Burberry has reported an on-year decline in profits for the six months to 30 September. The English luxury fashion house's adjusted profit before tax was £146m ($181.29m) for the period, down 24% on an underlying basis, which strips out exchange rate movements.
On a reported FX basis, which takes into account currency movements, this was down just 4%. Burberry's adjusted retail and wholesale profit was down 19% on an underlying basis. The planned expiry of Japanese licences alone had led to an £11m decline in licensing profit.
Burberry's revenues stood at £1.16m, down 4% on an underlying basis, but up 5% on a reported FX basis. While the growth in retail revenues was led by strength in the UK, it was offset by a decline in revenues from its wholesale and licensing business.
The London-based firm's profit before taxation was down 34% on-year at £102m ($126.60m), "after adjusting items reflecting strategic actions".
Some of the adjusted items included a £26.1m charge in reported operating expenses relating to the fragrance and beauty licence intangible asset; a £12.8m charge in reported operating expenses relating to restructuring costs and a £4.3m charge relating to deferred consideration on the purchase of the non-controlling interest in Burberry Middle East. Another item was a £1m charge in reported net finance charge related to its Chinese business.
Net cash holding was more than last year, at £529m, about 15% higher year-on-year.
As for capital returns to shareholders, of the £100m Burberry had planned in share buybacks, £34m was completed in the first half. An additional £50m buyback scheme will be commenced after the completion of this initial scheme. The company has also reported an interim dividend of £0.11, up 3% from 2015.
Christopher Bailey, CEO at Burberry, said in a statement: "In May we outlined plans to evolve how we work as a business and to drive Burberry's future growth in a rapidly-changing luxury environment. Since then, we have made good early progress towards realising the significant opportunities ahead of us, as we begin implementing our five strategies. We remain on track to deliver our financial goals."