- Next reported a 3 per cent rise in third-quarter revenues in an October trading announcement
- On the same day as the trading update, executive director Richard Papp and his wife sold Next shares worth £782,000
Next (NXT) chief executive Simon Wolfson sold over £10m in the retailer’s shares earlier this month, less than a month after a trading update revealed a small uptick in sales over its third quarter. Online sales rose by nearly a quarter over the three months to 24 October, dragging Next’s online revenues for the year into growth of 1 per cent.
The retailer has experienced a steady share price recovery since their March collapse, with the shares having doubled since their spring nadir. E-commerce has proven a vital retail channel this year and Next generates the majority of its profits from its e-commerce offering. At its half-year results in July, online sales were down by 14 per cent compared with 2019, against a decline of nearly two-thirds in store revenues. Both channels recovered in Next’s third quarter, with store sales only down by 47 per cent compared with last year.
Lord Wolfson sold 150,000 shares on 12 November, leaving the chief executive with 1.25m shares, a stake in the company of just under 1 per cent. A spokesperson for the company said that the CEO sold around a tenth of his holding in order to diversify his investments into other sectors, beyond retail. Then on 17 November, executive director Jane Shields offloaded £2.4m in shares. The company said that this disposal was made for personal reasons, highlighting that Ms Shields has not sold any Next shares in more than two decades.
On the same day as Next’s latest trading update, on 28 October, executive director Richard Papp and his wife sold Next shares worth nearly £782,000, cutting his stake from 30,467 shares to 17,867 shares. Next said that this disposal was conducted for personal reasons.
These disposals won’t fill Next shareholders with confidence as the company heads into the critical winter retail season. But we remain bullish over the retailer’s near-term prospects, as it revolutionises its online offering using its stores to promote use of click and collect services, which may prove vital this Christmas. Buy at 6,806p.
Last IC view: Buy, 6,254p, 24 Sep 2020
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| Novacyt | Graham Mullins (ceo) | 11 Nov 20 | 817 | 497,349 |
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| Sells | ||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) |
| Next | Simon Wolfson (ceo) | 12 Nov 20 | 6,787 | 10,180,923 |
| Next | Jane Shields | 17 Nov 20 | 6.762 | 2,366,690 |
| The Gym Group | John Treharne | 17 Nov 20 | 204 | 1,020,000 |
| Kerry Group | Hugh Brady | 13 Nov 20 | 1,044 | 130,467 |
| Lloyds Banking Group | Antonio Lorenzo | 12 Nov 20 | 33 | 105,705 |
| OneSavings Bank | Richard Wilson | 12 Nov 20 | 389 | 40,133 |
