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Next Boosts Its Dividend by 13%

Stuart Watson
September 13, 2012

LONDON -- "Next has made a better than expected start to the year."

That's the first line of the clothing retailer's interim results statement, and it's hard to disagree. Sales were up 5% to 1,640 million pounds, with Next Directory again accounting for pretty much all the increase. In fact, Next Directory is now the most profitable part of the business, having overtaken the retail stores.

Next's (LSE: NXT.L  ) profits were 10.2% higher at 251 million pounds, while the company's continuing share buyback program (112 million pounds in the last six months) meant the increase in earnings per share was much higher -- 18.7%, in fact. The interim dividend is being raised by 13% to 31 pence.

These figures cover the period ending July 31, but the performance since then hasn't been as good. This seemed to be reflected in the share price, with the shares down 5.5% at 3,366 pence in early trading, giving back part of the gains made since the start of August. Next said:

We remain cautious about the economic outlook. Disappointing sales in an unusual August and early September reinforce the wisdom of this conservative approach ... If the economy had a weather forecast the outlook would be overcast -- patchy rain for the foreseeable future. In the run up to the credit crunch individuals, businesses and gov