Clothing retailer Next (NXT) reported another impressive full-year performance. Despite tough retail conditions, underlying pre-tax profit - after stripping-out exceptionals, mainly a £42.1m pension-related accounting gain - rose 9 per cent to £621.6m.
Underlying sales rose a more modest 3 per cent, but profits were helped significantly by cost savings. In fact, a £50m cost increase, largely reflecting wage inflation and costs for improving delivery services, was offset by £64m in savings. Sales as Next Retail were actually flat, yet profits there rose 2.3 per cent to £331m. Next Directory, meanwhile, saw sales rise 9.5 per cent to £1.2bn, and profits increased 15 per cent to £302m. The international online offering delivered a hefty 64 per cent sales hike to £54m. And while Next's international stores made a small loss, the online side's strength meant that international retail's operating profit rose 6.2 per cent to £8.4m. Overall, strong sales from new retail space and the online side delivered £67m of profit - more than offsetting the £29m cost of lost sales in the existing store base.
Broker Peel Hunt expects adjusted pre-tax profit of £663.1m for end-January 2014, giving adjusted EPS of 305.9p (297.7p in 2013).
| NEXT (NXT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4,184p | MARKET VALUE: | £6.75bn | |
| TOUCH: | 4,183-4,185p | 12-MONTH HIGH: | 4,265p | LOW: 2,859p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 177p* | NET DEBT: | 173% | |
| Year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 3.27 | 429 | 156 | 55.0 |
| 2010 | 3.41 | 505 | 189 | 66.0 |
| 2011 | 3.30 | 543 | 218 | 78.0 |
| 2012 | 3.44 | 580 | 258 | 90.0 |
| 2013 | 3.56 | 667 | 320 | 105 |
| % change | +3 | +15 | +24 | +17 |
Ex-div: 26 Jun Payment: 1 Aug *Includes intangible assets of £44.8m, or 28p a share | ||||
