Shares in Burberry were down on the FTSE 100 in morning trading, despite the group reporting a strong rise in revenue and pre-tax profit in the half year ended 30 September.
Adjusted revenue at the fashion retailer increased 21 per cent to £641 million. Adjusted pre-tax profit rose 49 per cent to £129 million, while reported pre-tax profit jumped 50 per cent to £118 million.
The group said that it had net cash of £181 million, up from £56 million at the end of the same period last year.
Following the results Burberry said that it would be raising its interim dividend by 43 per cent to 5.0 pence per share.
Burberry said that sales of its non-apparel range had increased from 14 per cent to 40 per cent of sales, thanks mainly to strong sales of large leather goods. Sales of apparel rose 13 per cent due to strong outerwear sales. In emerging markets Burberry saw sales increase 46 per cent.
Angela Ahrendts, Chief Executive Officer of Burberry, said, "The Burberry team delivered a strong first half, with adjusted revenue up 21% and profit before tax up nearly 50%. The continued focus on the brand, ongoing investment in our digital, IT and retail infrastructure, especially in China, and a disciplined approach to driving growth underpin our confidence in delivering longterm sustainable returns."
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "The shares may have fallen foul of high expectations in early trade, despite having beaten most analyst forecasts.
"The increase in both margin and in particular profit is stellar, even if this had been largely trailed at the trading update in October. The company continues to expand its overseas presence, which hitherto has been a largely successful addition to its armoury. The breadth of its offering is also being expanded to other platforms and despite ongoing capital investment the company has been able to increase the dividend given the strength of the numbers. The second half may be rather more challenging, however, and the nature of a business focused more towards the luxury end could come under pressure.
"The shares may be taking a pause for breath after a heady rise, fuelled by the performance of the business and sporadic bid speculation surrounding the company. Having risen 70% over the last year (versus a FTSE100 gain of 8%) - and 23% in the last three months alone - the general market view is that the price is up with events for now."
By 10:55 shares in Burberry were down 0.20 per cent on the FTSE 100 to 1,018.00 pence per share.