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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Next Plc | LSE:NXT | London | Ordinary Share | GB0032089863 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
16.00 | 0.18% | 8,844.00 | 8,874.00 | 8,878.00 | 8,896.00 | 8,774.00 | 8,872.00 | 269,337 | 16:35:05 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Fabricated Textile Pds, Nec | 5.49B | 802.3M | 6.3274 | 14.03 | 11.26B |
TIDMNXT
RNS Number : 0428W
Next PLC
20 April 2021
Contacts: Alistair Mackinnon-Musson Rowbell PR Email: next@rowbellpr.com Tel: 020 7717 5239 Photographs: Photographs available at: http://press.next.co.uk/media/company-images/campaignimages.aspx
Next plc (the "Company")
Annual Financial Report for period ended January 2021
including the Notice of Annual General Meeting ("AGM") - convened for
20 May 2021
The Company announces that the Annual Financial Report for the period ended January 2021 is today being posted or otherwise made available to shareholders and published on its website, www.nextplc.co.uk .
In accordance with Listing Rule 9.6.1 a copy of this Report together with a Form of Proxy for the 2021 Annual General Meeting has been uploaded to the National Storage Mechanism and will be available for viewing shortly at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
AGM
The ongoing Government restrictions on mass gatherings, non-essential travel and social contact in relation to COVID are likely to impact the ability of shareholders to attend the AGM. Based on current restrictions, the Board has concluded that it is appropriate to strongly urge shareholders not to attend the AGM in person this year. Shareholders are instead requested to make use of the electronic facilities to participate and vote remotely.
Shareholders can access the AGM by visiting https://web.lumiagm.com . Further information on how to join the AGM electronically, including a step by step user guide, can be found in the Notice of AGM.
We strongly encourage shareholders who will not be participating in the meeting electronically to submit a proxy vote in advance of the meeting.
S L Anderson
Company Secretary
Next plc
The Appendix to this announcement is a supplement to our preliminary statement of financial results made on 1 April 2021 (the "Final Results Announcement"). It contains the information required pursuant to DTR 6.3.5 that is in addition to the information communicated in the Final Results Announcement, and should be read together with the Final Results Announcement.
APPIX
The Chief Executive's Review in the preliminary statement of the Financial Results Announcement issued on 1 April 2021 includes a commentary on the primary uncertainties affecting the Group's businesses for 2021/22.
Further details of other key risks and uncertainties relating to the Group are set out on pages 72 to 76 of the 2021 Annual Report. The directors' responsibilities statement can be found on page 100 of the 2021 Annual Report. The following is extracted in full unedited text from the 2021 Annual Report. Accordingly, page references in the text below refer to page numbers in the 2021 Annual Report.
Risk trend: Increasing Unchanged Decreasing
Principal risk and description Business strategy development and How we manage or mitigate the risk implementation * The Board reviews business strategy on a regular If the Board adopts the wrong business basis to determine how sales and profit can be strategy or does not implement its maximised, and business operations made more strategies effectively, our business efficient. may suffer. The Board therefore needs to understand and properly manage strategic risk, taking into * The Chief Executive provides regular updates at Board account specific retail sector risk meetings regarding key opportunities and progress of factors, in order to deliver long major initiatives. term growth for the benefit of NEXT's stakeholders. * Our International Online business and our third-party LABEL business provide geographic and product diversity. * Our disciplined approach to sales, budgeting, investment returns and cost control ensures the Company continues to generate strong profits and cash flows. * The Board and senior management consider strategic risk factors, wider economic and industry specific trends that affect the Group's businesses, the competitive position of its product and the financial structure of the Group. * A detailed plan to manage the business going forward and its longer term direction of travel exists and is clearly articulated to our stakeholders in our annual and half yearly reports. * Longer term financial scenarios for our Retail business have been prepared and stress tested. This process provides a mechanism for ensuring that business profitability is maximised through efficient allocation of resources and management of costs. ----------------------------------------------------------------------- Product design and selection How we manage or mitigate the risk * Executive directors and senior management continually Our success depends on designing review the design, selection and performance of NEXT and selecting products that customers product ranges and those of other brands sold by want to buy, at appropriate price NEXT. points and stocked in the right quantities. * LABEL brands (along with our new Beauty business) In the short term, a failure to have served to increase the breadth of our website manage this risk may result in surplus offer far beyond NEXT's natural design, fashion and stocks that cannot be sold and may price boundaries. Just as important, but much less have to be disposed of at a loss. obvious, has been the numerous ways in which our own NEXT product ranges have been extended and Over the longer term a failure to diversified. meet the design, quality and value expectations of our customers will adversely affect the reputation * Executive directors and senior management regularly of the NEXT Brand. review product range trends to assess and correct any key selection or product issues. Corrections to significant missed trends or poorer performing ranges are targeted for amendment, with alternative products being sourced within six months where necessary. * Senior product management approves quality standards, with in-house quality control and testing teams in place across all product areas. * Senior management regularly reviews product recalls and product safety related issues. ----------------------------------------------------------------------- Key suppliers and supply chain How we manage or mitigate the risk management * Stock availability is reviewed on an ongoing basis and appropriate action taken where service or Reliance on our supplier base to delivery to customers may be negatively impacted. deliver products on time and to quality standards is essential. Failure to do so may result in an * Management continually seeks ways to develop our
inability to service customer demand supplier base to reduce over-reliance on individual or adversely affect NEXT's reputation. suppliers and to maintain the quality and competitiveness of our offer. The Group's supplier Changes in global manufacturing risk assessment procedures establish contingency capacity and costs may impact on plans in the event of key supplier failure. profit margins. Non-compliance by suppliers with * Existing and new sources of product supply are the NEXT Code of Practice may increase developed in conjunction with NEXT Sourcing, external reputational risk or undermine our agents and/or direct suppliers. reputation as a responsible retailer. * Our in-house global Code of Practice team carry out regular audits of our product-related suppliers' operations to ensure compliance with the standards set out in our Code. These standards cover supplier production methods, employee working conditions, quality control and inspection processes. Further details are set out on page 81. * We train relevant employees and communicate with suppliers regarding our expectations in relation to responsible sourcing, anti-bribery, human rights and modern slavery. * The Audit Committee receives Code of Practice and modern slavery updates from senior management during the year. * The Audit Committee receives modern slavery and anti-bribery training progress updates together with whistleblowing reports at each meeting. Significant matters are reported to the Board. ----------------------------------------------------------------------- Warehousing and distribution How we manage or mitigate the risk * Planning processes are in place to ensure there is Our warehousing and distribution sufficient warehouse handling capacity for expected operations provide fundamental support future business volumes over the short and longer to the running of the business. terms. Risks include business interruption due to physical damage, access restrictions, breakdowns, capacity and resourcing * Service levels, warehouse handling, inbound logistics shortages, IT systems failure, inefficient and delivery costs are continually monitored to and slow processes and third-party ensure goods are delivered to our warehouses, Retail failures. stores and Online customers in a timely and cost-efficient manner. Increasing choice in the products NEXT sells has been central to the development of our Online Platform * Our Warehouse Leadership Team meets regularly to but the proliferation of unique assess the opportunities and risks in our warehouse items, along with an accelerated and logistics network. shift from Retail to Online sales resulting from COVID lockdowns has presented our warehouse operation * Business continuity plans and insurance are in place with significant challenges. to mitigate the impact of business interruption. * The Board has approved and keeps under regular review a warehouse investment proposal to accommodate further Online growth and transfer in customer demand from Retail to Online (see page 26 for further details). ----------------------------------------------------------------------- Business critical systems How we manage or mitigate the risk * Continued investment in technology which supports the NEXT's performance depends on the various component parts of the NEXT Online Platform. engagement, recruitment and retention of customers, and on its ability to drive and service customer demand. * Continual development and monitoring of performance There is a risk that the business of NEXT's UK and overseas websites, with a particular fails to adopt and/or maintain efficient focus on improving the online customer experience. use of suitable software, hardware and mechanization to provide both Retail and Online customers with * A range of key trade and operational meetings keep service levels that meet or exceed under review the performance, evolution, risks and their expectations. These systems, opportunities of the NEXT customer-facing systems. software and platforms are ever Executive directors are in attendance at each of changing, as technology continues these key meetings. to evolve. Keeping customers and users up to date and managing the implementation and changes that * Market research and customer feedback is used to come with the evolution of these assess customer opinions and satisfaction levels to platforms, in addition to maintenance help to ensure that we remain focused on delivering of existing systems, can be challenging. excellent customer service. As detailed in the Strategic Report, our business has an increased reliance * Ongoing monitoring of KPIs and feedback from website on technology and the development and call centre support operations. of new business ideas within the Group (such as Total Platform) increases that reliance further. ----------------------------------------------------------------------- Management of long term liabilities How we manage or mitigate the risk and capital expenditure * Our predominantly leased store portfolio is actively managed by senior management, with openings, refits Poor management of NEXT's longer and closures based on strict store profitability and term liabilities and capital expenditure cash payback criteria. could jeopardise the long term sustainability of the business. It is important to ensure that the business continues * We undertake regular reviews of lease expiry and to be responsive and flexible to break clauses to identify opportunities for exit or meet the challenges of a rapidly renegotiation of commitments. Leases will not be changing Retail sector. automatically renewed if acceptable terms are not agreed. * The Board regularly reviews our lease commitments, new store openings and potential store closures.
* We ensure that we make healthy returns on capital employed, commensurate with the risks involved in our sector (in practical terms this means a return of no less than 15% on capital invested). * Appropriate amortisation accounting policies reduce the risk of unexpected significant write-off. ----------------------------------------------------------------------- Information security, business continuity How we manage or mitigate the risk and cyber risk * We operate an Information Security and Data Protection Steering Committee. Its main activities The continued availability and integrity include agreement and monitoring of related key risks, of our IT systems is critical to activities and incidents. The Committee comprises two successful trading. Our systems executive directors and relevant senior management. must record and process substantial volumes of data and conduct inventory management accurately and quickly. * Significant investment in systems' development and Continuous enhancement and investment security programmes has continued during the year, is required to prevent obsolescence complemented by in- house dedicated information and and maintain responsiveness. physical security resources. The threat of unauthorised or malicious attack is an ongoing risk, the nature * Systems vulnerability and penetration testing is of which is constantly evolving carried out regularly by both internal and external and becoming increasingly sophisticated. resources to ensure that data is protected from Our brand reputation could be negatively corruption or unauthorised access or use. impacted by cyber security breaches. * Critical systems backup facilities and business continuity plans are reviewed and updated regularly. * Major incident simulations and business continuity tests are carried out periodically. * IT risks are managed through the application of internal policies and change management procedures, imposing contractual security requirements and service level agreements on third-party suppliers, and IT capacity management. * All staff and contractors are required to read, accept and comply with the Group's data protection and information security policies, which are kept under regular review and supported by training. * Information security and data protection risk exposure are reviewed during the year by both the Audit Committee and the Board; this informs an executive-sponsored programme of continuous improvement. ----------------------------------------------------------------------- Financial, treasury, liquidity and How we manage or mitigate the risk credit risks * NEXT operates a centralised treasury function which is responsible for managing liquidity, interest and NEXT's ability to meet its financial foreign currency risks. It operates under a Board obligations and to support the operations approved Treasury policy. Approved counterparty and of the business is dependent on other limits are in place to mitigate NEXT's exposure having sufficient funding over the to counterparty failure. Further details of the short, medium and long term. Group's treasury operations are given in Note 28 to the financial statements. NEXT is reliant on the availability of adequate financing from banks and capital markets to meet its * The Group's debt position, available liquidity and liquidity needs. cash flow projections are regularly monitored and reported to the Board. The Board will agree funding NEXT is exposed to foreign exchange for the Group in advance of its requirement to risk and profits may be adversely mitigate exposure to illiquid market conditions. affected by unforeseen moves in foreign exchange rates. * The events of 2020 led to very significant focus on NEXT might suffer financial loss the Group's liquidity position. The Board continues if a counterparty with which it to keep under review the cash generation levers has transacted fails and is unable available to it, including the potential quantum and to fulfil its contract. timescales of initiatives to reduce debt and realise cash. Net debt has been significantly reduced in the NEXT is also exposed to credit risk, year and actions taken have further strengthened the particularly in respect of our Online liquidity of the business. customer receivables, which at GBP1bn represents the largest item on the Group Balance Sheet. * NEXT has a Treasury Committee which includes the Group Finance Director. The Treasury Committee usually meets weekly to review the Group's treasury and liquidity risks including foreign exchange exposures. * Rigorous procedures are in place with regards to our credit account customers, including the use of external credit reference agencies and applying set risk criteria before acceptance. These procedures are regularly reviewed and updated. * Continual monitoring of our credit customers' payment behaviours and credit take up levels is in place. * The Board and Audit Committee receives regular updates throughout the year regarding the customer credit business. ----------------------------------------------------------------------- Legal, regulatory and ethical standards How we manage or mitigate the risk compliance * Policies and training are in place for those employees and contractors working in the business Failure to continuously adapt to areas that are subject to financial regulation. These
the increasingly broad, stringent are kept under review and updated. and fast-evolving regulatory framework applicable to the operation of the Group's customer credit business * A dedicated financial regulatory compliance and could result in significant financial quality assurance team monitors compliance and any penalties and remediation costs, changing requirements, working with external advisers reputational damage and/ or restrictions as required. on our ability to operate. With growing reliance on our digital * NEXT has identified a set of Conduct and Compliance online and marketing activities, risks, documented in an operational risk register, the Group could inadvertently process with owners and associated controls. customer or employee data in a manner deemed unethical or unlawful, resulting in significant financial penalties, * Key risk and control performance indicators are remediation costs, reputational managed through a series of operational meetings and damage and/or restrictions on our reported quarterly to the Retail Credit Board. ability to operate. This is against a backdrop of: * We operate an Information Security and Data Privacy * The changing attitude of UK consumers toward their Steering Committee. Its main activities include data and how it is used. agreement and monitoring of related key risk activities and incidents. The Committee comprises two executive directors and relevant senior management. * Increasingly complex and fast-evolving data protection law and regulation. * With regard to climate risk, the transitional (including regulatory requirements) and physical * Rapid technological advances delivering an enhanced risks and opportunities presented by rising ability to gather, draw insight from and monetise temperatures, climate-related policy, and emerging personal data. technologies will be kept under review using the TCFD framework. Climate risk, regulatory changes and stakeholder expectations are considered on an ongoing basis by our ESG Steering Group and Audit Committee. With regard to climate risk, stakeholder expectations and regulatory attention could develop at pace, impacting the rate at which the business may need to cut carbon emissions. -----------------------------------------------------------------------
Directors' Responsibilities statement
Directors' Responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. Additionally the Financial Conduct Authority's Disclosure Guidance and Transparency Rules require the directors to prepare the group financial statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and parent company financial statements in accordance with United Kingdom General Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 1010 "Reduced Disclosure Framework", and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group and Parent Company for that period. In preparing the financial statements, the directors are required to:
-- Select suitable accounting policies and then apply them consistently
-- State whether, for the Group and Parent Company, international accounting standards in conformity with the requirements of the Companies Act 2006 and, for the Group, international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101 have been followed for the Parent Company financial statements, subject to any material departures disclosed and explained in the financial statements
-- Make judgements and accounting estimates that are reasonable and prudent
-- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business
The directors are also responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Parent Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.
The directors are responsible for the maintenance and integrity of the Parent Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' confirmations
The directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group and Parent Company's position and performance, business model and strategy.
Each of the directors, whose names and functions are listed on pages 98 and 99, confirm that to the best of their knowledge:
-- the Group financial statements, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, additionally for the Group, international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group;
-- the Parent Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards comprising FRS 101, give a true and fair view of the assets, liabilities, financial position and profit of the Parent Company and
-- the Strategic Report includes a fair review of the development and performance of the business and the position of the Group and Parent Company, together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board
Lord Wolfson of Aspley Amanda James Guise Group Finance Director Chief Executive
1 April 2021
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April 20, 2021 06:24 ET (10:24 GMT)
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