Fashion retailer Next hiked its interim dividend payout after driving up half-year profits by 8.2 per cent despite a fall in retail sales. The fashion retailer said pre-tax profit rose 8.2% to £271.8m from £251.3m after it sold more clothes at full price and fewer clothes in its sale. It said that consumers were tending to buy clothes closer to the point of needing them and this had helped drive up sales in July when the weather became much warmer. Chief Executive Simon Wolfson said: "We went into sale with 18% less stock than last year and markdown sales were consequently 13% down on last year."The combined effect of better full-price sales, lower unprofitable markdown sales and good cost control meant that operating margins improved in both retail and directory."Next retail sales were down 0.9% in the six months to £1bn, but its catalogue arm Next Directory saw sales leap 8.3% to £597.6m after strong growth in international sales.The dividend payment has been lifted to 36p from 31p and Next said it planned to return between £250m and £350m to shareholders through share buyback this year. Next said it was sticking to its guidance for brand sales to lift between 1.5% and 3.5% this year and it expects profits to rise between 2.2% and 8.6%. TB