Financial News

2005/06 PRELIMINARY RESULTS

25 MAY 2006

Burberry Group plc reports preliminary results for its financial year to 31 March 2006.

Summary of Results(1)

Year to 31 March
2006
£m		2005
£m 		Change
%
Turnover(2)742.9715.5 4
Operating profit before Atlas costs(3)165.6161.3 3
Operating profit 154.5161.3 (4)
Attributable profit for the year 106.4111.9 (5)
Diluted EPS before Atlas costs 24.1p22.2p 9
Diluted EPS 22.3p22.2p 0
Diluted weighted average number of Ordinary Shares 477.6m504.5m(5)

Financial Highlights

  • Total revenues increased 3% on an underlying(4) basis to £742.9 million
    • Retail revenue increased 11% underlying
    • Wholesale revenue declined 4% underlying
    • Licensing revenue increased 6% underlying
  • Operating profit before Atlas costs increased 3% to £165.6 million
  • Operating margin before Atlas costs of 22.3% vs 22.5% in prior period
  • Diluted EPS before Atlas costs increased 9% to 24.1p
  • Continued strong free cash flow with £79 million generated in the year
  • Completed £250 million share repurchase programme with £192 million repurchased during 2005/06
    • Achieved targeted cash neutral capitalisation
  • Final dividend of 5.5p per Ordinary Share proposed
    • 8.0p for full year, a 23% increase

Strategic and Operating Highlights

  • Advanced retail strategy through key investments
    • Opened 12 new stores and outlets and a net 9 new concessions

    • Completed 7 significant store renovations
    • Converted 72 womenswear doors to retail concessions in Burberry’s largest wholesale market, Spain
    • Acquired 12 retail locations in Taiwan
  • Continued progress in product design and development
    • Strengthened core outerwear lines
    • Increased frequency of new product flow to stores

    • Burberry Creative Director named Designer of the Year by British Fashion Council
  • Outstanding growth in emerging markets
  • Prepared for direct distribution of selected international products in Japan
  • Launched major new fragrance, Burberry London, in spring 2006
  • Project Atlas fully embedded in the organisation
    • Re-phased implementation to enhance long-term benefits
  • Commenced celebration of Burberry’s 150th year
Rose Marie Bravo, Chief Executive, stated, “In a year of transition and investment, the Group achieved solid financial results while advancing a number of strategic initiatives aimed at Burberry’s next stage of development. With a strong spring season underway, we enter our 150th year with confidence in Burberry’s future.”

Management will discuss these results during a presentation to analysts and institutions at 1:00pm today at Merrill Lynch Financial Centre, King Edward Hall, 2 King Edward Street, London EC1A 1HQ (telephone +44 (0) 20 7968 0577). The presentation will also be broadcast live on the Internet at www.burberryplc.com and can be accessed by telephone at +44 (0) 20 7081 7194 (UK and international) and +1 866 432 7186 (US). Replay: +44 (0) 20 8196 1998 (UK and international) and +1 866 583 1035 (US), access number 299766.

Enquiries

Burberry 020 7968 0577
Stacey CartwrightCFO
Matt McEvoyStrategy and IR
John ScaramuzzaStrategy and IR
Brunswick 020 7404 5959
Susan Gilchrist
Robert Gardener
Alex Tweed

(1) Financial results are reported under International Financial Reporting Standards. Prior year figures have been restated in line with these principles.
(2) Turnover differs from the £753 million reported in the Second Half Trading Update on 12 April 2006 due to a change in foreign currency translation methodology. Following its demerger from GUS plc, the Group plans to convert financial results monthly based upon average exchange rates for each month. Previously, Burberry applied the year’s cumulative average exchange rates to the period reported. This new methodology will be adopted in 2006/07. Reported results presented here for the 2005/06 financial year are consistent with this new methodology.
(3) Project Atlas costs of £11.1 million (2005: nil) relate to the Group’s infrastructure redesign initiative announced in May 2005.
(4) Underlying figures exclude the financial effect of the Taiwan Acquisition and the portion of Burberry’s business in Spain affected by the retail conversion, in both reporting periods. In addition, underlying figures are calculated at the same exchange rates used in the 2004/05 year’s reported results for the period. Burberry completed the acquisition of the operations and assets of its distributors in Taiwan in August 2005 (the “Taiwan Acquisition”) and initiated actions related to the retail conversion in Spain during the third quarter of 2005/06.

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements.

This announcement does not constitute an invitation to underwrite, subscribe for or otherwise acquire or dispose of any Burberry Group plc shares. Past performance is not a guide to future performance and persons needing advice should consult an independent financial adviser.

View the full Preliminary Results Announcement in PDF format.


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