Mulberry grows sales and looks to bag a bright future

Mulberry, the handbag house favoured by celebrities such as Kate Moss, reckons the luxury goods market is poised to come roaring back.

Unveiling its sixth successive year of sales growth, chairman and chief executive Godfrey Davis was optimistic that the future is bright. His leather goods, in particular the Mitzy range of handbags, have caught the eye of the famous helping it to bounce back from a profits warning last December.

Claudia Schiffer and Scarlett Johansson have also been seen sporting Mulberry goods.

"We have an authentic heritage. We are a British brand," said Davis. Sales in the year to the end of March were up by 14% to £58.6 million although profits slipped by £1 million to £4.2 million.

That's a little ahead of City expectations following the profit warning. A dividend of 2p will be paid.

Demand from tourists, especially in London, has been especially high of late.

"The fall in the pound has been helpful," added Davis.

Mulberry's balance sheet was hit hard by the recession. It still has no debt, but the cash on hand fell from more than £10 million a year ago to £3.7 million now.