Wonder-stock Next (LSE: NXT) on course to lift earnings by up to 15%
Next (LSE: NXT) gained 137p, or 4%, to 3,356p this morning after the retail chain lifted its profit guidance for the full year.
A trading statement today revealed first-half sales had climbed 4.5% and signalled annual profits should come in between £575 million and £620 million. Next had previously indicated profits would be between £560 million and £610 million.
Today's statement confirmed shareholders could expect profit growth of up to 9% for the twelve months to January 2013. Next also said a £200 million share-buyback programme could help current-year earnings advance by up to 15%.
Today's statement also underlined how Next remains one of the market's most resilient and shareholder-focused FTSE 100 (UKX) companies.
Since the credit crunch erupted during 2007, a combination of higher profits and regular buybacks has pushed earnings per share 74% higher and dividends per share 84% higher. During the last ten years, earnings per share have advanced 340% while the dividend has been raised 227%.
Naturally the share price has been a very strong performer. Indeed, it has been one-way traffic since 2008, when the shares hit a banking-crash low of 838p.
In fact, since the chain's deep troubles in the early 90s, Next's shares have been among the most impressive in the London market. The price touched just 12.75p during 1991 as the group flirted with bankruptcy, but anyone smart enough to buy then and hold on would now be sitting on a 262-fold capital gain.
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> Maynard does not own any share mentioned in this article.