Business

Burberry fashion brand reports 40% profit rise

Media captionWatch: Angela Ahrendts of Burberry says China 'is like any other luxury market'

Strong sales of leather bags and other accessories have boosted profits at luxury fashion brand Burberry.

Profits for the 12 months to the end of March were £296m, up 40% on a year ago, with revenues up 27% to £1.5bn.

Burberry said its focus on non-apparel had paid off, as the sector accounted for nearly half of its sales growth.

It is planning a 12-13% increase in average retail selling space in the coming year, with a bias towards China, Latin America and the Middle East.

Burberry - famed for its camel, red and black check pattern - said it would open between 20 and 25 new stores this year, despite tough economic conditions.

"With a strong financial position, Burberry will continue to invest for growth in the current year," the company said.

Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said: "For the moment Burberry remains a rare and notable example of a retailer enjoying a stellar growth trajectory."

But he warned that, "the company remains exposed to changes in demand for luxury goods, which in turn is connected to general global economic health".

Burberry raised its full year dividend by 43% to 20p a share.

It predicted a small rise in its profit margin this year, although it said that would be depressed in the first six months by its investments.

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