberry, said that the British luxury brand remains well-positioned with 'opportunity by channel, region and product' after beating expectations in 2012/13.The stock, which sunk back in September after a profit warning, was trading at 52-week highs on Tuesday afternoon after the key Asia Pacific region - widely seen as the firm's engine of growth - helped the company register record annual revenue and profit in the 12 months to March 31st.The firm also raised its full-year dividend by 16% from 25p to 29p per share.Total revenue rose 8.0% from £1,857m to £1,999m, slightly above analysts' forecasts. Sales growth was led by strength in the larger Retail division, which grew by 12% to £1,417m. Both Wholesale and Licensing revenues were broadly flat on the year before. Retail now accounts for 71% of total sales, (compared with 68% the year before), generated from 206 mainline stores, 214 concessions and 49 outlets. However, 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.Adjusted profit before tax was up 14% at £428m, ahead of the consensus estimate of £418m. The stock was up 5.26% at 1,540p by 15:17, with investors seeming to shrug off the guidance for profits in the Retail and Wholesale division to fall in the first half of the current year.Analyst Bethany Hocking from Investec said that this is due to the business becoming more second-half weighted - "this will concern some in the market although the directional trend is as expected. On first view, we don't expect a significant change to consensus."Ahrendts concluded: "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."