Burberry shares rally after H1 performance meets forecasts
City Index November 14, 2013 2:05 PM
<p>Shares in luxury retailer Burberry rose around 2% early in trading on Thursday after the firm reported that total revenues exceeded £1bn: thanks in part […]</p>
Shares in luxury retailer Burberry rose around 2% early in trading on Thursday after the firm reported that total revenues exceeded £1bn: thanks in part to a 20% increase in retail revenues to £695m.
First half adjusted profits before tax – which the firm said a month ago would likely come in at around the same £173m mark as a year ago – came in at £174mn. Interim dividends were hiked by 10% to 8.8p per share.
In terms of its forward looking guidance, Burberry forecast that for the full year (2013/2014) it expects underlying wholesale revenues (excluding beauty) to grow by mid to high single digital percentages (5%-9%) and retail revenues to grow by low to mid-single digital percentages (2%-5%).
This is a solid earnings report that will not in its own right immediately boost shareholder sentiment but it will help to calm any lingering doubts about the rest of the year’s performance and the ability of the firm to meet guidance, despite the end of Angela Ahrendt’s tenure as CEO next year.
Shares need to break above 1600p
Shares remained in a wide consolidation phase between 1600p (upper range) and 1120p and 1000p (lower ranges) for the best part of two-and-a-half years. Traders have been happy to swing trade between this range but we need to see a breakout outside of this consolidation phase in order to see new highs or lows and find a more definitive price trend.
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