Strong financial results
- Revenue up 24% to £1,857m
- Retail/wholesale operating margin 16.4%, up 80bp (H2: up 130bp)
- Adjusted PBT up 26% to £376m; reported PBT up 24% to £366m
- Full year dividend up 25% to 25.0p
- Net cash increased to £338m after £177m investment spend
Strong, balanced foundation supported growth in FY 2011/12
- Retail revenue up 31% underlying; 68% of revenue (H2: 72%)
- Opened 23 mainline stores
- First flagships in Hong Kong, Paris and Taipei
- All regions up double-digit
- Asia Pacific largest region at 37% of retail/wholesale revenue
- Flagship markets in UK and France performed well
By product division
- All product divisions up double-digit
- Non-apparel largest division at 39% of retail/wholesale revenue
- Core outerwear and large leather goods about half of revenue
- Replenishment about 50% of mainline revenue
Investing in front-end growth opportunities in FY 2012/13
Capital expenditure planned at £180-200m
- 12-14% space growth
- Biased to larger format stores in flagship markets, including London, Chicago and Hong Kong
- Customer insight and service
- Innovation in digital marketing and retail
- Further modest improvement in full year retail/wholesale operating margin planned, delivered in H2
All metrics and commentary in the Group Financial Highlights and Business and Financial Review except reported EPS exclude the results of the discontinued Spanish operations.
Adjusted measures exclude:
1. Restructuring costs of nil in 2012 (2011: £1.0m credit relating to the Group’s cost efficiency programme announced in January 2009).
2. The put option liability finance charge relating to the third party 15% economic interest in the Chinese business in 2012 of £10.2m (2011: £3.2m).
3. Losses from discontinued Spanish operations in 2012 of £0.3m (2011: £6.2m).
Underlying change is calculated at constant exchange rates.
Certain financial data within this announcement have been rounded.
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In the year to 31 March 2013, Burberry plans a 12-14% increase in average retail selling space, with a shift from smaller to larger format stores. Burberry expects to open about a net 15 mainline stores, biased towards Emerging Markets and flagship markets with high tourist inflows.
In the six months to 30 September 2012, Burberry projects underlying wholesale revenue to increase by a mid single-digit percentage, despite further rationalisation of the brand’s distribution in both Europe and the United States. Double-digit percentage growth is again expected in key US department store doors, Emerging Markets franchise partners and Asia Travel Retail.
In the year to 31 March 2013, Burberry expects licensing revenue at constant and reported exchange rates to be broadly unchanged year-on-year. The global product licences are again expected to deliver double-digit percentage underlying growth. This will be offset by the planned termination and downsizing of Japanese non-apparel licences.
Retail/wholesale operating margin
In FY 2012/13, Burberry plans to continue to invest in areas such as new stores, marketing and IT to drive growth. While the phasing of revenue and investment is expected to lead to retail/wholesale operating margin being lower in the six months to 30 September 2012 than in the same period last year, Burberry expects to deliver a further modest improvement in the retail/wholesale operating margin in the year to 31 March 2013.
For FY 2012/13, Burberry is planning capital expenditure of between £180-200m. This will be focused on retail expansion, with about one-third of the spend planned in larger format stores, including Regent Street, London, Chicago and Pacific Place, Hong Kong.
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