Next sales and profits down in difficult H1

Next's first half sales and profits were in line with its cautious expectations after a difficult six months.

Pre-tax profits fell by 9.5% to £309.4m and total sales were 2.2% down at £1,914.0m.

The group has declared an interim dividend of 53p per share, which is in line with last year.

NEXT Brand full price sales1in the first half were down -1.2% and total sales (including markdown) were down -2.3% on last year.

Chief executive Lord Wolfson of Aspley Guise said: "The wider economic environment, clothing market and High Street look as challenging as ever, and we do not underestimate the task of managing our stores through a period of prolonged negative like-for-like sales.

"Nonetheless, we believe our stores will remain cash generative for many years to come and represent an important asset for the Group.

"While the external environment looks set to remain difficult, from where we stand today our prospects going forward appear somewhat less challenging than they did six months ago.

"We have seen the benefits of product improvements begin to work their way through into our Autumn ranges and the medium-term outlook for pricing looks more benign, with price inflation set to moderate to just +2% in the first half of next year and to 0% in the second half.

"The programmes of improvement we have made to our Directory business are beginning to bear fruit and our two new and developing businesses, LABEL and Directory overseas, continue to deliver healthy levels of growth.

"We look set to generate around £53m of surplus cash over and above the £257m that we intend to distribute by way of special dividends.

"We now anticipate that this additional cash is likely to be returned to shareholders through share buybacks at some point during the second half, subject to the prevailing share price and market conditions."