- First-half pre-tax profits up 9% to £155m
- Burberry has found £20m in savings from clampdown on discretionary spend
- Boss Christopher Bailey hails ’robust’ performance amid tough luxury market
Burberry has increased profits despite flat revenues in its first half after a reduction in performance-related pay and a crackdown on discretionary spend.
Pre-tax profits increased by 9% to £155m for the six months ending September 30, while revenue remained unchanged year on year at £1.1bn.
A clampdown on discretionary costs and performance-related pay helped Burberry increase adjusted operating profits by 5%.
Burberry has saved around £20m from more tightly managing costs including hiring, travel and expenses. The reduction of performance-related pay has resulted in savings of £30m. It has also found efficiencies by moving to one label from three and upgrading its core IT platform.
Burberry chief creative and chief executive officer Christopher Bailey said: “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.”
Burberry added that comparable sales since the start of the third quarter have improved compared with the second quarter.
The luxury retailer is also in the process of transforming its Japanese operation, which has meant a 13% drop in its licensing profits as it takes on additional costs after letting the Japanese licence expire.
Burberry’s other key initiatives include increasing its capacity to manufacture trench coats in Yorkshire and expanding its global distribution of its beauty ranges.