Full year sales of 63 million pounds (105.4 million dollars) and operating profit of 5 million pounds (8.3 million dollars), before amortisation and profit share of 2 million pounds (3.3 million dollars), was the best performance of Next.
Net margins in the overseas business fell from 19 percent to 18 percent, reflecting keener prices and some marketing initiatives. Company expects net margins in the year ahead to remain at 18 percent. Going forward, Next expects growth rates to ease a little, as the price adjustments made in 2013 begin to annualise. It is currently forecasting the international online sales to grow by 50 percent.
Company’s franchise business, with partners operating 173 stores in 35 countries, continued to grow both sales and profits. The number of directly owned stores has been reduced to 16 and they broke even for the first time. Its 11 stores in Central Europe made a small profit, offset by a small loss in China.
Lipsy’s retail sales were 20 million pounds (33.4 million dollars), taken from 49 stores trading 57,000 square feet, and sales to wholesale customers were 22 million pounds (36.8 million dollars). Online sales, through Lipsy’s own site and the Next Directory were 21 million pounds (35.1 million dollars). Company expects further sales and profit growth from Lipsy in the years ahead.
“The year to January 2014 was a great year for Next. Underlying earnings per share grew by 23 percent to 366p and we propose to increase our full year ordinary dividends by 23 percent to 129p in total. This is the fifth consecutive year that our earnings per share and ordinary dividend have grown by over 15 percent. Sales for Next Directory, our online and catalogue business, grew by 12.4 percent narrowing the gap with Next Retail, which grew by 1.7 percent. The two businesses are complementary and support each other in an effective and efficient way,” said John Barton, Chairman of Next.
During the year, company made a number of changes to the Board. Andrew Varley, who had been a director for 23 years, retired from the Board in May 2013. Group Property Director, Christine Cross, who served as a Non-Executive Director for 9 years will step down from the board at the AGM in May. Jonathan Dawson, Senior Independent Director will continue to stay on the board for another year. Michael Law, Group Operations Director, and Jane Shields, Group Sales and Marketing Director joined the board last July.
Company is budgeting for total Next Brand sales growth of between 4 percent and 8 percent in the year ahead, this compares to the 1 percent to 4 percent estimate of last year. Next is a UK-based multi-channel retailer offering clothing, footwear, accessories and home products.