Fashion chain Next Group today delivered an annual profits increase of 11.8%. The clothing chain, which operates 330 in Britain and Ireland, said current year sales had started well, in contrast to bigger rivals such as Marks and Spencer.
Profit before tax rose to £218 million, within expectations, and up from £195 million the year before. Turnover grew 11% to £1.59 billion and the dividend payout was raised 14%.
After completing a £192 million buyback of shares last year, Next said it will continue to use surplus cash to buy back more and enhance shareholder returns.
It also revealed stronger than expected current sales. For the first seven weeks of the current year retail sales in stores open more than a year were up 11% while mail order sales were up 17%, giving total growth for the brand of 18%.
This follows a trade update in January, when Next admitted a 6% rise in like-for-like sales up to the Christmas period had not met expectations and analysts had been worried about a longer term slowdown against tough comparisons.
The clothing market in Britain remains a tough place to be as excess capacity drives prices down. Spending on womenswear grew in the UK by 0.8% last year, the lowest for more than a decade, while prices dropped 3.2%, Verdict Research said.
Verdict reckons the chain expanded its share of the market to 5.4% from 3.7% between 1996 and 2000, while market leader M&S slumped from 16.6% to 12.9%.
The company is keen to expand into bigger stores and aims to add 250,000 square feet of selling space in the coming year.
