Next PLC Trading Statement (5839N)
10 May 2018 - 4:00PM
UK Regulatory
TIDMNXT
RNS Number : 5839N
Next PLC
10 May 2018
Date: Embargoed until 07.00hrs, Thursday 10 May 2018
Contacts: Amanda James, Group Finance Director (analyst calls)
NEXT PLC Tel: 0333 777 8888
Alistair Mackinnon-Musson Email: next@rowbellpr.com
Rowbell PR Tel: 020 7717 5239
Photographs: http://www.nextplc.co.uk/media/image-gallery/campaign-images
Next plc
Trading Statement
FIRST QUARTER SALES PERFORMANCE TO 7 MAY 2018
Full price sales for the fourteen weeks to Monday 7 May were up
+6.0% on last year. The table below sets out the full price sales
performance in Retail stores and Online. Sales in our Online
business were particularly strong and up +18.1%, driven by the
growth of NEXT branded stock and third party brands on our UK
platform along with continued growth from our overseas
business.
Fourteen weeks
Full Price Sales (VAT exclusive) to 7 May
==================================== ===============
Retail - 4.8%
Online +18.1%
===============
Brand Total +6.0%
Of which sales from new space 0.4%
The graph below sets out the full price sales variance to last
year by week.
Click or paste the following link into your web browser to view
the graph entitled "2018 Full Price Sales Variance by Week vs
2017". Refer to page 1 for this graph.
http://www.rns-pdf.londonstockexchange.com/rns/5839N_-2018-5-9.pdf
SALES IN THE FIRST QUARTER
Sales in the first quarter were better than we expected and
around GBP40m(1) ahead of our internal forecast, boosted in recent
weeks by unusually warm weather. This sales over-performance adds
around GBP12m to our full year profit and we are therefore
increasing our central guidance for Group profit accordingly.
(1) Sales include VAT and interest income.
SALES GUIDANCE FOR THE REST OF THE YEAR
At our results presentation in March we set out our guidance for
the full year. At that time, we anticipated that the sales
performance in the first quarter would be flattered by the
under-performance of our ranges in the same period last year, so we
did not expect sales for the rest of the year to be as strong as
the first quarter. We still believe this will be the case.
The table below sets out our full price sales growth for the
first quarter (+6%), along with our estimate for the rest of the
year (+1.0%) and the full year (+2.2%).
At first sight, the estimate for the rest of the year looks
overly conservative. However, when compared to two years ago, our
forecast looks more realistic. To clarify this point, the table
below gives the actual and anticipated performance against two
years ago in the right hand column.
Vs 1 Year Vs 2 Years
================================= ========== ===========
Quarter 1 +6.0% +2.1%
Rest of year to 26 January 2019 +1.0% +3.3%
========== ===========
Full year to 26 January 2019 +2.2% +3.0%
PROFIT GUIDANCE FOR THE FULL YEAR
The table below sets out our revised central guidance for full
price sales and Group profit for the year to January 2019. Our
previous central guidance is shown in the right hand column of the
table.
Full Year Estimate New Central Previous Central
Year to January 2019 Guidance Guidance
================================== ============ =================
Total full price sales versus
2017/18 +2.2% +1.0%
Group profit before tax GBP717m GBP705m
Group profit before tax versus
2017/18 - 1.3% - 2.9%
============ =================
Earnings Per Share growth versus
2017/18 +3.7% +1.4%
CASH FLOW, SHARE BUYBACKS AND EPS
Our cash flow remains strong and we still expect to generate
around GBP300m of surplus cash after deducting interest, tax,
capital expenditure and ordinary dividends but before financing any
increase in Online debtors. We intend to fund any increase in our
debtor book through long-term bonds and bank facilities.
As outlined in our January 2018 trading statement, we intend to
return this GBP300m surplus cash to shareholders by way of share
buybacks. Of this GBP300m, we have already returned GBP195m (which
includes GBP26m of shares bought back at the end of the last
financial year). We intend to return the balancing GBP105m of
surplus cash to shareholders through share buybacks over the course
of the year, subject to market conditions.
We anticipate that our Earnings Per Share (EPS) will be enhanced
by +4.7% as a result of share buybacks. This combined with a
slightly lower tax rate means that we expect EPS to move forward
faster than profits. At our central guidance we expect EPS to
increase by +3.7%.
NEXT TRADING STATEMENT
Our next sales update will cover the first 26 weeks of the year,
to 28 July 2018, and is scheduled for Wednesday 1 August 2018.
Forward Looking Statements
Certain statements in this Trading Update are forward looking
statements. These statements may contain the words "anticipate",
"believe", "intend", "aim", "expects", "will", or words of similar
meaning. By their nature, forward looking statements involve risks,
uncertainties or assumptions that could cause actual results or
events to differ materially from those expressed or implied by
those statements. As such, undue reliance should not be placed on
forward looking statements. Except as required by applicable law or
regulation, NEXT plc disclaims any obligation or undertaking to
update these statements to reflect events occurring after the date
these statements were published.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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