City briefs: Burberry and CPP Group

Fashion house Burberry has reported retail revenues of £505m in the 13 weeks ended 2 July 200 (2021: 479m) in a trading update for the first quarter.

Quarter one comparable store sales increased by 1% and were hit by Covid-19 lockdowns in Mainland China.

Excluding Mainland China, comparable store sales grew 16% and for the EMEIA regions comparable store sales grew by 47%.

Jonathan Akeroyd, chief executive officer, said: “Our performance in the quarter continued to be impacted by lockdowns in Mainland China but I was pleased to see our more localised approach drive recovery in EMEIA, where spending by local clients was above pre-pandemic levels.

“Our focus categories, leather goods and outerwear continued to perform well outside of Mainland China and our programme of brand activations boosted customer engagement.

“While the current macro-economic environment creates some near-term uncertainty, we are confident we can build on our platform for growth.”

The business, which has manufacturing bases in Cross Hills, near Keighley and in Castleford, said it began the quarter with around 40% of its distribution disrupted by lockdowns in Mainland China, including its digital hub.

Disruption continued for the first two months but all China stores were fully reopened by the end of the period.

Burberry adds that it continues to target high-single digit revenue growth and 20% margins in the medium term.

The company says it is actively managing the headwind from inflation. Based on the effective foreign exchange rates as of 11 July, it now expects to make a £90m adjusted operating profit in FY23.

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Simon Pyper

Leeds-headquartered CPP Group, a provider of assistance and insurance products, says it expects to report financial results for the six months to 30 June 2022 in line with Board expectations.

The Group, despite global economic headwinds, adds that it continues to record good growth in its key Indian and Turkish markets.

It says Blink, which is the Group’s InsurTech platform servicing the global travel sector, is starting to build a credible proposition around its travel disruption services.

Operationally, the Group is focused on a “change management programme”, which includes the exit from or closure of certain legacy businesses; management of the legacy renewal books; the delivery of a new IT platform for its Indian business; and platform capacity for Blink.

This programme is not expected to conclude until early 2025.

Simon Pyper, CEO, said: “We are at the start of a journey, which once completed will see us transform from a complex to a simplified business focused on providing innovative, embedded and tech-based products and solutions to our growing partner base.

“While there is much to be done, I am confident we are travelling in the right direction and at an appropriate speed.”