Retailer's share enjoyed 8% boost on news of special dividend & strong Next Directory sales
Companies: Next plc
Shares in Next jumped 8% on Thursday as investors welcomed a special dividend and strong Next Directory sales, despite the high street retailer reporting its first fall in annual profit in eight years and warning that the future of retail stores was at risk of online shopping.
Overall statutory revenue fell 0.3% to £4.13bn, with +4.2% growth in sales for Next Directory offsetting the 2.9% decline for Next Retail. As a result, pre-tax profit fell to £635m, lower than the £666m in 2016 and the first fall in 8 years.
The firm had already warned profits would fall and reiterated its extreme caution regarding trading. It said that business had suffered as shoppers were shifting their spending away from clothing, and spending more online.
Next said that the Brexit-induced price inflation that has recently started to kick in, might continue until the second half of 2018 and that online shopping's growth was bringing into question the "long-term viability of retail stores".
The firm announced that it has decided to pay out a special dividend of 45p to be paid on 2 May 2017 to those on the register on 6 April 2017, which looks to have led to the share price jump.
Chairman John Barton said trading in the year ahead would continue to be tough, but that he believed focusing on core strengths would help the business through the challenging times, whilst CEO Lord Wolfson assured investors that the company would continue to focus on improving its product, marketing, services, stores, and cost control.