Online helps Next first-half profit rise 8.2 percent

Reuters
Pedestrians walk past a Next shop in Oxford Street in London
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Pedestrians walk past a Next shop in Oxford Street in London March 26, 2009. REUTERS/Stephen Hird

LONDON (Reuters) - Britain's second biggest clothing retailer Next (LSE:NXT) posted a 8.2 percent rise in first-half profit, helped by a strong performance from its Directory internet and catalogue business as well as new store openings.

The group, which trades from over 500 stores in Britain and Ireland and about 200 more overseas, said on Thursday it made a pre-tax profit of 271.8 million pounds ($430 million) in the six months to July 27.

That compares to 251.3 million pounds in the same period last year and analysts' average forecast of 268 million pounds, according to a Reuters poll.

Revenue rose 2.2 percent to 1.68 billion pounds, with retail sales down 0.9 percent but Directory sales up 8.3 percent.

The company also said it would raise the interim dividend by 16.1 percent to 36 pence.

Recent official data and surveys have shown an improving outlook for UK consumer spending with cash-squeezed Britons feeling more confident about spending money. However, retailers including Next remain cautious on the market for the year ahead.

"Looking ahead the economy looks set to improve moderately, albeit at a slow pace and with the risk that credit easing may not translate into growth in real earnings," the company said in a statement.

The firm has generally been able to defy the economic downturn, helped by its strong online offer, new store openings and diversification into overseas markets.

The group raised its annual pre-tax profit expectations in July after good second-quarter sales growth, upping its guidance range to 635-675 million pounds from 615-665 million pounds.

Shares in the firm closed at 5,190 pence on Wednesday, valuing the business at 8.12 billion pounds.

(Reporting by Neil Maidment; editing by Paul Sandle)

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