(RTTNews) - UK-based luxury goods manufacturer Burberry Group Plc (BRBY.L: News ) reported Tuesday a decline in pre-tax profit for the first half of fiscal 2010, reflecting higher operating expenses, despite growth in revenues. The company increased its interim dividend by 4% and backed its second half and fiscal 2010 segmental forecast.

Burberry's first-half profit before taxation declined to GBP 78.4 million from GBP 97 million in the same period a year ago.

The latest first-half results included restructuring costs of GBP 4.2 million relating to the company's cost efficiency program, while prior year results included credit of GBP 1.7 million representing negative goodwill on the formation of the Burberry Middle East joint venture.

On an adjusted basis, the company's pre-tax profit was GBP 82.6 million, including a GBP 6.7 million benefit from exchange rates, while prior year's adjusted pre-tax profit was GBP 95.3 million.

On an after-tax basis, profit for the period attributable to equityholders of the company was GBP 56.8 million or 12.9 pence per share, lower than last year's GBP 74.8 million or 17.0 pence per share.

Adjusted attributable profit for the period fell to GBP 59.8 million from GBP 67.2 million last year, and adjusted earnings per share declined to 13.6 pence from 15.3 pence a year ago.
The company's six-month revenue, as announced on October 14, rose 6% to GBP 572.4 million from GBP 539.1 million in the prior year period. Meanwhile, revenue on an underlying basis, excluding a GBP 60 million benefit from exchange rates, dropped 5% from last year.

In the retail segment, total sales for the period was GBP 311.6 million, up 27% on a reported basis and up 14% on underlying basis, attributed to new space and Burberry Middle East. Retail sales accounted for 54% of total revenue in the first half, up from 45% a year ago. First-half comparable store sales growth was 2%, or up 4% excluding Spain, and the second-quarter comparable store sales growth was 5%.

Wholesale revenue for the first half declined 15% year-over-year to GBP 216.1 million, and the drop was 23% on an underlying basis, which was slightly ahead of guidance of about 25% drop given in April 2009. The company noted that the decline in underlying revenues reflected the company's certain actions, including the closure of Thomas Burberry as part of the global cost efficiency program, the continued planned rationalization of many small specialty accounts in Europe and the conversion of Burberry Middle East from wholesale to retail. Lower shipments of the Autumn/Winter 2009 collections in all regions of the world also reduced the revenues.

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