LONDON (Reuters) - Cost cuts and demand for accessories helped Burberry (BRBY.L) to limit a fall in first-half profits and the luxury goods group said it expected an improvement in second-half profitability.

Burberry spring-summer 2009

The 153-year-old maker of raincoats and handbags said operating profit before one off items fell 19 percent at constant exchange rates to 86.3 million pounds, towards the better end of analysts' expectations.

The gross profit margin fell 30 basis points, much better than analysts' forecasts for a decline of at least 200 basis points and thanks largely to a cost-cutting programme which has seen the group shed over 1,000 jobs.

The group forecast an improvement in second-half margins, helped by lower stocks which would reduce the need to discount.

The interim dividend was up 4 percent to 3.5 pence a share.

(Reporting by Mark Potter, editing by James Davey)