Burberry defies credit crunch with 25% profit leap to 196million

The luxury handbags, belts and clothing group enjoyed a 25 per cent jump in profits to £196million on the back of a 17 per cent rise in revenue to £995million for the year ending in March.

Angela Ahrendts, approaching the end of her second year at the helm, insists Burberry has much further to grow, especially in markets such as Russia where rivals LVMH and others have more exposure.

Both Agyness Deyn (left) and Kate Moss (right) have modelled Burberry designs on the catwalk

'Compared to our luxury peers, we are significantly under-penetrated,' she said. 'It will be quite a few years before those markets are tapped out.'

Burberry has been around since 1856, and continues to promote itself as a luxury brand with a particularly British sensibility. But it is a global concern now, and its iconic West End store is merely the UK flagship.

Although much of the retail sector is struggling of late, the luxury end has so far not suffered from the downturn.

Finance director Stacey Cartwright said: 'Our luxury positioning gives us some insulation, but we are not saying we are completely immune.'

The problem for all luxury businesses is how to grow while retaining an exclusive feel. Until Ahrendts arrived, Burberry was opening five new stores a year at best. Now it is more like 15.

Angela Ahrendts, chief executive officer for Burberry Group Plc, sees opportunities for expansion

Although the statement warned about "an external environment that became increasingly challenging during the second half", Ahrendts sees no reason to slow down.

The debt on the balance sheet fell by £25million to £64million, although this figure is expected to rise next year.

Burberry tended in the past to be run as a series of fiefdoms, with businesses in different countries pursuing their own designs and developing their own supply chains.

Ahrendts has been working on turning Burberry into a single company with common advertising.

This is probably an attempt to take greater control of the brand and avoid past mistakes that for a while saw Burberry associated with Essex girls  -  a temporary boon to sales that was a potential long-term disaster.

The most recent marketing gambit has focused on the film of Sex and the City  -  Burberry is one of the brands favoured by the character played by Sarah Jessica Parker.

New product lines in the works include luggage, while shoes and childrenswear are just starting out.

The dividend is up 14 per cent to 12p. The shares have fallen sharply from a year high of 707p, but today put on 11/2p to 5081/2p. That values the company at about £2 billion.