Next sees 16% profit increase

Fashion chain Next saw group profit after tax increase by 16% to £245.2m (€364.57m) to January 2004.

An increased interest charge restricted this figure while group turnover was 14% ahead at £2,516m (€3,744m) during the same period in 2003.

Sales in NEXT Retail were up 14% to £1,809.3m (€2,692m) and in NEXT Directory were up 13% to £533.7m (€794.25m).

Full price sales - which the company said were the real driver of profit - were up 16.8% whereas markdown sales were level with last year.

Tight control of costs also contributed to further growth in operating profit, the retail group claimed today.

A share buyback of 21.7m shares for cancellation at an average price of 961p,(€14.30) for a cash cost of £209m (€311m).

This had two significant effects, namely an increased interest charge, which restricted the increase in profit after tax and reduced the number of shares in issue, which accelerated the growth in earnings per share to 34%.

The company now has 70 franchise stores compared with 59 the previous year. The Middle East continues to be its largest region with 30 stores. Japan now has 18 stores.

Any further international expansion will be extremely cautious and the main opportunities for growth will remain in our core markets of the UK and Ireland, the company said today.

On prospects for 2004, Chairman Simon Wolfson said today: "In the first seven weeks since the start of the new financial year NEXT Retail sales are 17% ahead of the previous year.

"Like-for-like sales in the 306 stores which have been trading for at least one year are 3% ahead," he added.

The firm's next trading statement will be made on May 13 which is the date of its Annual General Meeting.