The recovery of the Burton retail group took a significant step forward yesterday when it reported a 140 per cent increase in profits to pounds 98.6m for the year to September and increased its dividend for the first time in three years.
The company also reported a 4.4 per cent increase in like- for-like sales figures for the nine weeks since 2 September, a better performance than many rival clothing retailers. Earlier this week Marks & Spencer said UK clothing sales had fallen over the last three months.
Before exceptional items, Burton's pre-tax profit increased from pounds 41m to pounds 93m in the year.
Although Burton's shares rose 5p to 110p on the news, the chief executive, John Hoerner, immediately moved to dampen enthusiasm by saying that current trading was "fragile".
He expressed concern that the warm early autumn weather may force rivals to cut prices in order to shift excess stock. "We are pleased with the profit performance but we are very, very cautious about current trading."
The company plans to expand its Debenhams department store chain by adding another 12 stores over the next five years to take the total to 100. A store in Leeds will open in 1997. Others are planned for Dublin, Barrow, and Brighton.
Burton also announced yesterday that it had acquired the lease on the flagship Top Shop site at London's Oxford Circus for pounds 94.5m. Burton sold the building to Heron International and broker Strauss Turnbull for pounds 55m four years ago.
The deal follows the pounds 42m purchase of the Debenhams site on Oxford Street in September.
The chain store formats, which include Burton Menswear, Top Shop and Dorothy Perkins, moved from a pounds 15m loss to a pounds 20m profit, boosted by a move away from discounting and the impact of store refurbishments. The Debenhams stores also improved profit from pounds 71m to pounds 82m.
The dividend was increased from 2p to 2.2p
Burton is also proposing a long-term share plan for its 270 senior executives that will replace the existing share option scheme.
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