Next Acquires Cath Kidston; Reports Profit Increase

Next plc has reported on its 2022/23 performance, advising of an increase in sales and profits and 

Headlines

• Full price sales (4) up +6.9% versus 2021/22 and +20.5% against 2019/20. Total Trading  Sales, including markdown, were up +8.4% versus 2021/22 and +20.6% against 2019/20. 
  
  
• Profit before tax of £870m, up +5.7% versus 2021/22 and +16.3% against 2019/20. This  is +£10m higher than our previous guidance of £860m. 
  
  
• Full price sales in January were flat and in line with our guidance. However, the participation of higher margin Retail sales was greater than expected, which added £5m to profit. 
  
  
• Clearance rates in our end-of-season Sale were ahead of our expectations and added a  further £5m to profit. 
  
  
• Basic Earnings Per Share (EPS) 573.4p, up +8.0% versus 2021/22 and +21.4% versus 2019/20. 

Outlook for the Year Ahead

• We are maintaining our current guidance for sales and profit
   
• We are budgeting for full price sales to be down -1.5% versus last year and NEXT profit before tax to be £795m. 
  
  
• Selling price inflation is forecast to be more benign than previously thought. Like-for-like price inflation in Spring/Summer is expected to be 7% and, in Autumn/Winter, +3%  (previously +8% and +6% respectively). 

Michael Roney, Chairman, said:  

"It has been a good year for NEXT. We have embraced the various challenges and seized the opportunities that have arisen. Looking back on the year, among the highlights are:

• The delivery of record Earnings Per Share (EPS).
  
  
• In the midst of a consumer squeeze, trading sales were up +8.4% on last year.  (Excluding the weeks that were flattered by lockdown in the previous year, trading sales were up +4.8%).

• Returning £461.4m to shareholders through dividends (£237.4m) and share buybacks (£224.0m).

• The partial opening of our new Elmsall 3 warehouse.

• The launch of Reiss, our largest client to date, on Total Platform.

• The additions of JoJo Maman Bébé, MADE.com and Joules to our Total Platform brands.

• An increase of our equity stake in Reiss. 

We will be welcoming Jeremy Stakol to the Board in April as Group Investments, Acquisitions and Third Party Brands Director. Jeremy has been the managing director at Lipsy since 2004 and in more recent years has successfully led many of the new investment transactions and related Total Platform opportunities. We have prepared (and budgeted) for a difficult year. We are very clear on our priories. If we continue to improve our product ranges, relentlessly manage our costs and upgrade our customer service, whilst also developing new business opportunities; we can lay the foundations for an exceptionally strong business and still deliver healthy profits, cash flow and dividends. Our performance, as ever, is a result of the hard work and dedication of the NEXT team. I would like to thank my colleagues across the Group for all of their effort, talent and dedication."

Cath Kidston

The Company announces that it has agreed to acquire the brand name, domain names and intellectual property of CK Acquisitions Ltd from the administrators for consideration of £8.5m.

The cathkidston.com domain will be licenced back to the administrators for a period of up to 12 weeks to effect stock clearance, prior to relaunch under the Company's ownership.

Source : Next plc

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