Britain's second biggest retailer Next yesterday announced another special dividend of £90m in order to return surplus cash to shareholders it had originally planned to pay out via a share buyback.
The clothing and homewares retailer, which has enjoyed years of stellar growth under chief executive Lord Wolfson’s watch – even overtaking Marks & Spencer in profits last year – said it would pay a special dividend of 60p a share on 1 May to investors.
Next has a well established policy of returning surplus cash to shareholders through share buybacks or special dividends. Its last special dividend, one of 50p a share, was announced in December.
The retailer forecast that at the lower end of its profit guidance for the 2015-16 year it will generate around £360m of surplus cash.
Next said that as its share price remained above £67, it has not been able to return surplus cash via a share buyback. Instead it intends to pay four quarterly special dividends of approximately £90m, or 60p per share, each. The first of these was announced yesterday.
Despite the new increased payout and the prospect of more, Next said it remained cautious for the year ahead and was not changing its 2015-16 profit guidance.
Next is set to report its full-year results for the year to January on 19 March. It has forecast a pre-tax profit of £775m.