Fashion group French Connection said it was confident of coping with a tough economic outlook and rising input prices as it beat forecasts with higher full-year profit, and hiked its dividend.

French Connection, which has sold off or closed a string of underperforming businesses, said it made a pretax profit of £7.3 million in the year to the end of January, up from £700,000 in 2009/10. It said last month profit would be at least £6.8 million, which is where analysts' average forecast had settled.

Growth in wholesale, licensing and e-commerce businesses helped offset a fall in sales at stores open at least a year, while the gross profit margin climbed 50 basis points.

French Connection, which has been fighting to reposition itself after the popularity of its FCUK brand waned even before the recession started, said it would triple its annual dividend to 1.5 pence.

"I am confident that we have the people, infrastructure, drive and brand strength to build further on the growth we have achieved," chairman and chief executive Stephen Marks said.

Reuters