Mulberry making bags of money

British luxury handbag maker Mulberry today issued its third profits upgrade in six months sending analysts rushing to change their numbers and pushing the shares up 140p to 1360p.

Home and overseas shoppers seem to be unable to get enough of the bags with the Tillie range, pictured, costing up to £1,277 leading the flight from the shelves.

Mulberry said "due to strong UK and export sales during January and February which have continued into March, sales and profit for the year ending March 31 are expected to exceed market expectations." FinnCap analyst David Stoddart lifted his pre-tax forecast from £17.5 million to £21.5 million and for next year from £25 million to £27.5 million.

Last year Mulberry made pre-tax profits of just £6.1 million but its shares were one of the best performers of 2010. In its unscheduled trading statement, it added: "Margins for the year to date have continued to be strong as increased sales have led to improved operational gearing. Order intake for the Autumn 2011 collection is encouraging."

Altium analyst Philip Dorgan said: "Mulberry's brand has become both relevant and desirable to the global consumer. But it barely has a toe in some of the world's largest luxury goods markets." He pushed his profit forecast up from £18.5 million to £21.5 million with a share price target of 2000p.

The Somerset-based group has also seen a surge in demand for its bags and accessories and clothes as it has re-established itself as a quintessentially British brand.