17th Sep 2020 09:32
(Alliance News) - Next PLC on Thursday posted a swing to loss for the first half of financial 2020, predicting a drop in sales for the full year but raising its profit guidance as it reported better-than-anticipated sales since the re-opening of stores.
Shares in the clothing and homewares retailer were trading 2.0% higher at 6,292.00 pence each on Thursday morning in London, making them the second biggest gainer in the FTSE 100.
For the six months ended July 25, Next posted a pretax loss of GBP16.5 million, swinging from a profit of GBP327.4 million the year prior. This was as revenue dropped 26% to GBP1.29 billion from GBP2.01 billion.
Excluding the impact of IFRS 16, an accounting rule related to leases, Next posted a pretax profit of GBP9.0 million, dropping from GBP319.6 million a year prior.
Full price sales were down a third on last year, though Next highlighted that sales in the last seven weeks have been up 4% on a year ago. In the last thirteen weeks, since stores reopened, brand full price sales have "been much better" than anticipated, down 2% on last year.
"Unfortunately, we believe that recent sales are very unlikely to be indicative of our sales performance for the rest of the year," stated Next, noting a boost from fewer people taking overseas holidays and recent cool weather.
For the rest of the year, full price sales are expected to be down 12%. Pretax profit is guided for GBP300 million, up from GBP195 million given in July's trading statement.
No dividend was declared following the suspension of shareholder returns earlier in the year compared to the 57.5p payout the year prior. However, the company said it remains committed to paying dividends once the crisis passes.
Net debt at the end of the year is expected to reduce by GBP462 million to GBP650 million.
By Ife Taiwo; [email protected]
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