Tag Archives: profits

Next sales on target as online business outperforms

Total sales at the clothes retailer between 1 August and 24 December rose 3.1% compared with a year earlier, ignoring the effect of rising VAT.Next Directory sales grew 16.9%.
But its High Street business, which sees some two-thirds of sales, recorded a 2.7% fall, sending Next’s share price 4.3% lower in early London trading.Next has seen its share price rise 39% over the past 12 months, easily outperforming a 5% fall in the broader FTSE 100 index.Shares in some other big retailers also fell in the wake of Next’s announcement, which was the first trading update of the year from a major High Street chain.

Home Retail Group – owner of Homebase and Argos – dropped 4.7%, while car accessories chain Halfords was down 3%.
Profit margins
Next reconfirmed its full-year profits forecast at £565m, narrowing the range to plus-or-minus £7m.
The total sales growth figure of 3.1% was in the middle of its previous guidance of 2.5% to 4%, despite the “slightly disappointing” numbers from its 500 stores.

Next expressed uncertainty in its statement as to why the High Street performance had been so weak, particularly considering that last year’s sales had been hurt by cold weather.One possibility cited in its statement was its long-standing policy of not cutting the price of its products in the run-up to Christmas.

“Next’s own admission of disappointment is a setback to its hitherto robust growth story,” said Richard Hunter, head of equities at brokerage Hargreaves Lansdown.

“The fact that the company did not discount its products in the approach to Christmas may have been a factor, whilst the more general consumer malaise has yet to be corroborated by updates from its rivals.

“In addition, higher sales do not necessarily translate to higher profits, so the fact that the company has been able to maintain operating margins may yet play into its hands.”

Richard Perks, analyst at research firm Mintel, confirmed this view.

“These figures from Next are really pretty good I think,” he told the BBC.

“OK, Next may be – in sales terms – held back by the fact that it wasn’t discounting, but in profit terms it will be a lot better off.”

Mr Perks said he was optimistic about retail sales across the UK – predicting a 4% rise in December.

“People are reluctant to cut back any more on retail, and are cutting back elsewhere, particularly on leisure,” although he added that the rising cost of food was still crimping spending.

Next said it was cautiously optimistic about its end of season sales – which began after the end of its latest reporting period – and expected results to be slightly ahead of budget.

The retailer said it expected sales this year to be helped by a probable freeze in the price of its products.

It forecast generating £200m surplus cash in the year ahead, which it said it would return to shareholders via share buybacks.

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Iran nuclear crisis: Sanctions ‘beginning to bite’

Iran nuclear crisis: Sanctions ‘beginning to bite’

The US has said threats by Iran to restrict Gulf shipping in the event of further sanctions shows international pressure is having an effect.

The State Department said sanctions on Tehran over its nuclear programme were starting to bite and that Iran was trying to create a distraction.

Iran has conducted 10 days of exercises near the strategically vital Strait of Hormuz, test-firing several missiles.

Its currency is at a record low, but it has denied sanctions are to blame.

The UN Security Council has already passed four rounds of sanctions against Iran for refusing to halt uranium enrichment.

Highly enriched uranium can be processed into nuclear weapons, but Iran denies Western charges that it is trying to develop them.

Tehran says its programme is peaceful – it needs nuclear technology to generate electricity to meet growing domestic demand.The US has also sanctioned dozens of Iranian government agencies, officials and businesses over the nuclear programme.

The government in Tehran has dismissed the latest measures announced in the wake of a critical IAEA report in November.

US President Barack Obama signed into law the US bill targeting Iran’s central bank on Saturday. It enters into force in six months’ time.

Since then, however, the Iranian national currency, the rial, has lost about 12% of its value – trading at about 17,200-18,000 rials to $1.

Earlier on Tuesday, French Foreign Minister Alain Juppe called for “stricter sanctions” and urged EU countries to follow the US in freezing Iranian central bank assets and imposing an embargo on oil exports.
‘Mock’ exercises

Speaking to journalists, the State Department’s Victoria Nuland said Tehran was feeling increasingly isolated because of the sanctions.

“Frankly we see these threats from Tehran as just increasing evidence that the international pressure is beginning to bite there and that they are feeling increasingly isolated and they are trying to divert the attention of their own public from the difficulties inside Iran, including the economic difficulties as a result of the sanctions,” she said.

Meanwhile Pentagon spokesman George Little responded to Iranian warnings to keep an aircraft carrier out of the Gulf, saying the Navy was operating within international law and had no plans to pull warships out of the region.Iran has been holding a series of naval exercises in the Gulf, and on Monday

said it had successfully test-fired a surface-to-sea Qader cruise missile, a shorter range Nasr and later, a surface-to-surface Nour missile.

A medium-range surface-to-air missile was successfully launched on Sunday, Iranian media reported.

Iran has conducted 10 days of exercises near the Strait of Hormuz, through which 20% of the world’s traded oil passes.

Tehran said on Monday that “mock” exercises on shutting the strait had been carried out, although there was no intention of closing it.

The BBC’s Iran correspondent James Reynolds says Iran is using the exercises to try to show that it owns the Gulf and has the military capability to defend against any threat to its dominance.

But, says our correspondent, few believe Iran would carry out its threat to shut the Strait of Hormuz as to do so would be considered too economically, politically and possibly militarily damaging for Tehran.

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Republicans begin 2012 US election

Republicans begin 2012 US election

 

Mitt Romney, Ron Paul and Rick Santorum led in preliminary results, but the race remains too close to call with votes held in more than 1,700 caucuses.

Six Republican contenders spent Tuesday making frantic final appeals to voters.

The caucus meetings are the first time voters have a say in the race to face Democratic President Barack Obama in November’s general election.

Tuesday evening’s contest launches months of caucuses and primary elections in 50 states, Washington DC and other territories, culminating in the Republican National Convention in August where the party nominee will be formally anointed.
About 120,000 voters gathered at more than 1,700 fire stations, schools, public buildings and private homes ahead of the official 20:00 EST (01:00 GMT) start to the voting.

An Associated Press poll of voters ahead of the start of the caucus start confirmed that former Massachusetts Governor Romney, Texas Congressman Paul and former Pennsylvania Senator Rick Santorum formed the top tier of candidates.

Former House Speaker Newt Gingrich, Minnesota Congresswoman Michelle Bachmann and Texas Governor Rick Perry are also in the race. Former Utah Governor Jon Huntsman is on the ballot, but did not campaign in Iowa.

Preliminary exit poll results from ABC News indicated independent voters – who are allowed to register as Republicans and participate in the caucuses – had voted heavily in favour of Mr Paul.
Evangelical Christians were split between Mr Santorum and Mr Paul, and the half of caucus-goers describing themselves as “very conservative” were tilting to Mr Santorum.

Also, ABC’s exit poll showed Mr Romney doing well among older voters – a significant chunk of the electorate.
Small town affairs

In the caucuses, voters are allowed to speak on behalf of the candidates they support, followed by a vote, the results of which are transmitted on to the media and to the state Republican party.

Many of the caucuses are tiny affairs held in small towns in each of Iowa’s 99 counties.

In Dawson, fewer than 20 voters gathered at a fire station to hold a caucus amid the fire trucks, reports BBC North America Editor Mark Mardell.

A hall in a school in Des Moines was overflowing with caucus goers, reports the BBC’s Steve Kingstone.

“It’s hard to spot a Bachmann fan, but other candidates all have support here,” he reports.

Iowa is not expected to settle the contest – John McCain, the eventual Republican nominee in 2008, came fourth in the state’s caucuses that year – but it will help shape the race for the White House.

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