Rumours are flying that Burberry (BRBY) is on the hunt for help to ensure chief creative and chief executive officer Christopher Bailey hits the group's predicted growth targets. Chief financial officer Carol Fairweather wouldn't confirm or deny the whispers, suffice to say the company is looking for new recruits with more specific skills "across the organisation". Mr Bailey’s appointment as joint business and creative head in late 2013, taking over the former responsibility from Angela Ahrendts, was met with raised eyebrows. Usually in luxury retail, design and finance are kept wholly separate.
Better staffing is not the only part of Burberry's new recovery plan, though. The company also intends to claw back annual savings of £100m by 2019 through a new cost-cutting exercise, equivalent to roughly 10 per cent of operating expenses. It has also capped capital expenditure at £150m. Rather than focus on new openings, Ms Fairweather said any financial outlay would go towards store refurbishments and investment in digital operations.
The runway format is also due to change: Burberry plans to combine its menswear and womenswear collections, and to sell immediately after the show is finished, rather than waiting the usual six months to deliver product into stores. The product range is also a work in progress. Burberry plans to tailor its ranges to fit local shoppers, in a bid to encourage better customer retention and fuel sales growth.
As far as its Asia operations are concerned, Burberry bosses are staying positive for now. Ms Fairweather cited industry reports which claim most of the sector's growth will still come from Chinese customers, either when they shop abroad or at home. In fact, so bullish are Burberry's board that it has announced an annual rise in the dividend which takes the payout ratio to 53 per cent. It will also commence share buybacks in the 2017 financial year up to the value of £150m.
Analysts at Morgan Stanley expect EPS of 63.1p for the year ending March 2017, compared with 69.9p in FY2016.
Click here for an interactive infographic on Burberry, including a potted history of the company.
| BURBERRY (BRBY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,116p | MARKET VALUE: | £4.97bn | |
| TOUCH: | 1,115-1,116p | 12-MONTH HIGH: | 1,822p | LOW: 1,047p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 352p | NET CASH: | £660m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.86 | 366 | 60.4 | 25.0 |
| 2013 | 2.00 | 351 | 58.3 | 29.0 |
| 2014 | 2.33 | 444 | 73.6 | 32.0 |
| 2015 | 2.52 | 445 | 76.4 | 35.2 |
| 2016 | 2.51 | 416 | 70.0 | 37.0 |
| % change | - | -7 | -8 | +5 |
Ex-div: 7 Jul Payment: 5 Aug | ||||
