Newspaper article The Evening Standard (London, England)

Cold Provides Layer of Comfort for Next

Newspaper article The Evening Standard (London, England)

Cold Provides Layer of Comfort for Next

Article excerpt


FREEZING weather conditions are providing something of a lifeline to sales of Britain's biggest clothing retailers.

Next helped lead blue-chip companies higher for the second consecutive day with the shares now trading at around 1500p. That compares with a low of 1297p in October when the group warned about difficult trading conditions.

A bear squeeze in the shares and the latest survey from the British Retail Consortium, showing a rise of almost 1% in like-for-like sales during November, are behind the move.

The rise in retail sales at the start of the run-up to Christmas, came as a welcome surprise to City observers, many of whom had been forecasting another downturn.

Meanwhile, broker Credit Suisse First Boston has repeated its outperform rating on Next and 1600p target. Directors of Next and some of its executives have placed a bet with bookies that could net them several million pounds if the share price touches 2400p within the next year or so.

CSFB says Next's discipline of selling clothes at full price until the January clearance sales has finally been rewarded with a cold snap which should have boosted sales of outdoor wear. That ought to also help increase full-price sales and reduce the volume of stock left in the storeroom.

As a result, the broker has been tempted to raise its pre-tax profit forecast for the current year by [pounds sterling]8 million to [pounds sterling]400 million.

There was heavy turnover in Biofuels, the company that makes bio diesel fuel from rape seed, as the price struggled to hold above 100p.

The company said on Monday it had received a bid approach, which turned out to be from D1 Oils.

The approach came just days after Biofuels secured long-term debt facilities from its bank, Barclays. Biofuels came to market last year and has traded as high as 302p on prospects for its new plant on Teesside.

Forth Ports, Edinburgh-based owner of eight commercial ports - including Tilbury on the Thames - built up a full head of steam, fuelled by talk of a bid from a private-equity company. Forth is effectively the last of the independent port operators and speculators are talking about an offer of around 1900p a share, worth [pounds sterling]855 million. …

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