Burberry's flagship store in Shanghai Getty

Burberry today (18 May) posted a dip in annual profits due to lower wholesale and licensing sales, highlighting the scale of the task for the luxury retailer's incoming boss.

The group, which is known for its trenchcoats, said pre-tax profit fell 5% to £394.8m ($439.75m) in the year to the end of March compared to a year ago, due to lower wholesale revenues in the US and the expiry of a Japanese licence.

In what the British business called a year of "transition" the group said it had hit cost savings of £20m over the past 12 months. It planned to make savings of around £50m this financial year, and "at least" £100m of cost cuts in 2019.

It added that leather goods and bags had demonstrated "mid teens growth" in the period.

The FTSE 100 business has grown strongly over the past decade, but has struggled in recent years, as sales in its key Asian markets have slowed.

Current chief executive Christopher Bailey will become the group's president when Marco Gobbetti, the former boss of French fashion house Céline, takes over as chief executive in July.

Bailey said: "2017 was a year of transition for Burberry in a fast-changing luxury market.

"With Marco Gobbetti's extensive experience in the sector, we will build on these foundations to elevate and strengthen the brand further and take Burberry to the next level as a global luxury retail and digital business."

Analysts at Hargreaves Lansdown said: "The message from the company is that, finally, their efforts to steady the ship and turn her around are starting to pay off. Costs are being cut, with £20m off the cost base last year and another £50m to come in the current year."

Shares lifted almost 2% in early trading.