• Profit before tax increased 6.9%
  • Total sales grew 1%
  • GBP429m FY profit forecast

UK retailer Next Plc has posted improved profits for the first half of its financial year and upped its full-year guidance.

The company said group profit before tax increased 6.9% to GBP185m for the six months to July, as a result of lower interest expense.

Retail like-for-like sales were down 1.2%, while total sales grew 1%, attributed to a slight improvement in the consumer environment and favourable weather.

Retail sales were marginally ahead of last year at 0.8%, while revenues at its directory home shopping business finished up 1.7%.

The company said stock and costs have been controlled well and net operating margin in the first half has moved forward.

In its outlook the company said that assuming sales are within budget, it will deliver FY profits close to last year's GBP429m. This was above the previous GBP400m estimate.

"As we suggested at the beginning of the year, the consumer recession has been less extreme than many forecasters were predicting.

"Some assumed that a cataclysm in the financial markets would lead to a similar crisis in consumer markets - this has not been the case. It's been a recession not Armageddon," the company added.

Follow this link to Next's full H1 financial statement.