Shares of Next Plc. (NXT.L) were gaining around 2 percent in early trading in London after the British retailer announced Thursday higher profit for its first half with improved sales performance. The company also backed its forecast for growth in fiscal 2015 profit and sales.
For the first half, pre-tax profit increased 7.1 percent to 347.1 million pounds from last year’s 324.2 million pounds. Tge company’s net profit was 277.0 million pounds or 183.7 pence per share, compared to 257.7 million pounds or 168.8 pence per share last year.
Statutory revenue grew to 1.89 billion pounds from 1.85 billion pounds in the prior year. Total NEXT Group sales, including NEXT Franchise sales, were up 2.7 percent to 1.91 billion pounds.
Total NEXT Brand sales were up 3.3 percent, and full price NEXT Brand sales were up 3.5 percent, marginally ahead of its expectations.
NEXT Retail sales edged up 0.2 percent. Directory sales grew 8.2 percent with 13 percent increase in active customers to 4.5 million.
The company added that retail margins moved forward mainly as its buying teams over-achieved against their target margin, assisted by better currency rates.
Further, Next declared an interim dividend of 53 pence, an increase of 6 percent on last year, payable to shareholders on January 4, 2016. Based on current profit guidance, the company anticipates a total of 159 pence dividend this year.
Looking ahead for fiscal 2015, the company maintained its guidance, with group profit before tax expected to be in the range of 805 million pounds to 845 million pounds, a growth of 2.9 percent to 8.0 percent. The company still expects NEXT Brand full price sales to be up between 3.5 percent and 6.0 percent. This implies that sales in the second half will be up between 3.5 percent and 7.5 percent.
“At first sight guidance for the second half might appear optimistic, given that we only achieved full price sales growth of +3.5 percent in the first half. However last year was unusually strong in the first half and much weaker in the second half, with sales in September, October and early November adversely affected by unusually warm weather,” the company said in its statement.
Looking beyond the current year, Next estimates that it will add around 350,000 square feet of net trading space in both 2016 and 2017.
In London, Next shares were trading at 7,850.25 pence, up 2.28 percent.