Share performance:
The main objective of every business is to make profit and to continue chasing every measure to gain more profit. NEXT plc has always been motivated and consistent in operating under the guidance of their business strategies and objectives. The core financial interest of the group is to deliver long term, sustainable returns to its shareholders through a combination of growth in earning per share (EPS) and pay out cash. (NEXT, 2016).
2008 big fall
From early 1990, NEXT plc profits continuously increased by restructuring and streamlining actions. By the end of 2007, NEXT profits rocketed from £2.3 million to £498 million. Although market share declined from 8.3 percent in 2005 to 7.7 percent in 2007 (Mintel, 2008) However, …show more content…
(Annual Report, 2015). During January 2008, the Company had 200,996,687 shares in issue. As at 17 March 2008, the Company had 199,946,687 shares in issue. NEXT bought 26 million shares for cancellation at price 1974 pence of £ 513 million. This was 11.5% of the shares in issue at the beginning of the year. To return the surplus capital through buy back is the right strategy to maximise earning per share and to create the value for shareholders. Over the 8 years, NEXT already bought 46% of the issued capital at an average of 1125 pence. In the year 2009, NEXT has returned over £ 2.0 billion to its shareholder by way of share buyback and in excess of £ 806 million in dividends without adding any operational risk. Company has policy to invest the money through buy back the shares. For this purpose, during the year Company bought 5.9 million shares for £120 million, its 3% of issue and end of the year 3.6 million share of £ 70 million. During 2008 to 2012, NEXT plc’s share price rose from 955 pence (Annual Report, 2008) to 2639 pence (Annual Report, 2012). During the same period, NEXT plc’s market capitalisation grew from £1.9 billion to £4.4 …show more content…
The company has grown its earnings and dividends at double digits year after year. During 2015, NEXT performed solid in the UK clothing market reported 3 percent in sales and 4.9 percent increase in operating profits. Its Directory division returned impressive operating margins of around 25 percent and Retail division delivered ever-increased margins. (Mintel, 2016) Share price rose by 14 percent from £ 62.80 to £71.50. Cash flow remained strong and the Group returned to its shareholder £572 million through a combination of dividend £434 million and buyback £ 138 million. This buyback action was transparent to the financial market, had given shareholders the opportunity for capital as well as revenue returns. NEXT paid special dividend of 50 pence in February 2015 and then 60 pence in May 2015. NEXT performed in retail market by keeping small debts to only 1.7 times to its five years average post tax profits, Group kept his pension scheme very small so no pension deficit caused any problem. NEXT did not make any acquisitions in last 10 years and NEXT plc’s capex requirements are very low at 25 percent of profits on average (ukvalueinvestor.com, 2016). All these small features made NEXT’s share climbed at 8000 pence in 2015. Figure 1. Shows that earning per share (EPS) growth and dividend growth both lagged by Total revenue
The main objective of every business is to make profit and to continue chasing every measure to gain more profit. NEXT plc has always been motivated and consistent in operating under the guidance of their business strategies and objectives. The core financial interest of the group is to deliver long term, sustainable returns to its shareholders through a combination of growth in earning per share (EPS) and pay out cash. (NEXT, 2016).
2008 big fall
From early 1990, NEXT plc profits continuously increased by restructuring and streamlining actions. By the end of 2007, NEXT profits rocketed from £2.3 million to £498 million. Although market share declined from 8.3 percent in 2005 to 7.7 percent in 2007 (Mintel, 2008) However, …show more content…
(Annual Report, 2015). During January 2008, the Company had 200,996,687 shares in issue. As at 17 March 2008, the Company had 199,946,687 shares in issue. NEXT bought 26 million shares for cancellation at price 1974 pence of £ 513 million. This was 11.5% of the shares in issue at the beginning of the year. To return the surplus capital through buy back is the right strategy to maximise earning per share and to create the value for shareholders. Over the 8 years, NEXT already bought 46% of the issued capital at an average of 1125 pence. In the year 2009, NEXT has returned over £ 2.0 billion to its shareholder by way of share buyback and in excess of £ 806 million in dividends without adding any operational risk. Company has policy to invest the money through buy back the shares. For this purpose, during the year Company bought 5.9 million shares for £120 million, its 3% of issue and end of the year 3.6 million share of £ 70 million. During 2008 to 2012, NEXT plc’s share price rose from 955 pence (Annual Report, 2008) to 2639 pence (Annual Report, 2012). During the same period, NEXT plc’s market capitalisation grew from £1.9 billion to £4.4 …show more content…
The company has grown its earnings and dividends at double digits year after year. During 2015, NEXT performed solid in the UK clothing market reported 3 percent in sales and 4.9 percent increase in operating profits. Its Directory division returned impressive operating margins of around 25 percent and Retail division delivered ever-increased margins. (Mintel, 2016) Share price rose by 14 percent from £ 62.80 to £71.50. Cash flow remained strong and the Group returned to its shareholder £572 million through a combination of dividend £434 million and buyback £ 138 million. This buyback action was transparent to the financial market, had given shareholders the opportunity for capital as well as revenue returns. NEXT paid special dividend of 50 pence in February 2015 and then 60 pence in May 2015. NEXT performed in retail market by keeping small debts to only 1.7 times to its five years average post tax profits, Group kept his pension scheme very small so no pension deficit caused any problem. NEXT did not make any acquisitions in last 10 years and NEXT plc’s capex requirements are very low at 25 percent of profits on average (ukvalueinvestor.com, 2016). All these small features made NEXT’s share climbed at 8000 pence in 2015. Figure 1. Shows that earning per share (EPS) growth and dividend growth both lagged by Total revenue