Companies roundup: Next and Saba vs investment trusts

Next (NXT) reported another strong Christmas trading period, comfortably outperforming its own expectations and the rest of the high street.

The clothing retailer reported a 6 per cent increase in sales for the nine weeks to 28 December, although this was “slightly flattered” by the timing of its end-of-season sale. Full price sales were up 5.7 per cent, against company guidance of 3.5 per cent and a broader high street decline in non-food sales of 1.1 per cent during the so-called ‘golden quarter’’. 

The company nudged up guidance for its current financial year ending this month, with earnings per share to reach 635.4p – a 9.8 per cent year-on-year increase.

A more cautious forecast for next year tempered investor enthusiasm, though, meaning the shares rose by just 2 per cent. Next expects growth in the UK to slow “as employer tax increases, and their potential impact on prices and employment, begin to filter through the economy. It is forecasting pre-tax profit of 3.6 per cent, only slightly ahead of a 3.2 per cent increase in group sales. MF

Read more: Where to find bargains and growth among struggling retailers

Investment trusts line up votes on Saba plans

Shareholders in the investment trusts targeted by Saba Capital will get to vote on the activist investor's proposals in the coming weeks.

Herald (HRI) will put Saba's proposals to a vote on 22 January, while Baillie Gifford US Growth (USA) and Keystone Positive Change (KPC) will do so on 3 February. CQS Natural Resources Growth & Income (CYN) will hold a vote on the following day. The other trusts, Edinburgh Worldwide (EWI), and European Smaller Companies (ESCT), were yet to set a date at the time of writing but have previously promised to unveil details in due course.

All the trusts have expressed strenuous opposition to Saba's proposals to oust the boards and then enact measures ranging from share buybacks to trust mergers.

The tussle has already produced some fireworks, with plenty of mudslinging between Saba and the trusts’ boards over issues such as past performance. DB

Read more: How to pick the right investment trusts

House prices hold up

House prices dipped by 0.2 per cent in December but still finished the year 3.3 per cent higher than in 2023, according to the Halifax house price index.

The average house prices reached £297,166 in December, almost £10,000 higher than in the previous year. Prices in Northern Ireland rose fastest by 7.4 per cent, while in Wales they grew by 4.6 per cent and in Scotland by 2.4 per cent. The North West was the fastest-growing English region at 5.3 per cent and prices in London rose along with the national average.

House prices have grown as mortgage rates have eased and incomes have grown, but affordability remains a challenge, said Halifax’s head of mortgages, Amanda Bryden. Providing the job market holds up, she expects “modest house price growth this year”. MF

Read more: What UK house prices will do in 2025