Next PLC (LON:NXT) shareholders are set to pocket a special dividend after sales during the last eleven weeks 'materially' beat expectations, with the retailer also raising profits guidance.
Trading has been so good the regulatory update was brought forward two weeks, the clothing, footwear, accessories and home products group said.
Next also revealed it decided to pay £29mln of business rates relief to the government for periods when its shops were open but not charged due to Coronavirus (COVID-19) support measures.
“This decision was taken after consulting major shareholders who, between them, account for around 30% of our shares in issue,” said the statement.
Full-price sales in the eleven weeks to 17 July were up 18.6% compared to the pre-pandemic year 2019-2020 and the previous estimate of a 3% rise.
Guidance for the rest of the year is now estimated to be growth of between 3% to 6%.
Another £30mln has been added to full-year profit before tax outlook due to this sales strength, with the forecast now £750m or towards the top of previous forecasts.
Surplus cash at the year-end will be around £240mln, said the retailer, which will be handed back to investors with a first special dividend of 110p scheduled for September and costing £140mln. A second payment is scheduled around Christmas.
Over the eleven weeks to 17 July, online sales jumped 44% while the shops recovered from the first-quarter dip of 76% to minus 6% in the second three months.
Next said the reasons for the good sales were a combination of pent-up demand, warm weather from May onwards, fewer holidays and people just having more money after being locked down for so long.
The special dividends reflected the suspension of payments last year, said the FTSE 100 group, with the intention to return to ordinary dividends in the year to January 2023.