Strong quarterly Asian sales haven’t prevented Burberry from warning that profits could be under siege from further currency gusts. If the current exchange volatility persists, Burberry claims profits could be snipped by £55m. Still, revenues for the last three months are 10% up on last year, hitting £370m, while like for like sales were upped 12%.
Sales were strongest – double digit growth – from Asia Pacific and the Americas. Europe, Middle East, India and Africa, however, saw low single digit sales improvement. Burberry’s Beauty division impresses: wholesale revenue, said the company, “is still expected to grow by about 25% at constant exchange rates in 2015”.
Of growing concern for Burberry investors, though, is the company’s annual general meeting (just before going to press). The remuneration payouts for Burberry boss Christopher Bailey has alarmed some investors, not least a £440,000 cash allowance conjoined to a shares package deal worth up to £20m.
Burberry claims the recent pay allowances are in line with improved company performance (earlier this year Burberry claimed record profits and revenues with pre-tax profits rising to £461m while revenues lifted to £2.33bn). However, the sticking point is that two Bailey share awards in 2010 and 2013 were not based on performance.
Still, the exchange rate nervousness had little impact on Burberry’s share price, which climbed 2.26% to 1451p shortly after its trading update. Burberry shares still remain some distance off their September 2013 1,667p peak.
Adrian Holliday, London
