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Hennes profits pass 2 billion dollar mark

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10:37 CET+01:00
Swedish retail clothing giant H and M reported earnings for 2006 exceeding two billion dollars for the first time on Thursday on the back of rapid global expansion.

Pre-tax profit for the twelve months to November 30 was 15.808 billion kronor, up 17 percent from 13.553 billion for the same period last year, the company said in a statement.

Sales for the year were up 11.4 percent to 80.081 billion kronor.

The price of shares in H and M was jumped 6.53 percent at 367.00 kronor in late morning Stockholm trading.

"H and M's collections have been appreciated by customers during the year.

Comparable store sales have increased despite a non-optimal weather situation without price reductions and marketing costs exceeding normal levels," the group said.

The group also announced results for the fourth quarter.

Pre-tax profit for the three months to November 30, was 5.440 billion kronor from 4.297 billion a year earlier, an increase of 27 percent.

Fourth-quarter sales were up eight percent on the same period in 2005 to 19.707 billion from 18.009 billion.

The retailer said it had opened 168 stores during the year and closed 16 taking its number of stores to some 1,345 worldwide.

The group expected to continue its expansion throughout 2007 with the opening of a further 170 stores. The majority of the new outlets would be in Britain, Canada, Germany, Italy, Spain and the US.

"Work continues with this year's establishments in Hong Kong, Shanghgai, Greece, Slovakia. Preparations for the opening in Tokyo in 2008 have also begun," the company said.

The group repeated its intention to increase the number of stores by 10 to 15 percent annually.

H and M also announced the launch a home textiles line which would be available in catalogues and on-line from autumn 2007.

The retailer said it had 40,368 employees – of whom 3,872 were in Sweden – compared to 34,614 a year earlier.

The group proposed a dividend of 11.50 kronor per share, compared to 9.50 a year ago. The 21-percent-rise was above analysts' expectations of 11.12 per share.

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