Next shares hit record high

NEXT Highcross LeicesterShares in Enderby based retail giant Next hit an all-time high yesterday after the company posted better than expected trading figures

The Leicester Mercury reports that sales were up 3.3 per cent between August and October.

The report continues saying:

  • Strong online growth compensated for a slight decline in shop sales, which exclude new stores.
  • During trading yesterday, the share price topped £27 for the first time.
  • There were fears the trade figures would be poor because of the sluggish economy and warm weather hitting autumn/winter clothes sales.
  • Revenues from Next’s 520 stores actually fell by 3.3 per cent in the three months to October 29, compared with a 1.8 per cent fall in the previous six months.
  • But performance was lifted by its catalogue and online business Next Directory, which saw sales growth of 16.9 per cent in the quarter, from 15.1 per cent in the first half of the year.

An interim management statement from the company told the paper:

“The overall growth pattern for the Next brand is unchanged, with further improvements in Next Directory (our online business) and the addition of profitable new space more than compensating for slightly weaker underlying retail sales.”

The group, which said earlier in the year it had been hit by rising commodity prices and higher VAT, was confident of stable prices over the coming months.

Profits for the year are forecast to be between £550 million and £585 million, compared with £551 million last year.

The Mercury report states that Chief executive Lord Wolfson said the mood of consumers remained subdued, especially on big-ticket items such as electrical items, sofas and furniture. The clothing side had been less affected, he said. The online business was boosted by strong growth overseas, he said.

Shares jumped by 6 per cent immediately after the update.

The Mercury quotes Phil Garton, a lecturer in retailing at De Montfort University, as saying Next’s sales were better than recent overall UK store figures – going on to say:

“The next real challenge will be going into a period where public sector redundancies start to bite into people’s spending.”

Also quoted is Grant Oliver, managing director of stockbroker Thomas Grant and Co, in Leicester, who told the paper the success of Next had been remarkable, but feared the global economic turmoil if Greece defaults on its debts could cause havoc in the markets.

The Leicester Mercury (This is Leicestershire)

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