Next profit in line with expectations

High street fashion retailer Next has announced a 4% increase in annual profits which was in line with analysts expectations. Annual revenues at the group rose by 1.4% to £3.33 billion, from £3.28 billion.

The Leicester-based company said it represented a good result ‘in a period of economic slowdown‘. The group added it does not anticipate any recovery in UK consumer spending in the current year and expects trading conditions to remain ‘difficult’ as increased costs and rising taxes put pressure on its customers.

However, revenues at its Next Directory mail order and internet division rose by 3.3% to £799.8 million.

Chairman John Barton said we believe that our main strategy of investing in the Next brand whilst improving and extending our product ranges will offer us the best protection against any downturn in the UK economy.

Our Directory business, in particular, gives us a strong and flexible base from which to grow our product offering, added Mr Barton.

Nick Bubb, an analyst at Pali International, described Next’s sales and margin guidance for the 2008 year as ‘disappointing but not disastrous’.

Last year, Next opened a net 378,000 square feet of new trading space. This year it plans another 400,000 square feet.

Next also announced that it is to expand its overseas operations.