Next declares special dividend

DividendMax Ltd.

Next declares special dividend


At the beginning of the year we set out our intention to return surplus cash to shareholders through special dividends or share buybacks. Throughout the year our share price has consistently traded above the Company's internal share buyback price limit, so surplus cash has been returned to shareholders through four special dividends amounting to £2.30 per share in total.

For the full year ending January 2016, we expect underlying surplus operational cash flow (after capital expenditure, interest, tax, and ordinary dividends) to be £377m. This excludes £15m from the 53rd week, £8m proceeds from the disposal of Cotton Traders and £214m funding for the exceptional increase in Directory debt. Year end net debt is therefore forecast to be around £670m. A simplified cash flow forecast for the current year is set out in the table below:

Year end net debt January 2015


- £515m

Surplus cash from operations (e)



Cash flow 53rd week and from disposal of Cotton Traders (e)



Special dividends

- £341m


Funding for exceptional Directory debt (e)

- £214m


Forecast net debt January 2016 (e)


- £670m

Looking to the year ahead, we expect the Company to continue to be strongly cash generative, with surplus cash from operations in the order of £370m. Since declaring our last special dividend, we have not bought any shares for cancellation. The Board has therefore decided to declare a further special dividend of 60p per share, which represents approximately one quarter of the surplus cash we expect to generate in the year ending January 2017. This will be paid on 1 February 2016 to shareholders on the register at 15 January, with an ex-dividend date of 14 January.

Our share price limit for share buybacks going forward is maintained at £69.62.  This is based on the lower end of our profit guidance for the year ahead and an investment hurdle of 8% Equivalent Rate of Return.

We are scheduled to announce our results for the full year on Thursday 24 March 2016.

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