Next pays off for shareholders with 15 percent growth

Thursday, 21 March 2013
Next has treated its shareholders with earnings per share (EPS) and dividend that have seen growth over 15 percent for the fourth year in a row. “The year to January 2013 was another good year for NEXT. Underlying earnings per share before exceptional gains grew by 16.6 percent to 297.7 pence and we propose to increase our full year dividend to 105 pence,” the chairman advanced.

This is the fourth consecutive year that our earnings per share and dividend have grown by over 15 percent, at a time when the UK economy has continued to struggle for growth, stressed Thursday John Barton, chairman of Next.

In fact, “Our share price again performed well during 2012, in both absolute and relative terms. Over the last two financial years the share price has risen by over 100 percent,” highlighted the company in a statement.

Fiscal year started “quiet”
The UK’s second-largest clothing retailer, said the start of the new fiscal year has been “quiet” after reporting annual profit rose 9 percent, just ahead of analysts’ estimates. Underlying pretax profit rose to 621.6 million pounds in the year ended in January, Next plc said Thursday in a statement. That compares to the average estimate of 620.3 million pounds from 20 analysts compiled by Bloomberg.

Next Directory, the company´s online and catalogue business, continued to grow, with sales up by 9.5 percent. “The growth differential between Next Directory and Next Retail, where sales were level, narrowed. The two businesses continue to work well together and support each other in many ways. For example, over 20 percent of Directory sales are delivered through our stores and over 60 percent of the returns come back that way,” the company explained. Both businesses increased their operating margins during the year.

Next Brand sales will rise between 1 percent and 4 percent this fiscal year, the retailer forecast, while profit before tax may gain as much as 7 percent. Sales in the first few weeks of the year have been in the “bottom of our target range,” the statement said.

Cash flow remained strong, helped by the timing of capital expenditure and stock intake at the year end. The company has continued with share buybacks, buying 7.5 million shares at an average price of 32.13 pounds. “During the year we returned 390 million pounds to shareholders through share buybacks and dividends.”

Chief Executive Officer Simon Wolfson advanced that “The year ahead looks no less challenging but the group is well-prepared and has further opportunities for growth.”

“We anticipate another challenging year ahead, with little if any growth in the UK retail economy. In these circumstances we again aim to achieve growth by investing in the Brand, improving our products, controlling costs and returning cash to our shareholders,” the chairman of the fashion retailer stressed though.

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