Next stocks up on profits news

<p>Profits rose 12 per cent at Next in 2013.</p>

The share price of Next is up this morning (March 20th) after the high street retailer confirmed a major increase in profits in its latest annual results.

It was revealed by the company that it recorded a 5.4 per cent growth in sales to £3.7 billion to the end of January, resulting in a 12 per cent rise in the firm's annual profits to £695 million.

Next also announced in a statement that Next Directory – which is the company's online and catalogue business – has been particularly successful in the last 12 months. Sales via Next Directory rose by 12 per cent, while sales at bricks-and-mortar shops were up by 1.7 per cent.

Next chief executive Lord Wolfson issued a warning regarding the UK's slow economic recovery, noting how it has been driven by credit. However, he stated he is positive about the year ahead.

He said: "If anything has been learnt from the last ten years, it is that credit cannot continue to grow faster than wages forever. Until we see significant increase in the supply side of the economy (profitable investment and improved productivity), we cannot bank on a return to sustained growth."

Forecasts up

Next is now forecasting sales growth of up to eight per cent this year, which is a significant rise on its previous prediction of just four per cent. Next also stated that profits in 2014 are likely to rise by up to £770 million.

Lord Wolfson added that the "modest improvement" in the consumer economy in the last two or three years looks set to continue through 2014. He stated that this is thanks in part to wages gradually closing the gap with inflation.

The share price of Next has risen this morning following the announcement of the increase in profits at the high street retailer. Stocks in the company were 1.6 per cent up for the day and still rising at 08:33 GMT on the London Stock Exchange.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.