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NEXT plc To Return £90m Per Quarter To Shareholders Via Special Dividends

Next (LSE: NXT) this morning said that it has paid a special dividend of 50p per share, as it announced in a trading statement at the end of December.  Next says that the payment is in line with its well-established policy of returning surplus cash to shareholders via share buybacks or special dividends. Next’s share price  is up 0.5% at the time of writing.

Back in December Next set an upper limit for share buybacks of £67 per share. Since then, Next’s share price has remained above that level, and the company has therefore been unable to implement any buybacks.  So Next today announced that it will be paying a further special dividend of 60p per share on 1 May 2015, with an ex-dividend date of 10 April.

Next says that the 20% increase in the special dividend, from 50p to 60p per share, reflects the company’s expectations for cash flow during 2015, but that it does not indicate current trading performance. Next says that it remains “cautious” and that it’s not currently changing either its profit guidance or share buyback limit.

Then company says it’s forecasting around £360m of surplus cash at the lower end of its profit guidance for 2015, and that, if it’s unable to return cash by means of a buyback scheme, it will do so via four quarterly special dividends of approximately £90m each. This equates to 60p per share, per quarter, of which the further special announced today will be the first payment.

At 7,125p, Next”s share price is up 16% on this time last year, compared with a rise of 6% in the FTSE 100 in that time. And over the longer term, Next has stormed ahead, with a share price gain of 273%, versus the FTSE 100’s 35%.

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.