NEXT Increases EPS and Dividend More Than 15% for Fourth Consecutive Year


LONDON -- NEXT's Directory service -- its online and catalog area, which is widely believed to have ensured that it "survived and thrived" where some high-street rivals died -- saw a 9.5% increase in sales to bring in 1.19 billion pounds for the year ending January 2013, helping the retailer to a positive set of results.

NEXT's retail sales remained consistent, raking in 2.19 billion pounds to match the previous year, though profit here improved 2.3% year on year to take home 331.1 million pounds. NEXT Directory saw profit up 15.1% at 302.1 million pounds, compared with 262.6 million pounds for the year ended January 2012.

Chairman John Barton commented:

The growth differential between NEXT Directory and NEXT Retail, where sales were level, narrowed. The two businesses continue to work well together and support each other in many ways. For example, over 20% of Directory sales are delivered through our stores and over 60% of the returns come back that way. Both businesses increased their operating margins during the year and the Group's underlying profit before tax rose by 9% to 622 million pounds.

Overall, underlying earnings per share rose 16.6% to 297.7 pence, while NEXT's full-year dividend grew 16.7% to 105 pence to yield around 2.5% at today's price. The shares put on 2.3% by midday on the news to reach 4,244 pence; their price has now almost quadrupled over the last five years since 2009's low of 1,088 pence, and it has risen more than 100% over the last two years.

Looking to the future, the retailer plans a fivefold strategy: to develop the NEXT brand; to "rigorously" control costs; to invest in profitable new space; to invest in online growth; and to generate cash and return it to shareholders. All of this adds up to one of the high-street's finest retailers. Whether you think the shares will rise further enough to warrant new investment, however, is up to you.

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