Burberry first half profits jump

Luxury goods group Burberry met forecasts with a 26 per cent rise in first-half profit, helped by buoyant tourist spending around the world, and kept its growth targets despite an uncertain economic backdrop.

"We remain mindful of, and prepared to react to, any local or global uncertainties," said the 155-year-old maker of raincoats and leather goods, which responded rapidly to the 2008-9 recession by cutting jobs and inventories.

Burberry, best known for its camel, red and black check pattern, said it made a profit before tax and one-off items of £162m in the six months to 30 September.

Last month the group beat forecasts with a 29 per cent increase in second-quarter revenue and said it was seeing no sign of slowing demand.

Luxury shares have wobbled in recent months amid a slowdown in economic growth in China – the engine of recent strong demand for high-end goods - and fears the euro zone debt crisis could drag the world back into recession.

Industry heavyweights like LVMH, PPR, Hermes and Hugo Boss have calmed nerves with strong sales figures in recent weeks. However, Cartier jewellery-maker Richemont on Friday struck a cautious tone about the outlook.

Burberry said it was sticking to its goal of increasing retail selling space by about 15 per cent in the second half, including eight to 10 mainline stores in areas like China and Latin America and a new flagship shop in Paris.

The group said it had net cash of £174m and hiked its interim dividend by 40 per cent to 7 pence a share.