Buoyant Burberry beats forecasts

LUXURY goods group Burberry topped analysts' expectations with an 18% increase in underlying profits to £78.8m over the first half and a big increase in the dividend.

The group, headed by chief executive Rose Marie Bravo, is also planning to buy back up to £250m shares.

Its shares responded with a 22p surge to 417p. Womenswear did particularly well, with underlying sales ahead by 18%, and the new Brit fragrance for men also had a successful launch.

But the group sounded a warning note about the current-state of the retail market. Finance director Stacey Cartright said 'There has been some softness on the retail side, particularly in the United States.'

She added: 'We are outerwear-dominated, so the mild weather has not been particularly kind to us.'

Based on this subdued demand, Burberry said it is 'planning retail sales conservatively for the second half'.

Total sales were ahead by 14%, at £347m and the interim dividend is raised by 33% to 2p.

A big beneficiary will be retail conglomerate GUS, which holds a 66% stake.