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Saturday, February 27, 2021

Next plc swings to a loss in H1 due to COVID-19 disruptions.

  • Next plc swings to a loss in H1 due to COVID-19 disruptions.
  • The retailer reports £1.29 billion of revenue in the first half.
  • Next forecasts £300 million of annual profit in fiscal 2021.

Next plc (LON: NXT) said on Thursday that it concluded the fiscal first half in loss attributed to COVID-19 disruptions. The company, however, expressed confidence that performance will pick up significantly in the upcoming months as it raised its guidance for the full fiscal 2021.

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Next plc remained almost flat in premarket trading on Thursday. Shares of the company jumped about 2.5% on market open to hit an intraday high of £63.52 per share. The retailer has recovered more than 85% since the first week of April when it traded at £33.90 per share. At the start of the year, however, Next had a higher per-share price of £69.50. Learn more about the stock market volatility.

Next reports £1.29 billion of revenue in H1

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In the six months that concluded on 25th July, the clothing company reported £16.5 million of pre-tax loss. In the same period last year, it had recorded a much higher £327.4 million of profit. In terms of revenue, Next printed £1.29 billion versus the year-ago figure of £2.01 billion.

The FTSE 100 listed company also highlighted on Thursday that its retail sales came in at £344.6 million in the first half versus a much higher £874.3 million in the comparable period of fiscal 2020. Next announced to have partnered with L Brands earlier this week for Victoria’s Secret UK.

Its digital sales in the first six months of fiscal 2021 also saw a slight decline from £1 billion last year to £862.6 million, as per the report publish on Thursday. The company’s board decided in favour of keeping the interim dividend suspended for the year to January 2021.

Next’s guidance for full-year profit

According to the Leicester-based company:

“Full price sales at the beginning of the second half have continued to exceed our expectations, and we have revised our central scenario for full-year profit, up from £195 million to £300 million.”

Next published its financial results for the second quarter in the last week of July that highlighted the retailer to have taken a significant hit due to the ongoing Coronavirus pandemic. The novel flu-like virus has so far infected more than 378 thousand people in the United Kingdom and caused over 41 thousand deaths.

At the time of writing, the British multinational has a market cap of £8.42 billion and a price to earnings ratio of 13.52.

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