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Next pretax profits up to £836m ahead of ‘toughest year since 2008’

UK clothing retailer Next has posted a modest 5% increase in its pretax profits amidst warnings that the economy is facing its toughest year since the financial crisis.

In the company’s final results posted to the London Stock Ex change this morning, the retailer saw profits for the year up to January 2016 hit £836m, a solid increase on the £782m it brought in the previous year.

Next also enjoyed 3% increase in total sales across the Next Group, with particular growth in its Next Directory catalogue business which saw a 7.7% increase over the period.

However, underlining the challenges facing the British high-street and beyond, total sales in Next’s retail outlets saw only a paltry 1.1% rise, despite being one of the UK’s biggest clothing retailers.

The numbers mark what is a gloomy statement from the organisation, with pretax profit coming in lower than what the retailer forecast last year and foreboding statements about the current economic landscape.

Tapping in to the overall gloomy outlook, John Barton, Next’s Chairman, said: “2016 will be a challenging year with much uncertainty in the global economy.

“For Next it makes it particularly important that we remain focussed on our core strategy of delivering long term sustainable growth in earnings per share (EPS), investing in the business, improving the design and quality of our products and returning surplus cash to shareholders.”

Adding to the sombre tone, Chief Executive Simon Wolfson, said: “The year ahead may well be the toughest we have faced since 2008.

“We are very clear on our priorities going forward and whatever challenges we may face, it is important that we remain focused on ensuring that the Company’s product, marketing, services and cost controls all improve in the year ahead.”