Next profits set to pass £750m

Next says it is on course to make profits of three-quarters of a billion pounds this year as it benefits from a strengthening economy.

Speaking to the Leicester Mercury’s Business Editor Ian Griffiin, in an interview published on 21st March, the Enderby fashion giant gave its most upbeat forecast for at least five years.

The company said sales could rise by up to 8 per cent in the year to January 2015, with profits of up to £770 million.

The group revealed pre-tax profits rose by 11.8 per cent to £695 million in the 12 months to January – a fifth consecutive year of record profits.

Total sales were 5.4 per cent higher, at £3.7 billion.

Chief executive Lord Simon Wolfson said:

“It’s very, very difficult to forecast, but my feeling is things are getting better.

“If you look at the indicators in the economy, employment is getting stronger and credit is rising.”

Last year’s performance means 32-year-old Next looks set to make more annual profits than arch-rival Marks & Spencer for the first time.

The 130-year-old high street icon is forecast to post pre-tax profits of £626 million in the year to the end of March.

However, Lord Wolfson declined to be drawn on what many would see as a symbolic marker.

“We don’t comment on competition,” he said. “What we are really competing against is our own numbers from last year. That’s what the shareholders care about.”

The shareholders would also see that Next’s shares rose 2.28 per cent yesterday to £67.30 – a price more than 50 per cent higher than a year ago.

As ever, growth in Next’s online trading massively outstripped the sales rise at the group’s 541 stores.

Sales at the fast-growing Next Directory – where 90 per cent of sales are online – rose by 12.4 per cent to £1.19 billion, compared with a 1.7 per cent rise for its stores.

The ever-cautious Lord Wolfson said there was a good possibility the strength of the recovery would be sustained. He said:

“Conditions are likely to remain far from buoyant and there are real risks to the sustainability of the current recovery”.

Chairman John Barton said:

“The year to January 2014 was a great year for Next.”

Read original news item on Leicester Mercury website here 

Read more in Leicester Mercury Business Monthly:
So, what’s in store for Next’s chief executive Lord Simon…