29th Mar 2023 09:26
(Alliance News) - Next PLC on Wednesday hailed a "good year" in 2022 despite various challenges, but expects a "difficult" year ahead as selling price inflation will be "more benign" than anticipated.
Shares were down 6.6% at 6,280.00 pence each on Wednesday morning in London.
In the financial year that ended in January, revenue rose 8.8% to GBP5.03 billion from GBP4.63 billion the year before, as total trading sales rose 8.4% to GBP5.15 billion. UBS had expected revenue of GBP4.97 billion.
Total pretax profit edged up 5.7% to GBP869.3 million from GBP823.1 million. This beat Next's guidance of GBP860 million. Next has a reputation for damping enthusiasm with a cautious outlook, before impressing the market with raised guidance.
The Leicester, England-based clothing and homeware retailer said full price sales in January were flat and in line with its guidance. However, it said the participation of higher margin Retail sales was greater than expected, which added GBP5 million to profit.
In Retail, total sales grew by 30% to GBP1.87 billion from GBP1.43 billion the year before. In Finance, sales were up 10% to GBP274.4 million from GBP249.4 million. In Online, however, sales were down slightly to GBP3.0 billion from GBP3.06 billion the year before.
Total group sales amounted to GBP5.41 billion, up 11% from GBP4.86 billion a year earlier.
Basic earnings per share climbed by 8.0% to 573.4 pence from 530.8p.
The board proposed a final dividend of 140 pence per share, taking the total payout for the year to 206p. For financial 2022, Next declared a dividend of 127 pence per share.
Next said it intends to maintain the 206p payout for the new financial year, based on achieving its pretax profit guidance of GBP795 million, which would be down 8.5% from the GBP869.3 million achieved in the past year.
Next expects total full price sales to decline by 1.5% in financial 2024 from financial 2023, with the first half performance to be weaker than the second half. "Selling price inflation is forecast to be more benign that previously thought," Next said.
"With profits set to decline, we question its prospects for longer-term growth," commented analysts Shore Capital following the results statement.
"Although the company is focusing on online growth, cost management, and investing in technology and infrastructure, we are not fully confident that these initiatives will deliver growth for shareholders."
By Xindi Wei, Alliance News reporter
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