Next announce profit increase of 13.8%

PUBLISHED: 12 Sep 2013 @ 22:30 | Comments (0) |

High-street retailer Next (LSE:NXT) have announced a 2.2% increase in sales as part of their 2-13 half year results.

In a statement the company said that they had “made good progress” and that operating profits, up 7.2%, “were at the top end of our expectations”. Next’s share price rose by 15p, 0.3%, during afternoon trading on the London market.

Next’s profits after tax was up 13.8% to £217m, with a net cash inflow of £129m before £170m of share buybacks. Earnings per share were 142p, up 19.9%, and investors saw a 16.1% increase in dividend to 36p, which will be paid on 2 January 2014.

Commenting on the results the company said that the increase in sales was a down to a “combination of additional NEXT Retail selling space and increased online sales through the NEXT Directory”, aided by a 1.% increase in selling space.

Capital expenditure was confirmed as £53m with plans to increase this to £120m by the end of the year as a result of new large store openings. Directory customer account balances rose £35m compared to last year, up 6% to £588m.

Net debt after buybacks increased by £41m in the period to £533m and the company forecast that it will peak around £700m in the second half, with the company saying their “central forecast for net debt at January 2014 is £563m”.

Detailing share buybacks the company said that they had “we purchased 3.7 million shares at a cost of £170m, representing 2.3% of shares in issue at the start of the year”, with a further 0.2 million shares purchased in August at a cost of £8m.

Looking ahead the company believe the UK’s slowing recovering economy has seen progress in the consumer environment but warn that real earnings “continue to decline and this will rule out a strong recovery in the consumer economy”.

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