Profits at Next rise 7% to €208m but retailer says full year results will be flat

BRITISH fashion retailer Next has posted a 7% year-on-year increase in first half profits to £185.5 million (€208.3m), but has warned that financial performance for its full year will be largely flat.

As well as the pre-tax profit figure — which was at the high end of market expectations — the half year figures showed a 0.7% rise in revenue to £1.51 billion and a similar increase in operating profit to £199.5m.

After-tax profit was up by 6.9% at £131.7m and basic earnings per share rose by 7.6% to 68.2p.

There was also a 5.6% year-on-year increase in the interim dividend to 19p per share.

In a statement yesterday, the retailer — which has a significant presence in Ireland with 25 shops nationwide — said that the first half figures were “better than expected”, boosted by a slight improvement in the consumer environment and good weather conditions, which gave a 2%-3% boost to retail sales.

It added that the business “has proved itself resilient in the face of a weak consumer environment”.

However, the retailer is not expecting the same weather boost in the second half of the year and anticipates unchanged consumer appetites.

“We are not expecting profits in the second half to grow as they did in the first. Our outlook for the second half remains cautious.

“We expect continued negative retail like-for-like sales in the autumn/winter season,” said the company’s chief executive, Simon Wolfson.

Profit and sales at its high street retail outlets were up by 4.4% and 0.8% year-on-year, for the first half while sales through its directory avenue were ahead of the same period last year by 1.7%.

The company’s international business had sales of £30m and profits of £3.1m during the six months, broadly in line with the same period last year.

Next currently has operations in 32 countries outside of Britain

Anticipated “difficult trading conditions” for this element of the business, in the remainder of the year, has led to a full-year profit guidance of £7m for the international division.

On an overall group basis, full-year profits of around £429m — last year’s total — are expected again.