I joined the Board of NEXT Plc (LON:NXT) just over a year ago and became Chairman in August 2017. I am enjoying working with the Board and have been impressed by the passion and commitment shown by the Executive Board and all the employees of NEXT.
As anticipated, the year to January 2018 was challenging for NEXT and, in line with our January 2018 guidance, Earnings Per Share declined by ‑5.6% to 416.7p. We are proposing a final ordinary dividend of 105p taking the total ordinary dividend to 158p, flat on last year.
NEXT Retail full price1 sales declined by -7.0% and Online2 full price sales increased by +11.2%. Total3 Group sales of £4.1bn were marginally down on last year by -0.5%.
Despite difficult trading conditions, cash flow remained strong and we returned £586m to shareholders through a combination of ordinary dividends (£224m), special dividends (£256m) and share buybacks (£106m). During the year we purchased 2.2m shares at an average price of £48.81 and reduced our shares in issue by 1.5%.
We have continued to invest in the business, spending £104m on new stores, warehousing and systems. Net debt increased to £1,002m from £861m driven mainly by the sales growth in nextpay, our online credit business. Net debt remains well within our bond and bank facilities of £1.4bn.
Michael Law, our Group Operations Director who has been with NEXT for 23 years, retires from the Board at the AGM in May. Michael has made a huge contribution to the Group, in particular leading the transformation of our Warehousing, Logistics and Systems operations. On behalf of the Board, I would like to thank Michael for his outstanding service. I am delighted to announce Richard Papp, our Group Merchandise Director with 25 years’ service at NEXT, will succeed Michael on the Board as Group Merchandise and Operations Director.
The continued strength of the Group is built on the hard work and dedication of all the people who work for NEXT. I would like to thank them all for their contribution, especially for the determination and commitment they have shown during this demanding year.
Even though the wider economy, clothing market and High Street look set to remain challenging, at our central guidance for the year ahead, Earnings Per Share will modestly move forward. The Board continues to be focused on building shareholder value through the delivery of long term sustainable growth in Earnings Per Share. Our core strategy remains unchanged, focused on our products, our profitability and returning surplus cash to our shareholders.
Michael Roney
Chairman
1 Full price sales are total sales, excluding items sold in our mid-season or end-of-season Sale events and our Clearance operations. They include interest income relating to those sales.
2 Formerly known as NEXT Directory.
3 Total sales are VAT exclusive sales including the full value of commission based sales and interest income (refer to Note 1 of the financial statements).
