With stores closed for a significant portion of 2020, profit and turnover at Next, for the year ending January 2021, are down.
The retail giant posted a profit before tax of £342m, declining from £729m in the year prior.
Total sales meanwhile were down 17%, reducing by £736m (£3.625bn in comparison to £4.361bn), with almost all of this reduction being in the first half of the year. In the second half, the sales lost in retail (-£368m) were almost entirely offset by sales gained online (+£364m).
Michael Roney, Chairman, said: “In last year’s Full Year Results, published just as the UK went into lockdown, we stated that our sector was facing a crisis unprecedented in living memory. We also stated that our strong balance sheet and profit margins would allow us to weather the storm.
“Both statements have proved true. A year on, NEXT has delivered profit before tax of £342m (2019/20: £729m, both pre-IFRS 16) in line with the central guidance issued in our January 2021 Trading Statement. Despite most of our stores being closed for a significant portion of 2020/21, Total Group sales decreased by less than 17% to £3.6bn (2019/20: £4.4bn).
“In April 2020, we stated our intention to suspend all capital returns to shareholders for the duration of the financial year and until the situation stabilises. Given the continuing uncertainty around when our stores will reopen, no final dividend is proposed for 2020/21 and our share buyback programme remains suspended. We remain committed to returning capital to shareholders in the long term and will review our position later in the year when we have better visibility of our trade once our stores reopen.
“Our cash resources have been carefully managed with a number of actions taken to conserve cash during the year. As a result, net debt reduced to £610m (2019/20: £1.1bn).
“We expect the shift in consumer behaviour towards Online sales to continue for some time and one of our priorities during the year has been to continue the development of our Online platform. We accelerated part of our planned capital expenditure in the Online business, spending £121m on warehousing and systems.”
He continued: “I believe that in difficult times there is a clearer separation between the stronger corporate performers and the weaker ones. This result is due to the formation of a good management team and the establishment of robust processes during less volatile periods. Our continued investment over many years in our people and our systems has shown resilient results in the past year.
“The strength of the Group is built on the hard work and dedication of all NEXT’s people and this year has highlighted their resilience and ability to work together in times of crisis. I would like to thank them for their outstanding work during an extremely demanding year.”