Newspaper article The Evening Standard (London, England)

Next out of Fashion on Growth Worries

Newspaper article The Evening Standard (London, England)

Next out of Fashion on Growth Worries

Article excerpt

Byline: SARAH MARKS

MARKET REPORT HIGH STREET favourite Next took a hammering today as concern was aired over growth prospects. The shares plunged 41p to 1626p after a major broker said the fashion chain may have to choose between lower-return growth in the UK and riskier expansion abroad.

Although Next has outperformed the FTSE All-share index by 10% in the past three months, analysts at ING warned that the next 12 months could prove very challenging.

In a note to clients, the broker demoted the group to hold from buy. It said Next has generated very high returns from opening new shops, but future new-store opportunities would become less attractive.

ING is not the only broker to turn negative on the stock. Also bucking the generally positive vibe is Numis Securities, which earlier this month advised clients to sell.

Better-than-expected profits for a handful of heavyweights helped pushed the FTSE 100 up 24.6 points to 5860.6.

Media conglomerate WPP topped the blue-chip winners, rising 31p to 650p after a 36% increase in full-year profits.

Capita, up 19p at 474p, enjoyed a second day of steep rises thanks to a substantial upgrade to buy from neutral by UBS. Its analysts have raised their earnings forecast for this year by 6% and for next year by 4% to justify the re-rating.

National Grid's $42a-share bid for US utility KeySpan fired up interest in the energy sector, with bid favourite Centrica 5p higher at 2903/4p. Even if Russia's Gazprom doesn't make a move, the chances are increasing that someone else will. Scottish and Southern Energy, tipped to merge with Scottish Power, was 11p higher at 1146p while ScotPower was off 11/2p at 588p.

Cairn Energy was in huge demand after reports in the Indian press that Oil & Natural Gas Corp of India, its stateowned partner in the Rajasthan oilfield, is poised to make a bid.

Rumours of ONGC's interest powered a 77p rise in the stock yesterday.

Today Cairn was 16p higher at 1973p, with traders noting heavy buying by hedge funds.

Ladbrokes slipped 51/2p to 371p as it finally emerged from the Hilton canopy to start trading under its own name following the completion of the hotels sale. …

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