Next plc says its pre-tax profit slumped to £342 million in fiscal 2021

Written by: Wajeeh Khan
April 1, 2021
  • Next plc says its pre-tax profit slumped to £342 million in fiscal 2021.
  • The British multinational retailer reports £3.28 billion of revenue.
  • Next's dividend and share repurchase programme remains suspended.

Next plc (LON: NXT) said on Thursday that its pre-tax profit posted a significant decline in fiscal 2021 due to the ongoing Coronavirus pandemic that pushed its stores into temporarily shutting down. The company, however, expressed confidence that performance will recover considerably in fiscal 2022.

Next plc jumped more than 2% in premarket trading on Thursday. Including the price action, the stock is now exchanging hands at £81 per share. In comparison, the London listed company had started the year 2021 at a much lower £69.12 per share.

Next plc reports £3.28 billion of revenue

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Next plc reported £342.4 million of pre-tax profit in the year that concluded on 30th January. In the previous year, its pre-tax profit stood at a much higher £748.5 million. According to FactSet, experts had forecast the company to post a higher £355.6 million of pre-tax profit in 2021.

The retailer’s own guidance was for £370 million of pre-tax profit in the recent year. It had raised its guidance in January from £365 million.

The clothing company said it generated £3.28 billion of revenue in 2021 – a decline from £4.0 billion in the previous year. Next plc valued its total sales at the end of the financial year at £3.6 billion versus the year-ago figure of £4.4 billion.

In comparison, analysts had called for £3.62 billion of revenue for the Leicester-based company in the recent year. The board refrained from resuming dividend payments on fears of COVID-19 uncertainty. Next’s share repurchase programme also remained suspended.  

Liberum analysts’ comments on the financial update

Liberum analysts commented on the financial update on Thursday and said:

“We remain positive about further online growth as Next attracts new Brands and develops the Platform Plus, Total Platform and licensing models. Retail profitability will be supported by the ongoing rent renegotiations and potential rates reform, while the finance income is underpinned by a quality debtors book.”

In separate news, the American multinational financial services corporation Mastercard said on Thursday that it will invest £72.50 million in Airtel Africa’s mobile money unit.

Next plc remained almost flat on average in the stock market last year with an annual gain of roughly 1.0% only. At the time of writing, the British multinational clothing, footwear, and home products retailer has a market cap of £10.68 billion and a price to earnings ratio of 31.22.