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Summary: Next shares hit; Aggreko sales rise

Next StraitonShares in fashion chain Next tumbled 5.73% following a trading update which revealed a sharp fall in sales at its shops.

Sales rose faster than expected during the second quarter, up 2.8% in the three months to 28 July compared to the same period last year. This compares to expectations of a 1% uplift.

However, online sales were responsible for the rise, up 12.5%, compared to its retail stores where trade fell by 5.9%.

Much of the rise “was due to the prolonged period of exceptionally warm weather, which greatly assisted the sales of summer weight product”, it said.

It added: “It is almost certain that some of these sales have been pulled forward from August, so we are maintaining our sales and profit guidance for the year to January 2019.”

Aggreko

Underlying group revenue at the temporary power company rose 14%, driven by a strong performance in Rental Solutions which offset the decline in Power Solutions Utility. Underlying profit before tax was up 8% at £59 million.

The group is proposing to maintain the interim dividend at 9.38 pence per share (2017: 9.38 per share), which equates to dividend cover of 1.7 times (2017: 1.9 times).

The company said: “Our good first half performance, combined with the expected improvement in Power Solutions Industrial and continued growth in Rental Solutions, give us confidence we are on track to deliver our guidance for the full year of profit before tax in line with 2017, excluding the effects of currency. ”

Chief executive Chris Weston said: “These are encouraging results that keep us well on track to deliver our full year guidance.  As we continue to execute on our strategy, we have also completed a comprehensive review of the Group’s expected performance over the medium term. 

“Based on this review, and the detailed action plans we have developed, we are confident that the Group can deliver a return on capital employed in the mid-teens in 2020 with potential for further improvement beyond this.” 

 



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