Burberry has posted a dip in revenue and profits for the 2016 financial year and has unveiled an “ambitious three-year” plan to drive growth, improve productivity and cut costs.
In the 12 months to 31 March 2016 the British luxury house posted revenues of £2.5bn, down 1% underlying. Comparable sales were down 1% and would have been up 3% if the challenging markets of Hong Kong and Macau were stripped out of the numbers. Adjusted pre-tax profit was down by £35m (or 10%) to £421m underlying.
Burberry noted it had made some significant operational progress in the past year including a £25m saving on discretionary costs, the move to one runway show for men’s and womenswear, product innovation including its scarf bar, runway rucksacks (pictured above) and new Mr Burberry fragrance as well as new flagship stores in New York, Seoul and Tokyo.
A sweetener to shareholders was offered in the form of an increased dividend of 37p, up 5%.
Christopher Bailey, chief creative and chief executive officer, said he anticipated the challenging conditions for luxury to continue but that Burberry saw “significant opportunities ahead of us”.
“[We] have put ambitious plans in place to increase future revenue, enhance productivity and create a more efficient organisation. In addition, the capital allocation framework announced today prioritises the investment needs of the business and regular dividend payments to our shareholders, while balancing capital efficiency and flexibility,” Bailey said.
Recent reports have suggested that Burberry is looking to appoint a senior executive to support Bailey as analysts believe the combined role of chief creative and chief executive officer to be too large.
