LONDON (ShareCast) - Luxury fashion brand Mulberry revealed a decline in pre-tax annual profit after it was hit by extra costs from opening new stores and increased advertising spending.

The maker of luxury leather bags said pre-tax profit fell to £5.2m in the year ended 31 March from £6.2m the year before. Administrative expenses increased to £25.98m from £19.8m.

Sales rose 14% to £51.2m but it remains cautious about future trading and sees pressure on margins as more inflation costs creep in. Its final dividend has been increased 33% to 2p.

Mulberry said the new financial year has started strongly. In the first ten weeks of the New Year, total retail sales in the UK are 36% higher than the same time a year before. Like for like sales are up 17%.

Confirmed orders for sales to third parties for the Autumn/Winter 2008 season are over 30% more than last year, the group said.

• News Channel