(Alliance News) - Next PLC on Thursday reported a rise in full-year sales, helped by double-digit growth in its online unit but said that, due to the Covid-19 health crisis, it will not declare a final payout but will instead propose a second interim dividend in June.
The retailer said its current plan is to declare an interim payout of 116.5 pence per share. Earlier in the year ended January, Next made a first interim payout of 57.5p per share, a 4.5% year-on-year rise.
Pretax profit during the recent year rose 2.0% to GBP748.5 million from GBP733.6 million. Excluding IFRS 16, an accounting rule governing the financial treatment of leases, pretax profit edged 0.8% higher to GBP728.5 million from 722.9 million.
Turning to sales, online growth helped Next post a 3.3% rise to GBP4.36 billion from GBP4.22 billion.
Online, where it generated the majority of its sales, rose 12% to GBP2.15 billion. The bricks and mortar retail unit, last year Next's largest sales contributor, was this year usurped by online and saw sales fall 5.3% to GBP1.85 billion. Next also generates sales revenue from its Finance segment, which allows customers to buy on credit.
On the Covid-19 pandemic, Next warned: "We have no experience of a similar crisis so there is no way of predicting the extent that the effect coronavirus will have on our Retail and Online sales. It is not yet clear how widespread the virus will be at any one time, how long the pandemic will last and what the medium- to long-term effect of this pandemic will be on consumer behaviour.
"Demand will be the biggest issue and although the virus is likely to impact our operations, we do not believe this will be as damaging as the very significant drop in sales sustained both in Retail and Online."
Next said it Online segment will likely fare better than the Retail unit, but the company cautioned it will "also suffer significant losses".
For the current financial year, sales up to the evening on March 17 were 30% lower year-on-year, with a 25% fall in Online, excluding overseas, and 46% in Retail.
"People do not buy a new outfit to stay at home. There is some evidence from our overseas sites that as restrictions on movement increase, the difference between Online and Retail sales performance widens, with Online picking up a small amount of the business that cannot be carried out in store," Next added.
Next, which carried a detailed "stress test" on the effect of the virus outbreak, warned that its full-year sales could fall by as much as 25%.
It modelled scenarios which predicted full price sales losses of GBP445 million, GBP820 million and GBP1 billion, respectively.
"These declines represent minus 10%, minus 20% and minus 25% of our annual turnover," Next explained.
In Next's base case guidance, which does not include Covid-19 pain, it expects total full prices, including interest income, to rise 3.0% and pretax profit to fall to GBP734 million.
Shares in the company were 2.8% lower at 3,958.00p each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Next (NXT)