NEXT (NXT) investor relations material

Executive summary

• Group sales rose 9% year-over-year to £3,540m, with full price sales up 7.7% and profit before tax up 10.5% to £569m, exceeding expectations in both the UK and international markets.

• EPS increased by 12.2% to 370.4p, aided by early share buybacks; interim dividend up 12.6% to 98p.

• International sales growth outpaced the UK, with notable strength in Europe and a strong rebound in the Middle East after Q1 disruption.

• Profit guidance for the full year was raised by £12m to £1,255m, reflecting higher sales expectations and cost savings, especially in warehousing.

• UK retail stores saw a slight decline, while online and international segments drove growth.

Financial highlights

• Statutory revenue reached £3,447m (+9.6% YoY), and statutory profit before tax was £566m (+11.2%).

• Operating profit margin improved by 0.3% to 16.1%; profit after tax stable due to unchanged tax rate.

• Cash flow from operations and profit reached £54m; CapEx increased by £44m, mainly for warehousing.

• Share buybacks totaled £355m in H1, leading to a net cash outflow of £177m; year-end net debt expected at £815m.

• Customer receivables rose 2.5% to £1,309m, with credit sales up 6.8% driven by the new Pay in Three product.

Outlook and guidance

• Full-year profit expected to rise 8.4% to £1,255m; EPS up 10%, total shareholder return projected at 12.6%.

• Full year sales guidance increased by £22m and profit by £12m, with total group sales expected to grow 6.9%.

• UK H2 outlook trimmed due to anticipated inflationary pressures and limited government fiscal flexibility.

• International sales guidance raised to 20.5% for H2, but growth expected to moderate as prior year comparatives annualize.

• Net margin for the group improved by 0.3% to 16.1%.