Burberry announces slide in net profits

British luxury clothing and accessories firm Burberry on Wednesday said its net profits slumped by more than a quarter in the group's first half following a sizeable one-off charge. Burberry said profit after tax dropped to £85 million ($136 million, 106 million euros) in the six months to September 30 compared with net earnings of £117.2 million in the first half of its 2011/12 financial year. The group was hit by a one-off charge of £73.8 million related to the termination of a fragrance and beauty licence deal. Burberry had meanwhile in September warned that its second-quarter earnings were impacted amid economic slowdown in key market China. The company, famous for its trench coats and trademark red, camel and black check design, added on Wednesday that profit before tax and exceptional items grew by 7.0 percent to £173.4 million during its first-half. That beat analysts' consensus forecast of £169 million, according to a survey by Dow Jones Newswires. Revenues grew 6.0 percent to £882.5 million. "Given the company's leverage to China, either directly or through Chinese tourists visiting Europe, we see the recent improvement in Chinese economic data as very positive for Burberry's prospects," Dolmen stockbrokers said in a note to clients. Burberry's share price fell 0.64 percent to stand at 1,244 pence in midday trading on London's benchmark FTSE 100 index, which was up 0.20 percent at 5,896.73 points. The group also announced it was raising its interim dividend by 14 percent to eight pence a share. Burberry shares tumbled by a fifth in just one day during September, but have since recovered, after the British firm said it expected annual profits to be at the bottom end of analysts' expectations. Burberry was meanwhile to bring its perfume business totally in-house early next year following the end of a licence relationship with French company Interparfums. "Integrating fragrance and beauty is a significant brand and business opportunity," Burberry chief executive Angela Ahrendts said in Wednesday's earnings statement. "One consistent brand expression, leveraged across all categories, will underpin future growth in the beauty division and our existing core business," she added.