Interim Results

Mulberry Group PLC
08 December 2005


8 December 2005


MULBERRY GROUP PLC ('Mulberry' or the 'Group')


Interim Results


MULBERRY GROUP PLC POSTS RECORD INTERIM RESULTS

Mulberry Group Plc, delivered on its strategy of concentrating on its core
products of handbags and leather accessories with an operating profit for the
first half of £2.3 million (2004: £133,000) with a 59% increase in sales over
the same period in 2004.


HIGHLIGHTS

  • Sales for the six months to 30 September 2005 increased by 59% to
    £19.1 million (2004: £12.1 million). Sales growth in the previous six 
    months to 31 March 2005 was 36%.
  • Gross profit margin increased to 54% (six months to 30 September 2004:
    52.6%)
  • The Group has generated over £6.2 million of cash, before financing, in
    the last twelve months and, at 30 September 2005, had cash at bank of £3.8
    million (30 September 2004: net bank borrowings of £2.3 million).
  • The accessories third party order book for the Autumn/Winter 2005 season
    finished approximately 80% ahead of the prior year comparative order book.
  • Orders from the new markets of the USA, Asia and Japan increased
    significantly and accounted for over 20% of the order book compared to 5% in
    Autumn/Winter 2004.
  • UK full price like for like retail sales were 35% higher for the six
    months to 30 September 2005.


GODFREY DAVIS, CHAIRMAN AND CHIEF EXECUTIVE COMMENTED: 'We have delivered strong
sales and profit growth by focusing on handbags and leather accessories. Demand
continues to grow in the UK and Europe. The expansion of our business in the
USA, Asia and Japan is proving successful.'


Enquiries

WMC Communications Ltd                                    Tel: [phone]
David Wynne-Morgan or
Charlie Geller




INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2005


CHAIRMAN'S STATEMENT

The Group has continued to make excellent progress and made an operating profit
for the first half of £2.3 million (2004: £133,000).

The Group's strategy of concentrating on its core products of handbags and
leather accessories has produced strong sales growth in both new and existing
markets. Sales for the six months to 30 September 2005 increased by 59% to £19.1
million (2004: £12.1 million). Sales growth in the previous six months to 31
March 2005 was 36%.

Gross profit margin increased to 54% (six months to 30 September 2004: 52.6%) as
a result of the increased volume despite the lower margins on sales to our
distribution partners in the USA, Asia and Japan.

Operating expenses increased by £1.8 million, reflecting the costs associated
with increased sales volume, the running costs of four new shops and concessions
that have opened in the last year and modest investment in the infrastructure
and people to sustain the continued growth of our business.

The Group has generated over £6.2 million of cash, before financing, in the last
twelve months from profit and working capital reduction and, at 30 September
2005, had cash at bank of £3.8 million (30 September 2004: net bank borrowings
£2.3 million). The Group has unutilised term loan and overdraft facilities of
£7.5 million.

The interim accounts reflect the adoption of a new reporting standard, FRS 25,
which requires that a substantial part of the preference shares be reclassified
from equity and reserves to long term debt and the related dividends be
reclassified as an interest cost. This is explained in note 1 to the accounts.


BUSINESS REVIEW

Accessories, which account for over 90% of Group sales, have seen substantial
growth in the period. The accessories third party order book for the Autumn/
Winter 2005 season finished approximately 80% ahead of the prior year
comparative order book. Orders from the new markets of the USA, Asia and Japan
increased significantly and accounted for over 20% of the order book compared to
5% in Autumn/Winter 2004.

UK full price like for like retail sales were 35% higher for the six months to
30 September 2005. In May 2005, a new shop was opened at Heathrow in Terminal 1.
This has been an immediate success. A new shop will open in Edinburgh in early
February 2006, allowing us to consolidate two department store concessions into
a stand alone Mulberry store.

Our marketing has continued to expand to include the USA, Asia and Japan. The
advertising and PR campaigns have succeeded in their objective of bringing the
brand to the attention of a wide spectrum of fashion conscious customers
worldwide. The new campaign for Spring 2006 will be seen in many more leading
publications throughout the world. This will result in increased expenditure in
the second half.


MARKETS

Following the USA launch in Autumn 2004, our distribution has developed well
through our 50% owned distributor Mulberry USA LLC. Our customers include
Bergdorf Goodman, Barneys, Neiman Marcus, Saks and Nordstrom with whom we have
successfully targeted the premier store in each city. In Autumn 2005, Mulberry
handbags were available in sixty three US stores, and this is expected to
increase to eighty nine in Spring 2006.

Club 21, our distributor in Asia apart from Japan, opened Mulberry shops in Hong
Kong, Bangkok and Kuala Lumpur between October 2004 and June 2005. They plan to
open a second shop in Bangkok and a first shop in Taiwan in Spring 2006.
Further shops throughout the region are planned over the next two years subject
to securing appropriate sites.

In Japan, distributors Mitsui and Sanki Shoji continue to develop sales with
department stores.

In Europe, our franchise partners in Scandinavia and Northern Europe are
achieving strong sales growth while Italy and Spain, which have not been
developed historically, are showing potential.


CURRENT TRADING AND OUTLOOK

Demand in the UK and Europe continues to grow strongly, although at a slower
rate, following a period of rapid development. The development of our business
in the USA, Asia and Japan is progressing well with consumer demand driving
sales.

The accessories third party order book for the Spring 2006 season is
approximately 85% ahead of the order book at the same point in the prior year.
It is estimated that more than 80% of the orders for the Spring 2006 season have
been taken at this date. Third party wholesale sales account for approximately
half of the Group's turnover.

Mulberry's own stores in the UK continue to trade strongly.  The rate of growth
will decline in the second half because the figures will be compared to the
period last year when substantial sales growth was achieved.  UK full price like
for like retail sales for the nine weeks to 3 December 2005 were 11% higher than
the prior year comparative period.


DIVIDENDS

The Board is not recommending the payment of a dividend on the ordinary shares
at this point but will review the resumption of paying dividends when the
distributable reserves have reached a level that will support the Board's
business plan. The Group has generated sufficient distributable reserves to pay
the dividend on the preference shares. This is a contractual commitment and the
total of £736,000, which comprises £638,000 of arrears from prior periods and
£98,000 in respect of the six month period to 30 September 2005, will be paid in
December.


STAFF

The continued success of the brand is the direct result of the talent, hard work
and enthusiasm of our people. I would like to take this opportunity to thank
them all.


Godfrey Davis
Chairman and Chief Executive
8 December 2005



Contacts:


WMC Communications
David Wynne-Morgan or Charlie Geller            020 7930 9030


Teather & Greenwood Limited
Mark Dickenson                                  020 7426 9000




CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                                                           Unaudited   Unaudited         Audited        
                                                                         6 months to 6 months to    12 months to
                                                                            30.09.05    30.09.04        31.03.05
                                                                                        Restated        Restated
                                                                   Note        £'000       £'000           £'000

TURNOVER                                                                      19,141      12,073          30,064

Cost of sales                                                                (8,811)     (5,716)        (13,926)        
                  

GROSS PROFIT                                                                  10,330       6,357          16,138        
                   

Other operating expenses (net)                                               (8,053)     (6,224)        (14,001)        
                                                     

OPERATING PROFIT                                                               2,277         133           2,137        
       
                                                                                          

Group share of loss of associated undertakings                                  (18)           -            (17)        
                     
                                                                              
Interest receivable and similar income                                            49           -              27
Interest on preference shares                                       1           (98)        (98)           (196)
Finance costs on preference shares                                              (27)        (26)            (53)
Interest payable and similar charges                                            (17)       (116)           (193)

PROFIT / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION                         2,166       (107)           1,705

Tax on profit/(loss) on ordinary activities                         2          (573)           -              33        
                          
                                                                          
RETAINED PROFIT / (LOSS) FOR THE PERIOD                                        1,593       (107)           1,738
                                                                              

Earnings per share for the period - basic                                      3.26p     (0.22p)           3.56p

Earnings per share for the period - diluted                                    3.00p     (0.22p)           3.49p        
          
                                                                                        
Dividend per ordinary share                                                Nil pence   Nil pence       Nil pence




CONSOLIDATED BALANCE SHEET
                                                                           Unaudited   Unaudited         Audited
                                                                            30.09.05    30.09.04        31.03.05
                                                                                        Restated        Restated
                                                                   Note        £'000       £'000           £'000

FIXED ASSETS AND INVESTMENTS                                                   5,086       5,350           4,964

CURRENT ASSETS
Stocks                                                                         5,576       7,146           5,379
Debtors                                                                        5,780       3,753           3,522
Cash at bank and in hand                                                       3,774         694           2,183
                                                                              15,130      11,593          11,084

CREDITORS: Amounts falling due within one year                      1        (7,554)     (4,234)         (4,383)

NET CURRENT ASSETS                                                             7,576       7,359           6,701

TOTAL ASSETS LESS CURRENT LIABILITIES                                         12,662      12,709          11,665

CREDITORS: Amounts falling due after more than one year                      (2,529)     (5,512)         (2,517)

NET ASSETS                                                                    10,133       7,197           9,148

CAPITAL AND RESERVES

Called up share capital                                             1          2,463       2,459           2,460

Reserves                                                            1          7,670       4,738           6,688

SHAREHOLDERS' FUNDS                                                           10,133       7,197           9,148





CONSOLIDATED CASH FLOW STATEMENT
                                                                          Unaudited   Unaudited         Audited
                                                                        6 months to 6 months to    12 months to
                                                                           30.09.05    30.09.04        31.03.05
                                                                   Note       £'000       £'000           £'000

Operating profit                                                              2,277         133           2,137
Depreciation and impairment charge                                              473         398             939
(Increase) / decrease in stocks                                               (197)       (581)           1,186
Increase in debtors                                                         (2,258)       (312)            (37)
Increase in creditors                                                         1,842         261             582

NET CASH INFLOW / (OUTFLOW) FROM OPERATIONS                                   2,137       (101)           4,807

Returns on investments and servicing of finance                                  32       (116)           (162)
Taxation                                                                          -           -            (11)
Capital expenditure                                                           (505)       (206)           (460)

NET CASH INFLOW / (OUTFLOW) BEFORE FINANCING                                  1,664       (423)           4,174

Financing                                                                      (99)       (153)         (3,286)

INCREASE / (DECREASE) IN CASH IN THE PERIOD                                   1,565       (576)             888

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS / DEBT

Increase / (Decrease) in cash in the period                                   1,565       (576)             888

Cash outflow  from decrease in debt and lease finance                           110         153           3,297

                                                                              1,675       (423)           4,185
Inception of finance leases                                                    (39)           -               -

Movement in net debt                                                          1,636       (423)           4,185

NET FUNDS / (DEBT) AT BEGINNING OF PERIOD AS
PREVIOUSLY REPORTED                                                           2,004     (2,231)         (2,231)
Effect of adoption of FRS 25                                        1       (2,464)     (2,414)         (2,414)
NET DEBT AT BEGINNING OF PERIOD (RESTATED)                                    (460)     (4,645)         (4,645)

NET FUNDS / (DEBT) AT END OF PERIOD                                           1,176     (5,068)           (460)





CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                                                                          Unaudited   Unaudited         Audited
                                                                        6 months to 6 months to    12 months to
                                                                           30.09.05    30.09.04        31.03.05
                                                                                       Restated        Restated
                                                                              £'000       £'000           £'000

Profit/(loss) for the period                                                  1,593       (107)           1,738

Currency translation differences on foreign currency net                         16           -             (5)
investments

TOTAL RECOGNISED GAINS AND (LOSSES) IN THE PERIOD                             1,609       (107)           1,733





RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
                                                                          Unaudited   Unaudited         Audited
                                                                        6 months to 6 months to    12 months to
                                                                           30.09.05    30.09.04        31.03.05
                                                                                       Restated        Restated
                                                                              £'000       £'000           £'000

Profit / (loss) for the period                                                1,593       (107)           1,738
Issue of new shares net of costs                                                 12           -              11
Finance costs on preference shares                                                2           1               3
Currency translation differences on foreign currency net                         16           -             (5)
investments
Reclassification of preference dividend reserve as a liability                (638)           -               -
Transfers to preference dividend reserve                                          -          98             196

Net increase/(decrease) to shareholders' funds                                  985         (8)           1,943
Opening shareholders' funds - restated                                        9,148       7,205           7,205

CLOSING SHAREHOLDERS' FUNDS                                                  10,133       7,197           9,148





NOTES


1.    ACCOUNTING POLICIES

The interim results contained in this report have been prepared using accounting
policies consistent with those used in the preparation of the annual report and
accounts for the year ended 31 March 2005 with the exception of the adoption of
FRS 25 'Financial Instruments: disclosure and presentation' this year.

The effect of the adoption of FRS 25 is that the 'B' Preference Shares are
defined as compound financial instruments and are disclosed partly as equity and
partly as financial liability.  As a result of this change the net assets of the
Group as at 30 September 2005 have been reduced by £2,489,000.  In addition, the
dividends payable on the preference shares have been reclassified in the profit
and loss account from dividends to interest.   The effect of this on the figures
to 30 September 2005 is the reclassification of £98,000.  Both sets of prior
year comparatives have been restated to reflect the new treatment.  The effect
of the restatement is as follows:


  Balance Sheet                                                                      6 months     12 months
                                                                                  to 30.09.04   to 31.03.05

  Financial liabilities                                                           +£2,439,000   +£2,464,000
  Equity and reserves                                                             -£2,439,000   -£2,464,000

  Profit and Loss Account

  Preference dividends                                                               -£98,000     -£196,000
  Interest payable on preference shares                                              +£98,000     +£196,000



On the basis of the Group having sufficient distributable reserves at the end of
the period the arrears of preference dividends from prior periods of £638,000
becomes payable and has been moved from reserves to short term creditors pending
payment.


2.    TAXATION

The corporation tax charge for the period is based on the effective rate which
it is estimated will apply for the full year.


3.    COMPARATIVE FIGURES

The comparative figures for the year ended 31 March 2005, which do not
constitute statutory accounts, are abridged from the company's statutory
accounts which have been filed with the Registrar of Companies. The report of
the auditors, Deloitte & Touche LLP, on these accounts was unqualified and did
not contain a statement under section 237(2) or (3) of the Companies Act 1985.


4.    APPROVAL AND DISTRIBUTION

This report was approved by the Board of Directors on 7 December 2005 and is
being sent to all shareholders. Additional copies are available from the Company
Secretary at the Registered Office Kilver Court, Shepton Mallet, Bath, BA4 5NF.


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