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Next (NXT) – Finals PTP: £498.1m (£478.4m) Divi: 55p (49p)

The outlook for retailers worsened sharply last year yet Next grew profits modestly. EPS grew by 15.5% to 168.7p. The Directory saw some growth while like-for-like sales in the stores fell 3.2%.

Simon Wolfson, the CEO, is planning for a tough year. The customer base is dominated by ABC1 25-45 year olds, likely to be particularly affected by the squeeze on disposable incomes, so Next is budgeting for an H1 fall in underlying retail sales of 4% to 7%. There may be modest growth by Next Directory, where 60% of sales are now net-based. This caution should reduce the amount of stock to be discounted.

The group has outlined a number of initiatives which could be of medium-term benefit. However, in the short term the outlook is unexciting.

Shares says: On a PE under seven, the shares are a hold.

The writer holds shares in this company

by: John Marshall