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Next Plc H1 Profit Declines; NEXT Brand Full Price Sales Down 1.2%

Next Plc (NXT.L) reported profit before tax of 309.4 million pounds for the half year ending July 2017 compared to 342.1 million pounds, previous year. Profit to equity holders decreased to 252.2 million pounds or 176.5 pence per share from 273.5 million pounds or 187.1 pence per share.

First-half revenue from continuing operations was 1.89 billion pounds compared to 1.94 billion pounds, prior year. Total NEXT Group sales, excluding VAT, were down 2.2% to 1.91 billion pounds. NEXT Brand full price sales in the first half were down 1.2% and total sales (including markdown) were down 2.3% on last year.

First-half total Retail sales reduced by 8.3% and full price sales were down 7.7%. Retail business has had a particularly difficult half with Retail operating profit down 33.1%. The Group expects Retail net margins for the full year to reduce to around 11.8% from 14.7%.

Next Plc noted that its first-half of the year has been difficult. However, the performance in the last three months has been encouraging on a number of fronts and whilst the retail environment remains tough, the Group's prospects going forward appear somewhat less challenging than they did six months ago. As a result, the Group modestly upgraded its sales and profit guidance for the full year.

Next Plc now expects full price sales for the second half to be in the range of down 2.8% to up 3.8% and consequently, marginally upgraded full year full price sales range to down 2.0% to up 1.5% (August guidance range was down 3.0% to up 0.5%). Full year Group profit before tax is now expected to be in the range of 687 million to 747 million pounds (prior guidance was 680 million to 740 million pounds). The combined effect is that the mid-point of profit guidance now moves up by 7 million pounds to 717 million pounds.

The Group declared an ordinary interim dividend of 53 pence per share, in line with last year, to be paid on 2 January 2018. Shares will trade ex-dividend from 7 December 2017 and the record date will be 8 December 2017.

by RTT Staff Writer

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