annual report and accounts
january 2013 04
next is a uk based 
retailer offering 
exciting beautifully 
designed excellent 
quality clothing 
footwear 
accessories and 
home products
next distributes through three 
main channels next retail a 
chain of more than 500 stores in 
the uk and eire next directory 
a home shopping catalogue 
with over 3 million active 
customers and websites serving 
around 60 countries and next 
international with almost 200 
mainly franchised stores around 
the world
consolidated accounts
55 consolidated income 
statement
56 consolidated statement 
of comprehensive 
income
57 consolidated balance 
sheet
58 consolidated statement 
of changes in equity
59 consolidated cash flow 
statement
60 accounting policies
64 notes to the 
consolidated financial 
statements
parent company accounts
91 company balance sheet
92 company statement of 
changes in equity
92 company cash flow 
statement
93 notes to the parent 
company financial 
statements
additional information
95 half year and sector 
analysis
95 five year history
96 notice of meeting
102 other information
business reports
01 highlights
02 chairman’s statement
03 directors’ report and 
business review
04 chief executive’s review
16 key performance 
indicators
17 risks  uncertainties
19 employees
19 social  environmental 
matters
21 annual general meeting  
 other matters
governance
26 directors’ responsibility 
statement
27 directors and officers
28 corporate governance
33 remuneration report
54 independent auditor’s 
report
this document contains forward looking statements 
— please see the important information on page 103 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
01
highlights
 sales up 31 to over £35bn and 
underlying profit growth of 9 to 
£622m
 strong net cash inflow of £324m before 
share buybacks
 £241m returned to shareholders 
through share buybacks contributing 
to underlying eps of 2977p up  
166
 full year dividend up 167 to 105p 
remains covered 28 times
the year ahead will remain 
challenging but we will continue with 
our strategy of investing in the brand 
and improving our products
jan 13 £3548m
jan 12 £3441m
jan 11 £3298m
jan 10 £3261m
jan 09 £3110m
revenue
underlying continuing 
business
31
jan 13 £622m
jan 12 £570m
jan 11 £543m
jan 10 £499m
jan 09 £424m
profit before tax
underlying continuing 
business
90
jan 13 2977p
jan 12
jan 11
jan 10
jan 09
2554p
2219p
1885p
1560p
earnings per share
underlying
166
jan 13 105p
jan 12
jan 11
jan 10
jan 09
90p
78p
66p
55p
dividend per share
total for the year
167 annual report and accounts january 2013
02
chairman’s statement
the year to january 2013 was another good year for next  underlying earnings per share before exceptional gains 
grew by 166 to 2977p and we propose to increase our full year dividend to 105p  this is the fourth consecutive 
year that our earnings per share and dividend have grown by over 15 at a time when the uk economy has 
continued to struggle for growth
next directory our online and catalogue business continued to grow and its sales increased by 95  the growth 
differential between next directory and next retail where sales were level narrowed  the two businesses continue 
to work well together and support each other in many ways  for example over 20 of directory sales are delivered 
through our stores and over 60 of the returns come back that way  both businesses increased their operating 
margins during the year and the group’s underlying profit before tax rose by 90 to £622m
cash flow was particularly strong helped by the timing of capital expenditure and stock intake at the year end  
we continued with share buybacks buying 75 million shares at an average price of £3213  during the year we 
returned £390m to shareholders through share buybacks and dividends
our share price again performed well during 2012 in both absolute and relative terms  over the last two financial 
years the share price has risen by over 100
as ever our success is built on the stability and effectiveness of our management across the group  they 
performed well in challenging economic conditions  i would like to thank them and all the next employees for 
their outstanding contribution during the year
we anticipate another challenging year ahead with little if any growth in the uk retail economy  in these 
circumstances we again aim to achieve growth by investing in the brand improving our products controlling costs 
and returning cash to our shareholders
john barton
chairman additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
03
directors’ report and business review
the directors present their annual report and audited accounts for the financial year ended 26 january 2013
principal activities and business model
next is a predominantly uk based multichannel retailer offering exciting beautifully designed excellent quality 
clothing footwear accessories and home products  the group is primarily comprised of
 ❚ next retail a chain of more than 500 stores in the uk and eire
 ❚ next directory a home shopping catalogue and website with over 3 million active customers and international 
websites serving approximately 60 countries
 ❚ next international retail with almost 200 mainly franchised stores around the world
 ❚ next sourcing which designs sources and buys next branded products
 ❚ lipsy which designs and sells its own branded younger women’s fashion products
a review of the group’s businesses is set out in the chief executive’s review and in the sections headed business 
strategies  objectives key performance indicators risks  uncertainties employees and social  environmental 
matters
business strategies  objectives
the primary financial objective of the group is the delivery of sustainable long term growth in earnings per share 
“eps” a key driver of shareholder value  underlying eps increased by 166 from last year and over the last 
ten years both eps and share price have increased by more than 300  this long term value has been created 
through the consistent pursuit of the following strategies
 ❚ improving and developing next product ranges success in which is measured by sales performance
 ❚ profitably increasing retail selling space  new store appraisals must meet demanding financial criteria before 
the investment is made and success is measured by achieved sales and profit contribution against appraised 
targets  the store portfolio is actively managed with openings and closures based on store profitability and 
cash payback
 ❚ increasing the number of next directory customers and their spend both in the uk and through international 
online sales
 ❚ managing gross and net margins through efficient product sourcing stock management and cost control
 ❚ maintaining the group’s financial strength through an efficient balance sheet and secure financing structure
 ❚ generating cash to increase dividends and purchase next shares when it is earnings enhancing and in the 
interests of shareholders generally annual report and accounts january 2013
04
directors’ report and business review
chief executive’s review
overview
next has had a good year achieving 31 growth in sales and 90 growth in underlying profit before tax  strong 
cash generation allowed us to buy back 45 of shares outstanding which along with a lower tax rate resulted in 
eps growing much faster than profits  
in the year to january 2013 posttax eps grew by 166  our full year dividend has been increased in line with eps 
to 105p
revenue excluding vat
underlying business excluding exceptionals
january
2013
£m
january
2012
£m
next retail 21909 21914 00
next directory 11926 10887 95
next brand 33835 32801 32
other 1643 1610 20
continuing business 35478 34411 31
profit and eps
underlying business excluding exceptionals
january
2013
£m
january
2012
£m
next retail 3311 3237 23
next directory 3021 2626 151
other 170 124
operating profit – underlying 6502 5987 86
net interest 286 284
profit before tax – underlying 6216 5703 90
taxation 1485 1429
profit after tax – underlying 4731 4274 107
eps – underlying 2977p 2554p 166
dividends per share 1050p 900p 167
next plc economics
five straightforward profit drivers
the table below sets out the five main drivers of the group’s profit and loss account  it shows how the profit from 
1 new retail space and 2 online sales more than offset the profit lost as a result of 3 declining sales in the 
existing store base  it also shows how 4 cost inflation has been more than offset by 5 cost savings
profit year ending jan 2012 £570m
profit from sales increasesdecreases
1 profit from new space 27m
2 profit from additional online sales growth 40m
3 cost of lost sales in existing stores  29m
38m 7
cost increases and savings 
4 inflation in cost base  50m
5 cost savings 64m
14m 2
profit year ending jan 2013 £622m 9 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
05
five straightforward objectives
the company has five core operational objectives as set out below  underlying these operational goals is the 
ever present and overriding financial objective of delivering long term sustainable growth in earnings per share
develop the next 
brand
develop improve and expand our product ranges focusing on being better by design
rigorously control 
costs
control costs through constantly developing more efficient ways of operating  this must be 
done without detracting from the quality of our products and services  
invest in profitable 
new space
open profitable new retail space maintaining the company’s strict payback and 
profitability hurdles of 15 net store profit before central overheads and payback on net 
capital invested in 24 months  
invest in online 
growth
invest in growth from our online business through improving uk services and new overseas 
markets  
generate and return 
cash 
focus on cash generation  return funds that are not needed to develop the business 
to shareholders through share buybacks  this must be earnings enhancing and in the 
interests of shareholders generally  
product and the next brand
without great product all our other activities are in vain  we believe there is the opportunity to further improve and 
expand our product ranges particularly at the more aspirational end of our collections
next has always maintained that if we are to succeed our products must be better by design  additional time and 
money has been invested in the design process for autumn winter 2013  we hope to see continuing improvements 
in the fashion content and quality of our ranges as the year progresses
  
 
 
201112
£570m
201213
£622m
directory
£40m new space
£27m
cost savings
£64m
cost increases
£50m
retail lfls
£29m
490 500 510 520 530 540 550 560 570 580 590 600 610 620 630 annual report and accounts january 2013
06
directors’ report and business review
cost inflation and cost control
we are very clear that we must not compromise service or quality to save money nor should we stop taking on 
new costs that improve our service offer  so we must control costs through operational innovation and improved 
purchasing  the tables below outline the main contributors to cost increases and cost savings over the last year
cost increases £m
cost of living awards and other wage related inflation 17
costs of directory delivery service improvements 15
rent rates  other occupancy inflation 7
retail instore design online overseas and additional brochure 6
systems investments and other 5
total 50
cost savings £m
gross margin improvements 22
retail manpower efficiencies and other cost savings 19
directory operating efficiencies 10
lower freight costs 3
nonstock purchasing improvements eg  paper 3
other 7
total 64
looking at the year ahead we expect cost inflation to be less challenging at around £35m  once again we 
believe that we can offset all these increased costs through saving initiatives
retail
retail sales were level with last year  new space added 32 to retail sales and 21 to total brand sales  retail 
profit of £331m was 23 higher than last year representing a 03 improvement in the retail net margin
retail space
retail expansion in 201213
during the year we added 250000 square feet to our store portfolio  this was less than the 300000 we had 
budgeted at the start of the year  the shortfall was because it has taken longer than expected to get planning 
permission for new projects and because a fire delayed one of our new large sites
the table below sets out the change in store numbers and space since january 2012
store 
numbers
sq ft 
000’s
january 2012  536 6475
new stores resites 6 and extensions 9 5 196
closures  6  28
home standalones 5 85
january 2013 540 6728 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
07
healthy returns on capital and high profitability
new store profitability and payback on net capital invested are both comfortably within company targets  forecasts 
for stores opened in the last 12 months shown in the table below are based on sales since their dates of opening
sales 
vs target
forecast 
profitability
forecast 
payback
mainline 9 24 17 months
home 5 19 22 months
total 8 23 19 months
space expansion in the year ahead
there continue to be good opportunities to profitably increase uk retail selling space  our expansion programme 
is built bottomup on a location by location basis and there remain many towns and cities where we believe there 
is the potential to offer wider ranges in larger stores  
planning remains a problem though often more of a delay than a brick wall  we are actively working with planning 
officers councillors and local communities to deliver new shops investment and jobs  we continue to make a 
greater investment in the external architecture of our new stores particularly on retail parks  our aim is to transform 
the quality of construction associated with outoftown retail and create the sort of buildings that communities will 
see as an asset not an eyesore
in our dealing with local councils it is noticeable that some are much more progrowth and projobs than others  
many local councils are enthusiastic and efficient but a few remain an unhealthy mix of luddite intransigence 
and incompetence  going forward in areas where councils traditionally have got away with just saying “no” we 
will be more active in harnessing the law and the full weight of public opinion to campaign for growth
next year we expect to add at least 250000 sq ft of trading space net of closures  
store portfolio profitability
we continue to closely monitor the profitability of our store portfolio  underperforming stores are actively managed 
with a view to possible closure before they become uneconomic  on average our store leases have 7 years to run 
before expiry or a break clause  
our portfolio remains extremely profitable with 89 of our sales coming from stores delivering more than 15 profit 
contribution on sales
store 
profitability
percentage 
of turnover
20 71
15 89
10 95
5 99
0 994
over the last five years the steady process of opening new space and refitting existing stores has transformed our 
portfolio  of the 67 million square feet of trading space we have today 37 million 54 is in stores that are either 
brand new or enlarged  of the remaining 3 million square feet 22 million has been refitted leaving just 800000 
13 square feet of the portfolio unchanged from 2007 annual report and accounts january 2013
08
directors’ report and business review
retail profit analysis
operating margin improved slightly on last year  the table below details the margin movement by the major 
heads of costs
net operating margin last year 148
increase in boughtin 
gross margin
the improvement in boughtin gross margin was driven by an improved usd 
exchange rate  this improvement was partly offset by selling a higher 
proportion of home and childrenswear these product categories have a 
lower gross margin than the average
03
reduction in freight 
and faulty
the cost of freight fell and in addition we used less unplanned air freight  
faulty stock rates also reduced
03
increase in store 
payroll
the annual costofliving pay award and staff bonus would have pushed 
wage costs up by 05 however this cost was almost completely offset by 
instore efficiency initiatives
 01
increase in store 
occupancy
rents and rates increased as a percentage of sales mainly as a result of 
negative like for like sales  rental inflation was minimal and continued to 
decline  business rates inflation which is linked to september rpi was very 
high at 56  
electricity costs also increased significantly in the first half
 04
warehouse and 
distribution
the annual costofliving pay award was offset by cost saving initiatives 00
central overheads central overheads reduced as a percentage of sales 02
net operating margin this year 151
directory
next directory sales were up 95 and profit increased by 151
uk service
next directory continues to provide good opportunities for growth  in the uk growth is driven by the wider online 
market and by improving delivery services  last year we added sameday evening sunday and nextday to store 
delivery services all at a £299 premium to the standard service
in 2013 we have already improved our delivery services further
 ❚ the cut off for standard next day delivery to home has been moved back to 10pm  
 ❚ nextday delivery to stores has been improved to allow collection after 1230pm as opposed to 400pm and 
the price of this service has been reduced from £299 to 50p  
international online
international sales grew from £33m to £54m  we now sell direct to 60 international territories and also through 6 
partners in 14 of those countries  our international online business contributed £10m to profit  in the year ahead 
we expect our overseas online business to grow to at least £70m adding a further £4m to profit additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
09
sales analysis
the increase in sales came from four main sources which are set out in the table below
contribution to growth
uk full price sales 52
clearance tab 22
markdown sales 01
international online 20
total sales growth 95
customer analysis
directory active average customers increased year on year by 103 to 33 million  customer growth is set out 
below broken down into credit and cash customers
average customers ‘000s
january
2013
january
2012 change
increase in 
customer 
base
total credit customers 2663 2557 106 35
total cash customers 641 438 203 68
total active customers 3304 2995 309 103
directory profit analysis
operating margin increased by 12 to 253  the table below details the margin movement by the major heads 
of costs
net operating margin last year 241
increase in boughtin 
gross margin
the improvement in boughtin gross margin was driven by an improved usd 
exchange rate  in addition directory sold a higher proportion of womens 
and menswear these product categories have a higher gross margin than 
the average
 10
reduction in freight the cost of freight fell and in addition we used less unplanned air freight  02
higher markdown  
obsolescence
directory took more drop stock from retail for its clearance tab  the 
additional obsolescence charge on this stock was the main cause for this 
adverse movement in margin
 04
decrease in bad debt 
 increased service 
charge
the continued improvement in bad debt rates increased margin by 03  
service charge growth increased margin by a further 02  
 05
decrease in marketing the improvement is mainly due to nonrecurring costs incurred last year for 
the development of our new website software
 03
decrease in call 
centre
call centre costs increased margin through improved processes including 
automatic credit scheduling 02 and a reduction in call volumes  
length 01
 03
decrease in 
catalogue production
photography costs reduced improving margin by 03  more customers 
elected to trade without a catalogue this reduced print costs as a 
percentage of sales
 05
increase in warehouse 
and distribution
international distribution costs to service our growing overseas business 
eroded margin by 05  we added new processes in our warehouses to 
enhance our delivery offer this eroded margin by a further 08
 13
central overheads overhead costs increased at a lower rate than sales  01
net operating margin this year 253 annual report and accounts january 2013
10
directors’ report and business review
international retail
we have a profitable franchise business with partners operating 170 stores in 33 countries  our 19 directly owned 
stores in 7 countries made a small loss  we do not intend to open any new directly owned international stores 
going forward  revenue and income for our international business is set out below
£m 2013 2012
franchise income 615 587
owned store sales 162 176
total revenue 777 763 18
operating profit 84 79 62
we are budgeting for international retail to make a profit of £10m in the year ahead the improvement coming 
mainly from the closure of loss making stores
next sourcing
next sourcing profit recovered from the previous year when a significant provision was required against unshipped 
faulty stock  that issue has been resolved and £1m of excess provision has been released this year  next sourcing 
competes for business against the many other suppliers to next retail and next directory it provides around 40 
of next brand stock
£m 2013 2012
sales  5071 5190
operating profit 308 211
operating margin 61 41
we are forecasting next sourcing profits to be around £30m in the year ahead
other profit and loss activities
£m 2013 2012
lipsy 20 13
property management 35 56
central costs 353 306
pension variation 36 67
unrealised foreign exchange 34 11
associates 06 15
total 222 166
lipsy
the full year sales of £58m and profit of £4m before amortisation and profit share of £2m was the best performance 
under the four years of our ownership  internet sales through lipsy’s own site and the next directory doubled to 
£17m and are now ahead of wholesale sales  lipsy’s retail sales were £22m taken from 51 stores trading 60000 sq  ft
property management
underlying profit was down by £2m to £35m  we now own very few retail freeholds  at the end of the year we 
sold a development property occupied by ventura a business we divested in 2011 the £9m profit is shown as 
exceptional  we do not anticipate any property management profit in the year ahead   additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
11
central costs
the charge has increased by £5m mainly due to performancerelated pay and company wide sharebased 
incentives  we expect central costs to decrease by £1m in the year ahead
pension scheme
the actuarial pension credit fell from £7m to £4m  we expect this credit to be around £3m in the coming year  
during the year we made changes to our final salary pension scheme which has been closed to new entrants 
since 2000  this change gave a credit adjustment which was partially offset by the cost of hedging out a tranche 
of pension liabilities  the net effect of these two changes was an exceptional posttax credit of £28m
interest and taxation
the interest charge was £28m  for the year ahead we expect net debt to range between £400m and £600m 
resulting in a similar interest charge
our tax rate reduced as expected to 239 following the reduction in headline uk corporation tax rates  on the 
assumption that tax rates continue to reduce as announced we expect our effective rate to be no higher than 
23 in each of the next two years
balance sheet
the balance sheet remains strong with year end net debt of £493m and forecast peak borrowing requirements 
being very adequately financed by our bonds and bank facilities of £923m as set out in the table below
 
£m
2013 bonds – repayment due september 85
2016 bonds 213
2021 bonds 325
total bonds nominal value 623
2016 committed bank facility 300
total debt facilities available 923
we believe next will generate around £250m of cash in the year ahead after capital expenditure interest tax and 
dividends but before share buybacks
cash generation net debt and share buybacks
stronger than expected cash flow 
cash generation was significantly ahead of our expectations  operational cash flow before buybacks and before 
additional cover in the esot was £376m  this was a long way ahead of our original £240m forecast the variance 
has been driven by higher profits lower capital expenditure and year end stock levels higher directory customer 
payments and a number of other one off factors
during the year we used surplus cash to buy 75 million shares 45 of shares outstanding as at jan 2012 at an 
average price of £3213 and a cost of £241m  in addition we used £52m to increase the share option cover in our 
employee share ownership trust this had the effect of reducing net shares in issue by a further 07 annual report and accounts january 2013
12
directors’ report and business review
buybacks eps and share price
despite their increasing popularity share buybacks are still widely misunderstood  there are still those who wrongly 
believe that they are some sort of share support scheme  this of course would be futile as any attempt to support 
a share price would evaporate as soon as the money ran out
the only reason share buybacks can deliver long term value is because they permanently reduce the number 
of shares in issue and so increase the amount of profit attributable to each share eps  an important part of the 
logic of share buybacks is the implied link between growth in eps and growth in share price  whilst in the short 
term there might appear to be no link in the long run share prices tend to reflect the fundamental value of the 
earnings and dividend stream  if the share price did not rise with eps the buyback programme would eventually 
leave a single share owning all the profits and dividends
the graph below illustrates the long term correlation of share price to eps for next plc over the period we have 
been buying back shares  the blue boxes indicate earnings per share and the black line shows the share price  
the boxes at the top of the chart show the historic priceearnings pe ratio
1999 00 01 02 03 04 05 06 07 08 09 10 11 2012
■ pe ratio
■ eps
■ share price
earnings per share and share price history
39p
46p
58p
69p
94p
£120
£127
£146
£169
£156
£188
£222
£255
£298
£40
£35
£30
£25
£20
£15
£10
£5
the long game – the next plc rules of buybacks
over the long term we have been following these rules when considering buybacks
1  share buybacks must be earnings enhancing and make a healthy equivalent rate of return see below
2  only use the cash the business does not need  next has always prioritised investment in the business over 
share buybacks
3  use surplus cash flow not everincreasing amounts of debt  we have never allowed our share buyback 
programme to threaten our investment grade credit status and will not do so going forward
4  maintain the dividend at a reasonable level through growing dividends in line with eps  next will continue to 
increase dividends in line with eps
5  be consistent  next has been buying shares every year for more than 10 years reducing the shares in issue by 
more than 50
6  for share buybacks to be an effective use of shareholder cash the core business must have the prospect of 
long term growth
127 167 163 111 138 132 133 133 82 70 104 90 103 134 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
13
effect on buybacks of a rising share price 
the graph above demonstrates that the relationship between our eps and share price has recently returned to its 
near historical average  it is important to recognise that this relative rise in the pe ratio reduces the benefit of share 
buybacks  the more expensive the shares become the smaller the share of the business can be bought with the 
same amount of surplus cash  
for example two years ago when our share price was £21 our operational free cash flow of £200m enabled us 
to buy 52 of the company  today with the shares around £40 our expected surplus cash flow of £250m will only 
buy 39
the overall effect is simple as the pe ratio rises the earnings enhancement of buybacks falls  so given our current 
pe ratio how should next assess the desirability of share buybacks 
essentially there are two measures we look at  the first is the earnings enhancement of a buyback when compared 
to the enhancement to earnings from keeping the cash in the bank and earning interest  the second is the 
comparison between the earnings enhancement of a buyback compared to the return that would have to be 
achieved from investing the cash in an alternative investment the equivalent rate of return err
with long term borrowing rates for next at around 4 a share buyback of £250m at £40 would be 25 earnings 
enhancing  the problem with this method of assessing buybacks is that at low interest rates buybacks remain 
earnings enhancing beyond £60 so we consider the equivalent rate of return measure to be more helpful
equivalent rate of return err
the tables below set out the maths used to calculate err  the top table shows the enhancement achieved from 
acquiring £250m of shares at £40 which is 4  the second table shows that if we were to increase our profits by 4 
we would have to invest in an asset yielding 10  given that share buybacks carry no additional operational risk 
the returns at 10 remain very attractive
 
enhancement £250m buyback pre interest costs 
share price £4000
market capitalisation £6400m
cash used for buyback £250m
 acquired 2506400 39
eps enhancement 11–39 41
calculating err
company profits £622m
additional profit required for 4 growth in eps £253m
additional profit as a percentage of £250m invested in buyback err 101
these workings are shown as an explanation of equivalent rate of return  of course a simpler way of calculating 
err is to divide profit before tax into market capitalisation annual report and accounts january 2013
14
the graph below shows how err falls as the share price rises  as the yield approaches the market’s expected 
return on equity say 8 the buyback becomes less attractive  if the returns dropped much below 9 we would 
become less enthusiastic so to a certain extent the share price provides a natural moderator of a disciplined 
buyback programme
103
100
98
95
93
90
88
85
83
80
78
75
£40 £41 £42 £43 £44 £45 £46 £47 £48 £49 £50
share price £
equivalent rate of return 
equivalent rate of return 
84
87
89
94
92
96
86
outlook for 2013
the consumer economy
the consumer environment looks set to remain subdued  the inevitable deleveraging of public and private 
finances means that the nation must slowly work its way back to affording the lifestyle it was already enjoying 
before the financial crisis  
this process of retrenchment is manifesting itself in earnings growth running below the rate of inflation  this decline 
in real earnings looks set to continue for at least one if not several more years to come  indeed the outlook for 2013 
inflation has worsened since this time last year  
the graph below shows the difference in cpi and wages  the black dotted line is the bank of england central 
inflation forecast as at january 2013 the grey dotted lines are the equivalent estimates in january and november 
2012  estimates for inflation steadily rose last year leaving the outlook for real earnings as difficult as 2012 if 
not slightly worse  so we are planning on there being very little if any improvement in the underlying consumer 
economy
directors’ report and business review
5
4
3
2
1
0
 2010 2011 2012 2013 2014
cpi
wages
cpi estimate boe
jan 12
nov 12
jan 13
source ons feb 13 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
15
outlook for next brand sales 2013
in this environment we will continue to budget for our existing stores to take moderately less than the previous year  
any growth in sales must come from investment in profitable new space and the continuing growth in the online 
market both in the uk and overseas  in the year ahead we expect these avenues of growth to continue to exceed 
underlying declines  
we are budgeting for total next brand sales for the full year to rise within a range of 1 to 4
the first few weeks of the year have been quiet and serve to reinforce a more cautious approach  at present 
sales are at the bottom of our target range though we expect this situation to improve  we will get a better 
understanding of the underlying consumer environment once temperatures return to seasonal levels  we will issue 
further guidance with our may trading statement
outlook for group profits and eps
assuming sales fall within our budgeted range we expect group profits before tax for the full year to be in a 
range of £615m to £665m which would represent a year on year movement of between 1 to 7  assuming we 
achieve our buyback plan eps would rise by between 4 and 13  the table below sets out our guidance for 
the full year
lower 
end of 
guidance
upper 
end of 
guidance
total brand sales  growth e 1 4
profit before tax e £615m £665m
profit before tax  growth e 1 7
eps  growth e 4 13
outlook for retail selling price inflation 2013 and beyond
overall factory gate prices are stable  any increases in far eastern wages have generally been offset by 
manufacturing productivity improvements or the development of new far eastern sources of supply in particular 
bangladesh and cambodia
the recent sharp fall in the value of sterling will have very little impact on this year’s pricing as we have bought 
forward most of our foreign currency requirement for the current year  if the pound remains at its current rate of 
exchange against the dollar we would expect our prices to rise in 2014
interim management statement
our next statement will cover the first fourteen weeks of the year to 4 may 2013 and is provisionally scheduled for 
wednesday 8 may 2013
in summary
next has performed well in a difficult year delivering good growth in sales and profits along with exceptional 
advances in earnings per share and dividends  the year ahead looks no less challenging but the group is well 
prepared and has further opportunities for growth  we remain strongly cash generative and have every chance 
of delivering another year of increased sales and earnings per share
lord wolfson of aspley guise
chief executive
21 march 2013 annual report and accounts january 2013
16
key performance indicators
kpi’s of earnings per share group cash flows and divisional revenues and profits are detailed in the chief executive’s 
review and elsewhere in this annual report  details of other key performance indicators used in the management 
of the business are provided below
next retail selling space 2013 2012 annual change
store numbers 540 536 07
square feet 000’s 6728 6475 39
selling space is defined as the trading floor area of a store which excludes stockroom and administration areas  
2013 2012
next retail stores and sales no  stores lfl  no  stores lfl 
total like for like 530 38 512 63
underlying 473 32 432 57
next defines like for like stores as those that have traded for at least one full year and have not benefited from significant capital expenditure  sales from these stores for the 
current year are then compared with the same period in the previous year to calculate like for like sales figures  underlying like for like sales applies the same calculation 
but excludes stores impacted by new store openings
next retail operating margin 2013 2012
net operating margin last year 148 148
increase in achieved gross margin 06 07
increasedecrease in store payroll 01 03
increase in store occupancy 04 04
decreaseincrease in other costs 02 06
net operating margin this year 151 148
gross margin is the difference between the cost of stock and the initial selling price achieved gross margin is after markdown and stock related costs  net operating margin 
is profit after deducting markdowns and all direct and indirect trading costs  all are expressed as a percentage of achieved vat exclusive sales
next directory customers and pages 2013 2012 annual change
average active customers 3304000 2995000 103
average sales per customer £361 £363 06
number of printed pages 4204 4180 06
active customers are defined as cash and credit customers who have placed an order or made a payment in the last 20 weeks calculated as a weighted average of each 
week’s figure  average sales per customer are calculated as vat exclusive sales including service charge divided by the average number of active customers  
next directory operating margin 2013 2012
net operating margin last year 241 237
increase in achieved gross margin 08 08
decrease in bad debt 03 04
increasedecrease in service charge income 02 09
increasedecrease in other costs 01 01
net operating margin this year 253 241
share buybacks 2013 2012
number of shares purchased ‘000 7510 12482
 of opening share capital 45 69
total cost £2413m £2897m
average cost per share £3213 £2321
total cost of shares purchased includes stamp duty and associated costs
directors’ report and business review additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
17
risks  uncertainties
the board has a policy of continuous identification and review of key business risks and oversees the development of 
processes to ensure that these risks are managed appropriately  executive directors and operational management 
are delegated with the task of implementing these processes and reporting to the board on their outcomes  the key 
risks identified by the board are summarised below
 ❚ business strategy development  implementation 
if the board adopts the wrong business strategy or does not implement its strategies effectively the business may 
suffer  the board needs to understand and properly manage strategic risk in order to deliver long term growth 
for the benefit of next’s stakeholders  the board reviews business strategy on a regular basis to determine how 
sales and profit budgets can be achieved or bettered and business operations made more efficient  this process 
involves the setting of annual budgets and longer term financial objectives to identify ways in which to increase 
shareholder value  critical to these processes are the consideration of wider economic and industry specific 
trends that affect the group’s businesses the competitive position of its product offer and the financial structure 
of the group  
 ❚ liquidity  credit risk 
the group has adequate medium and long term financing in place to support its business operations  the board 
continues to assess its exposure to counterparty risk in the light of the prevailing economic climate both in the 
uk and globally and its treasury policy is amended as necessary to manage counterparties with which deposits 
investments and other transactions may be made  
next is exposed to credit risk in respect of its directory and other business customers  rigorous procedures are 
in place with regard to the group’s credit customers and these are regularly reviewed and updated as required  
key suppliers whose services are essential to the successful running of the business also face credit risk  these 
include the production of the directory provision of it systems and certain systems and suppliers to the group’s 
warehouse and distribution network  the group’s risk assessment procedures for key suppliers identify alternatives 
and develop contingency plans in the event any of these suppliers fail
 ❚ management team 
the success of next relies on the continued service of its senior management and technical personnel and on its 
ability to continue to attract motivate and retain highly qualified employees  the retail sector is very competitive and 
next staff are frequently targeted by other companies  the remuneration committee identifies senior personnel 
reviews remuneration at least annually and formulates packages to retain and motivate these employees  in 
addition the board considers the development of senior managers to ensure adequate career development 
opportunities for key personnel with orderly succession and promotion to important management positions  
 ❚ product design  selection 
the success of next depends on providing exciting beautifully designed excellent quality clothing and homeware  
success also depends upon its ability to anticipate and respond to changing consumer preferences and trends  
many of next’s products represent discretionary purchases and demand for these products can decline in periods 
of negative consumer confidence  as a consequence next may be faced with surplus stocks that cannot be sold 
at full price and have to be disposed of at a loss  executive directors and senior management continually review 
the design and selection of next’s product ranges  this ensures so far as possible that there is a wellbalanced 
product mix that is good value for money and available in sufficient quantities and at the right time to meet 
customer demand
 ❚ key suppliers  supply chain management 
next relies on its supplier base to deliver products on time and to the quality standards it specifies  it continually 
seeks ways to develop its supplier base so as to reduce overreliance on individual suppliers of product and 
services and to improve the competitiveness of its product offer  if input costs rise for example raw materials or 
labour costs next will work with existing suppliers to mitigate the inflationary impact  new sources of supply will be 
developed in conjunction with next sourcing external agents and direct suppliers  
noncompliance by suppliers with the next code of practice may increase reputational risk  next carries out 
regular inspections of its suppliers’ operations to ensure compliance with the standards set out in this code 
covering production methods employee working conditions quality control and inspection processes  next also 
monitors and reviews the financial political and geographical aspects of its supplier base to identify any factors 
that may affect the continuity or quality of supply of its products   annual report and accounts january 2013
18
risks  uncertainties continued
 ❚ retail store network 
growth of next retail is dependent upon developing the trading space within its store network and customers 
spending more  next will continue to invest in new stores where its financial criteria are met and refurbish its 
existing portfolio when appropriate  new store appraisals estimate the effects of sales deflection from existing 
stores although the performance of new stores and sales deflection may differ from estimates
successful development of new stores is dependent upon a number of factors including the identification of suitable 
properties obtaining planning permissions and the negotiation of acceptable lease terms  notwithstanding there 
have been a number of retail failures in recent years prime sites will generally remain in demand and increased 
competition can result in higher future rents  
 ❚ directory customer base 
growth of the next directory depends upon the recruitment and retention of customers and increasing the 
average spend per customer  next will continue to recruit new credit customers where they satisfy its credit score 
requirements  however there can be no assurance that new customers will result in higher sales per customer or 
lower incidence of bad debts compared with the existing customer base
in addition next requires its internet website to attract new customers and encourage existing customers to 
continue ordering from the directory  management continually review the configuration content and functionality 
of the website to ensure it provides a positive customer shopping experience  service levels and response times 
are monitored to ensure that the website is both resilient and secure at all times
 ❚ warehousing  distribution 
next regularly reviews the warehousing and distribution operations that support the business  risks include 
business interruption due to physical damage access restrictions breakdowns capacity shortages inefficient 
processes and delivery service failures  planning processes are in place to ensure there is sufficient warehouse 
handling capacity for expected future business volumes over the short and longer terms  in addition service levels 
warehouse handling and delivery costs are monitored continuously to ensure goods are delivered to retail stores 
directory customers and third party clients in a timely and costefficient manner  
 ❚ it systems  business continuity 
next is dependent upon the continued availability and integrity of its it systems which must record and process 
a substantial volume of data and conduct inventory management accurately and quickly  the group expects 
that its systems will require continuous enhancement and investment to prevent obsolescence and maintain 
responsiveness  back up facilities and business continuity plans are in place and are tested regularly to ensure 
that business interruptions are minimised and data is protected from corruption or unauthorised access or use
 ❚ call centre capacity  service levels 
next is dependent on the efficient operation of its own and third party call centres to receive and respond to 
customer orders and enquiries  insufficient manpower supplier failures and interruption in the availability of 
telephony systems to meet customer service requirements are the principal risks  the group continuously monitors 
call centre operations that support the business to ensure that there is sufficient capacity to handle call volumes  
capacity forecasting is used to manage peak demands and growth in business volumes and customer satisfaction 
is measured on a regular basis  business continuity plans minimise the risk of business interruption  
 ❚ treasury  financial risk management 
the main financial risks are the availability of funds to meet business needs default by counterparties to financial 
transactions see liquidity  credit risk and fluctuations in interest and foreign exchange rates  in addition 
business expansion and share buybacks may necessitate the raising of additional finance which can in turn 
increase interest costs and give rise to fluctuations in profit  higher debt could also increase the proportion of 
cash flow required to service debt and potentially increase exposure to interest rate fluctuations  next operates a 
centralised treasury function which is responsible for managing its liquidity interest and foreign currency risks  the 
group’s treasury policy allows the use of derivative instruments provided they are not entered into for speculative 
purposes  further details of the group’s treasury operations are given in notes 27 to 30 of the financial statements
 
directors’ report and business review additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
19
in addition next has to fund its defined benefit pension scheme and ensure that sufficient contributions are made 
to meet outstanding liabilities as they fall due  if next fails to provide sufficient and timely funding action may be 
taken by the pension scheme trustees or the pensions regulator which could result in an acceleration andor 
an increase in overall contributions towards any deficit  management meets regularly with the trustees to assess 
fund performance as well as to agree future contribution levels and any necessary changes to members’ future 
benefits
employees
people are key to achieving business objectives  next has established policies for recruitment training and 
development of personnel and is committed to achieving excellence in the areas of health safety welfare and 
protection of employees and their working environment  
equal opportunities
next is an equal opportunities employer and will continue to ensure it offers career opportunities without 
discrimination  full consideration is given to applications for employment from disabled persons having regard to 
their particular aptitudes and abilities  the group has continued the employment wherever possible of any person 
who becomes disabled during their employment  opportunities for training career development and promotion 
do not operate to the detriment of disabled employees  
training and development
next aims to realise the potential of its employees by supporting their career progression and promotion wherever 
possible  it makes significant investment in the training and development of staff and in training and education 
programmes which contribute to the promotion prospects of employees  
employee communication
next has a policy of providing employees with financial and other information about the business and ensures 
that the suggestions and views of employees are taken into account  next has an employee forum made up of 
elected representatives from throughout the business who attend meetings at least twice a year with directors and 
senior managers  this forum enables and encourages open discussion on key business issues policies and the 
working environment
employee share ownership
approximately 8200 employees held options over 86 million shares in next at january 2013 being 53 of the total 
shares in issue  its employee share ownership trust “esot” purchases shares for issue to employees when their 
options are exercised  at the year end the esot held 65 million shares the voting rights of which are exercisable 
by the trustee
pension provision
the next group pension plan provides valuable pension benefits to participating employees details of which are 
set out in the remuneration report on pages 46 to 47 and in note 21 to the financial statements  at january 2013 
there were 1242 2012 1337 active members in the defined benefit section and 2375 2012 1935 members in 
the defined contribution section  the group has also made arrangements for autoenrolment and contributions 
commenced in february 2013
social  environmental matters
next is committed to the principles of responsible business  this means addressing key business related social 
ethical and environmental matters in a way that aims to bring value to all of its stakeholders including customers 
and shareholders  continuous improvement lies at the heart of next’s approach and is achieved by acting 
in an ethical manner developing positive relationships with suppliers recruiting and retaining successful and 
responsible employees taking responsibility for our impact on the environment and through contributions to 
charities and community organisations annual report and accounts january 2013
20
social  environmental matters continued
next has a corporate responsibility “cr” forum of 15 senior managers and directors representing key areas 
of the business to develop and implement strategy  the forum identifies potential issues and opportunities and 
evaluates the success of next’s response  the cr manager holds regular updates with the executive director 
responsible for cr
a third party provides independent assurance on the group’s cr report which is published on the company’s 
website each year  commitment to cr matters is recognised externally by its membership of the ftse4good  
index series
suppliers
next is a member of the ethical trading initiative and operates its code of practice “cop” an established set of 
ethical trading standards as an integral part of its operations  the next cop has ten key principles that stipulate 
the minimum standards with which suppliers are required to comply in relation to workers rights and conditions 
of work including working hours minimum age of employment health safety welfare and environmental issues  
next seeks to ensure all products bearing the next brand are produced in a clean and safe environment and in 
accordance with all relevant laws  
next is committed to its supplier audit and management programme and has a cop audit team of 44 staff 
2012 45  the cop team works directly with suppliers to identify and address causes of noncompliance  each 
audited factory is measured against the cop’s six tier rating system  the supplier is made aware of its rating and 
what is required to improve via a corrective action plan  this direct approach allows next to build knowledge and 
understanding in local communities and monitor suppliers through its auditing process
next’s supplier payment policy is to agree terms of payment at the start of business or to ensure that the supplier 
is aware of the group’s payment terms  payment is made in accordance with contractual and other legal 
obligations  trade creditor days of the next group at january 2013 were 27 days 2012 27 days based on the 
ratio of the trade creditors at the end of the year to the amounts paid during the year to trade creditors  the 
company had no trade creditors at january 2013 or january 2012
customers
next is committed to offering stylish excellent quality products to its customers which are well made functional 
safe and are sourced in a responsible manner  its team of technologists works closely with buyers designers and 
suppliers to ensure next products comply with all relevant legislation and its own internal standards where these 
are higher  the expertise of independent safety specialists for clothing footwear accessories beauty and home 
products is used where required
next endeavours to provide a high quality service to all customers whether they are shopping through its stores 
catalogues or website  these different ways of shopping must be easily accessible for all customers and be 
responsive to their needs
next customer services interacts with retail and directory customers to resolve enquiries and issues  findings are 
recorded and the information is used by other areas of the business to review how a product or service can be 
improved
health and safety
next recognises the importance of health and safety and its management is designed to contribute to business 
performance  policies and procedures are reviewed and audited regularly to make safety management more 
robust and current
the group’s objective is to manage all aspects of its business in a safe manner and take practical measures to 
ensure that its activities and products do not harm the public customers employees or contractors  procedures 
exist to enable two way communication and consultation about health safety and welfare issues in order to 
achieve a high level of safety awareness  
directors’ report and business review additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
21
environment 
next recognises that it has a responsibility to manage the impact of its business on the environment both now 
and in the future  for a number of years we have measured and reported against environmental targets for next 
in the uk and eire  the targets are measured from 2007 and look forward to 2015
key areas of focus are
 ❚ energy use and emissions from stores warehouses distribution centres and offices
target electricity consumption – 35 reduction in kg co
2
em
2
progress 4 reduction compared with last year and 30 electricity reduction achieved to date
 ❚ fuel emissions from the transportation of products
target retail distribution – 10 reduction in litres of fuel usedm
2
progress 8 reduction compared with last year and 16 reduction achieved to date
 ❚ waste created in stores warehouses distribution centres and offices
target to send less than 5 of operational waste to landfill
progress 86 of operational waste diverted from landfill achieved to date in line with last year
next is committed to reducing its carbon footprint by reducing energy consumption throughout its operations 
minimising and recycling waste cutting transport emissions and reducing the packaging in our products
community
next supports a wide range of charities and organisations and provided the following financial support during 
the year
2013
£000
2012
£000
registered charities 911 876
individual requests local and national groups and organisations 110 75
commercial support 83 73
this support was supplemented by the following additional activities
2013
£000
2012
£000
next charity events 182 –
gifts in kind  product donations 2187 1652
charity linked sales 357 425
employee fundraising 22 44
no donations were made for political purposes 2012 nil
annual general meeting  other matters
notice of the annual general meeting “agm” is on pages 96 to 101 and includes the following business
dividends
the directors recommend that a final dividend of 74p per share be paid on 1 august 2013 to shareholders on the 
register of members at close of business on 28 june 2013  the trustee of the next employee share ownership trust 
“esot” has waived dividends paid in the year on the shares held by it see note 26  
directors 
caroline goodall was appointed as a nonexecutive director with effect from 1 january 2013  caroline has  
30 years’ experience in the legal profession with 20 years as a corporate finance partner at herbert smith  caroline’ s 
appointment ensures an appropriate balance of skills experience and independence is maintained annual report and accounts january 2013
22
the uk corporate governance code provides for all directors of ftse companies to stand for election every year 
and all members of the board will do so at this year’s agm  their biographical details are set out on page 27
the board has formally reviewed the performance of all nonexecutive directors and concluded that they remain 
independent effective and are committed to their roles at next  in addition the board specifically considered 
the independence of jonathan dawson and christine cross who were first appointed to the board 9 years and 
8 years ago respectively and concluded that they remain independent in both character and judgement and 
their knowledge and other business interests continue to enable them to contribute significantly to the work and 
balance of the board  
the interests of the directors who held office at 26 january 2013 and their families are shown in the remuneration 
report on pages 48 and 50 to 52  
auditor
ernst  young llp have expressed their willingness to continue in office and their reappointment will be proposed 
at the agm  
disclosure of information to the auditor
in accordance with the provisions of section 418 of the companies act 2006 each of the persons who is a director 
at the date of approval of this report confirms that
 ❚ so far as the director is aware there is no relevant audit information of which the company’s auditor is unaware 
and
 ❚ each director has taken all the steps that they ought to have taken as a director to make themselves aware of 
any relevant audit information and to establish that the company’s auditor is aware of that information  
authority to allot shares
ordinary resolution 15 will if passed renew the directors’ authority pursuant to section 551 of the companies 
act 2006 to allot shares or grant rights to subscribe for or convert any security into shares until the conclusion of 
the agm in 2014 or if earlier 1 august 2014  this resolution will allow the directors to allot ordinary shares up to a 
maximum nominal amount of £5300000 representing approximately one third 3333 of the company’s existing 
issued share capital as at 19 march 2013  in accordance with the latest institutional guidelines resolution 15 will 
also allow directors to allot further ordinary shares in connection with a preemptive offer by way of a rights issue 
up to a total maximum nominal amount of £10600000 representing approximately two thirds 6667 of the 
company’s existing issued share capital as at that date  as at 19 march 2013 being the latest practicable date 
prior to publication of this document the company’s issued share capital amounted to £16123424 comprising 
161234237 ordinary shares of 10 pence each none of which are held in treasury  the directors have no present 
intention of exercising this authority  
authority to disapply preemption rights
special resolution 16 will if passed renew the directors’ authority pursuant to sections 570 to 573 of the companies 
act 2006 to allot equity securities for cash without first offering them to existing shareholders in proportion to 
their holdings  this resolution limits the aggregate nominal value of ordinary shares which may be issued by the 
directors on a non preemptive basis to £806000 being less than 5 of the issued ordinary share capital as at 
19 march 2013  this authority also allows the directors within the same aggregate limit to sell for cash shares 
that may be held by the company in treasury  the directors do not have any present intention of exercising this 
authority which will expire at the agm in 2014 or if earlier 1 august 2014  the directors do not intend to issue more 
than 75 of the issued share capital of the company for cash under this or previous authorities in any rolling three 
year period without prior consultation with shareholders and the investment committees of certain shareholder 
representative organisations
onmarket purchase of own shares
next has been returning capital to its shareholders by share repurchases as well as dividend since march 2000 
as part of its strategy for delivering sustainable long term growth in earnings per share  over this period and up 
to 19 march 2013 next has returned over £28bn to shareholders by way of share buybacks and almost £14bn in 
dividends  this buyback activity has enhanced earnings per share given shareholders the opportunity for capital 
directors’ report and business review additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
23
as well as revenue returns and has been transparent to the financial markets  share buybacks have not been 
made at the expense of investment in the business  over the last five years next has invested over £570m in 
capital expenditure to support and grow the business
special resolution 17 will renew the authority for the company to make market purchases as defined in section 
693 of the companies act 2006 of its ordinary shares of 10p each provided that
a the aggregate number of ordinary shares authorised to be purchased shall be the lesser of 24169000 ordinary 
shares of 10p each being less than 15 of the issued share capital at 19 march 2013 and no more than 
1499 of the issued ordinary share capital outstanding at the date of the agm such limits to be reduced by 
the number of any shares to be purchased pursuant to special resolution 18 offmarket purchases of own 
shares see below
b the payment per ordinary share is not less than 10p and not more than 105 of the average of the middle 
market price according to the daily official list of the london stock exchange for the five business days 
immediately preceding the date of purchase or if higher the amount stipulated by article 51 of the buy
back and stabilisation regulation 2003 and
c the renewed authority will expire at the agm in 2014 or if earlier 1 august 2014
the directors intend that this authority to purchase the company’s shares will only be exercised if doing so will 
result in an increase in earnings per share and being in the interests of shareholders generally it is considered to 
promote the success of the company  the directors will also give careful consideration to financial gearing levels 
of the company and its general financial position  the purchase price would be paid out of distributable profits  
it is the directors’ present intention to cancel any shares purchased under this authority  
the repurchase of ordinary shares would give rise to a stamp duty liability of the company at the rate of 05 of 
the consideration paid
the total number of employee share options to subscribe for shares outstanding at 19 march 2013 was 8468294  
this represents 53 of the issued share capital at that date  if the company were to buy back the maximum 
number of shares permitted pursuant to both the existing authority granted at the 2012 agm which will expire at 
the 2013 agm and the authority sought by this resolution then the total number of options to subscribe for shares 
outstanding at 19 march 2013 would represent 72 of the reduced issued share capital
offmarket purchases of own shares
the directors consider that share buybacks are an important means of returning value to shareholders and 
maximising sustainable long term growth in eps  contingent contracts for offmarket share purchases are an 
integral part of the company’s buyback strategy and offer a number of additional benefits compared to on
market share purchases
 ❚ contingent contracts allow the company to purchase shares at a discount to the market price prevailing at 
the date each contract is entered into  pursuant to the authority granted at the 2012 agm and up to 19 march 
2013 the company bought back 650190 shares for cancellation under such contracts at discounts of up to 
64
 ❚ low share liquidity can often prevent the company from purchasing sufficient numbers of shares on a single day 
without risk of affecting the prevailing market price  contingent contracts enable the company to purchase 
shares over time without risk of distorting the prevailing share price and also spreads the cash outflow
 ❚ contingent contracts entered into prior to any close period allow the company to purchase shares offmarket 
during these periods  clearance from the fsa for use of contingent contracts including for settlement in close 
periods has been obtained
 ❚ competitive tendering involving up to five banks is used which minimises the risk of hidden purchase costs  the 
pricing mechanism ensures the company retains the benefit of declared and forecast dividends
as with any share buyback decision the directors would use this authority only after careful consideration taking 
into account market conditions prevailing at the time other investment opportunities and the overall financial 
position of the company  the directors will only purchase shares using such contracts if  based on the contract  annual report and accounts january 2013
24
discounted price rather than any future price it is earnings enhancing and promotes the success of the company 
for the benefit of its shareholders generally  it is the directors’ present intention to cancel any shares purchased 
under this authority  
special resolution 18 will give the company authority to enter into contingent purchase contracts with any of 
goldman sachs international ubs ag deutsche bank ag hsbc bank plc and barclays bank plc under which 
shares may be purchased offmarket at a discount to the market price prevailing at the date each contract is 
entered into  the maximum which the company would be permitted to purchase pursuant to this authority would 
be the lower of 5000000 shares or a total cost of £200 million
the principal features of the contracts are set out in appendix 1 to the notice of the agm  copies of the agreements 
the company proposes to enter into with any of the banks the “programme agreements” will be available for 
inspection at the registered office of the company and at the offices of pinsent masons 30 crown place earl street 
london ec2a 4es during normal working hours from the date of the notice of the agm up to the date of the agm 
and at the meeting itself
notice of general meetings
the notice period required by the companies act 2006 for general meetings of the company is 21 days unless 
shareholders approve a shorter notice period which cannot however be less than 14 clear days  however the 
company’s agm must always be held on at least 21 clear days’ notice  at the agm of the company held in 2012 
shareholders authorised the calling of general meetings other than an agm on not less than 14 clear days’ notice 
and it is proposed that this authority be renewed  the authority granted by special resolution 19 if passed will be 
effective until the company’s agm in 2014  in order to be able to call a general meeting on less than 21 clear 
days’ notice the company will make electronic voting available to all shareholders for that meeting  the flexibility 
offered by this resolution will not be used as a matter of routine for such meetings but only where the directors 
consider it appropriate taking account of the business to be considered at the meeting and the interests of the 
company and its shareholders as a whole
recommendation
your directors are of the opinion that all resolutions which are to be proposed at the 2013 agm will promote the 
success of the company and are in the best interests of its shareholders as a whole and accordingly unanimously 
recommend that you vote in favour of the resolutions  
 
share capital and major shareholders
details of the company’s share capital are shown in note 23 to the financial statements
the company was authorised by its shareholders at the 2012 agm to purchase its own shares  during the year 
the company purchased 7509924 ordinary shares with a nominal value of £750992 of which 1825190 were 
purchased offmarket at a cost of £2413m representing 45 of its issued share capital at the start of the year  
these shares were cancelled
on 26 january 2013 the company had 161234237 shares in issue which remained the same as at 19 march 2013
the following information has been received from holders of notifiable interests in the company’s issued share 
capital 
notifications received up to 
26 january 2013
notifications received after 
26 january 2013 up to 19 march 2013
no  of 
voting 
rights
 of
voting
rights
nature 
of holding
no  of 
voting 
rights
 of
voting
rights
nature 
of holding
fmr llc fidelity 23068634 1414 indirect 
interest
–––
blackrock inc 22892356 1398 indirect 
interest
20918483 1297 indirect 
interest
schroders plc 8817239 479 indirect 
interest
–––
next plc employee share option trust 6881904 421 direct 
interest
–––
at date of notification
directors’ report and business review additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
25
additional information
shareholder and voting rights
all members who hold ordinary shares are entitled to attend and vote at the agm  on a show of hands at a 
general meeting every member present in person and every duly appointed proxy shall have one vote and on a 
poll every member present in person or by proxy shall have one vote for every ordinary share held or represented  
it is intended that voting at the 2013 agm will be on a poll  the notice of meeting on pages 96 to 101 specifies 
deadlines for exercising voting rights
the company is not aware of any agreements between shareholders that may result in restrictions on the transfer 
of securities and voting rights  there are no restrictions on the transfer of ordinary shares in the company other 
than certain restrictions imposed by laws and regulations such as insider trading laws and market requirements 
relating to close periods and requirements of the listing rules whereby directors and certain employees of the 
company require board approval to deal in the company’s securities
the company’s articles of association may only be amended by a special resolution at a general meeting  
directors are elected or reelected by ordinary resolution at a general meeting the board may appoint a director 
but anyone so appointed must be elected by ordinary resolution at the next general meeting  directors retire 
and may offer themselves for reelection at a general meeting at least every three years  however in line with the 
provisions of the uk corporate governance code all directors will stand for election at the 2013 agm  
change of control
the company is not party to any significant agreements which take effect alter or terminate solely upon a change 
of control of the company following a takeover bid  however in the event of a change of control the company’s 
medium term borrowing facilities may be subject to early repayment if a majority of the lending banks give written 
notice to the company within 30 days of the change of control  in addition should a change of control cause a 
downgrading in the credit rating of the company’s 2013 2016 and 2021 corporate bonds to subinvestment grade 
which is not rectified within 120 days after the change in control holders of the bonds have the option to call for 
redemption of the bonds by the company at their nominal value together with accrued interest  this option is only 
applicable to a downgrade which occurs as a direct consequence of a change in control
the company’s share option plans and its long term incentive and share matching plans contain provisions 
regarding a change of control  outstanding options and awards may vest on a change of control subject to the 
satisfaction of any relevant performance conditions
directors’ service contracts are terminable by the company on giving one year’s notice  there are no agreements 
between the company and its directors or employees providing for additional compensation for loss of office or 
employment whether through resignation redundancy or otherwise that occurs because of a takeover bid  
corporate governance
the corporate governance statement as required by the uk financial services authority’s disclosure and 
transparency rules dtr 726 comprises the additional information section of the directors’ report and the 
corporate governance statement included in this annual report
by order of the board
andrew mckinlay
secretary
21 march 2013 annual report and accounts january 2013
26
directors’ responsibility statement
directors’ responsibilities
the directors are responsible for preparing the annual report and the group financial statements in accordance 
with applicable united kingdom law and those international financial reporting standards as adopted by the 
european union
under company law the directors must not approve the group financial statements unless they are satisfied that 
they present fairly the financial position financial performance and cash flows of the company and the group for 
that period  in preparing those financial statements the directors are required to
 ❚ select suitable accounting policies in accordance with ias8 accounting policies changes in accounting 
estimates and errors and then apply them consistently
 ❚ present information including accounting policies in a manner that provides relevant reliable comparable 
and understandable information
 ❚ provide additional disclosures when compliance with the specific requirements of ifrs is insufficient to enable 
users to understand the impact of particular transactions other events and conditions on the group’s financial 
position and performance and
 ❚ state that the company and the group have complied with ifrs subject to any material departures disclosed 
and explained in the financial statements
the directors confirm that the financial statements comply with the above requirements
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain 
the group’s transactions and which disclose with reasonable accuracy at any time the financial position of the 
company and of the group and enable them to ensure that the financial statements comply with the companies 
act 2006 and article 4 of the ias regulation  they are also responsible for safeguarding the assets of the group 
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities
responsibility statement 
we confirm that to the best of our knowledge
a the financial statements prepared in accordance with international financial reporting standards as 
adopted for use in the european union give a true and fair view of the assets liabilities financial position and 
results of the company and the group and 
b the management report incorporated into the directors’ report includes a fair review of the development and 
performance of the business and the position of the company and the group together with a description of 
the principal risks and uncertainties that they face
on behalf of the board
lord wolfson of aspley guise
chief executive
21 march 2013
david keens
group finance director additional information parent company accounts
annual report and accounts january 2013
27
consolidated accounts governance business reports
directors and officers
chairman of the board 
john barton
aged 68  became a member of the board in 2002 and was 
appointed deputy chairman in 2004 and chairman in 2006 
he is also chairman of catlin group limited and previously 
served as chief executive of jib group plc chairman of cable 
and wireless worldwide plc jardine lloyd thompson group 
plc wellington underwriting plc and brit insurance holdings 
plc and as a nonexecutive director of wh smith plc and 
hammerson plc
executive directors
lord wolfson of aspley guise chief executive 
aged 45  joined the group in 1991 appointed retail sales 
director in 1993 became responsible for next directory in 
1995 and was appointed to the board in 1997 with additional 
responsibilities for systems  appointed managing director of the 
next brand in 1999 and chief executive in 2001
christos angelides group product director
aged 49  joined the group in 1986 christos has a wealth of 
experience in the product area starting at next as a trainee 
menswear buyer and became general manager of next’s 
sourcing office in hong kong in 1989 menswear product 
director in 1994 and womenswear product director in 1998 
he was appointed to the board in 2000 and has overall 
responsibility for all aspects of the design buying quality and 
merchandising of next products
david keens group finance director
aged 59  joined next in 1986 as group treasurer and was 
appointed to the board in 1991 previous experience includes seven 
years in the accountancy profession and nine years in the uk and 
overseas operations of multinational manufacturers of consumer 
goods with roles including group treasurer and finance director 
professional qualifications include the association of chartered 
certified accountants and the association of corporate treasurers
andrew varley group property director
aged 62  joined the group in 1985 and was appointed to 
the board in 1990 andrew’s responsibilities include property 
franchise corporate responsibility and code of practice related 
matters previous experience includes twelve years in retail and 
commercial property he is also a nonexecutive director of 
londonmetric property investments plc and is a fellow of the 
royal institute of chartered surveyors
company secretary
andrew mckinlay
independent nonexecutive directors
jonathan dawson
senior independent nonexecutive director
aged 61  became a member of the board in 2004 he is also 
a nonexecutive director of jardine lloyd thompson group plc 
and national grid plc and a partner in penfida partners llp 
previous experience includes nonexecutive directorships of 
national australia group europe ltd standard life investments 
holdings limited and gallifordtry plc eight years in the ministry 
of defence and over twenty years in investment banking  
with lazard 
steve barber
aged 61  became a member of the board in 2007 previous 
experience includes almost thirty years in the accountancy 
profession principally with price waterhouse where he was a 
senior partner formerly finance director of mirror group and 
chief operating officer of whitehead mann founder of the 
objectivity partnership and a member of the audit quality forum
christine cross
aged 61  became a member of the board in 2005 she is 
also a nonexecutive director of sonae group ltd portugal 
woolworths limited australia and kathmandu limited 
new zealand christine is also chief retail advisor to 
pricewaterhousecoopers and a retail advisor to apax partners 
and warburg pincus previous experience includes fourteen 
years as a director at tesco plc and fifteen years lecturing and 
course director roles at edinburgh and bath universities
francis salway
aged 55  joined the board in june 2010 he is also chairman 
of town  country housing group and a nonexecutive director 
of cadogan group limited formerly chief executive of land 
securities group plc and past president of the british property 
federation
caroline goodall
aged 57  became a member of the board in january 2013 
caroline has thirty years’ experience in the legal profession with 
twenty years as a corporate finance partner at herbert smith 
including five years as head of the global corporate division 
she is currently a nonexecutive director of svg capital plc and 
a nonexecutive on the partnership board of grant thornton  
uk llp and a trustee and member of the council of the  
national trust
board committees
audit committee
steve barber committee chairman caroline goodall
christine cross francis salway
jonathan dawson
remuneration committee
jonathan dawson committee chairman christine cross
steve barber caroline goodall
john barton francis salway
nomination committee 
john barton committee chairman jonathan dawson
steve barber caroline goodall
christine cross francis salway annual report and accounts january 2013
28
corporate governance
chairman’s introduction
effective corporate governance is essential to the success of our business
as chairman my role is to manage the board ensuring it operates effectively and contains the right balance of 
skills and experience to successfully execute the strategy  the board is collectively responsible for the long term 
success of the company and for setting and executing the strategy
over many years next has successfully grown its business and created significant shareholder value against the 
backdrop of a challenging external environment  this is the ultimate measure of our success and reflects our 
strong corporate governance structure and the stable effective management team we have in place  we remain 
committed to the robust approach to governance which has served the business well
code compliance
the group complied throughout the year under review with the provisions set out in the uk corporate governance 
code and the uk fsa disclosure and transparency rules  disclosures required by dtr726 with regard to share 
capital are presented in the ‘share capital and major shareholders’ and ‘additional information’ sections of the 
directors’ report
board composition and succession
the board includes five independent nonexecutive directors and the chairman who bring considerable knowledge 
judgement and experience to the group  the board has a good record of recruiting new nonexecutive directors 
at regular intervals to achieve appropriate rotation and continuity  the uk corporate governance code states 
that boards should pay particular attention to the independence of nonexecutives if they have served on the 
board for more than nine years from the date of their first election  jonathan dawson is the longest serving non
executive director having been first elected at the agm in 2005 following his appointment the previous year  the 
ninth anniversary of his first election is therefore may 2014 although he will have served as a director for nine years 
in may 2013  the board considers that all of its nonexecutive directors remain independent in character and 
judgement and their knowledge experience and other business interests continue to enable them to contribute 
significantly to the work of the board  terms and conditions of appointment of nonexecutive directors are available 
for inspection at the company’s registered office during normal business hours
appointments to the board as with other positions within the group are made on merit according to the balance 
of skills and experience offered by prospective candidates  whilst acknowledging the benefits of diversity individual 
appointments are made irrespective of personal characteristics such as race religion or gender  the board is 
comprised of eight male directors and two female directors  below the board at senior management level there 
are 13 male directors and 11 female directors  next has a successful history of promoting internal candidates to 
most senior management and executive board positions through career development it is expected that most 
future appointees will come from within the group  
the company’s articles of association require directors to submit themselves for reelection by shareholders at 
least once every three years however the board has determined that all directors will stand for election at each 
agm in accordance with the uk corporate governance code
board responsibilities
the board is responsible for major policy decisions whilst delegating more detailed matters to its committees 
and officers including the chief executive  the board is responsible for the group’s system of internal control and 
for monitoring implementation of its policies by the chief executive  the system of internal control is designed to 
manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable 
and not absolute assurance against material misstatement or loss additional information parent company accounts
annual report and accounts january 2013
29
consolidated accounts governance business reports
the board holds regular meetings where it approves major decisions including significant items of capital 
expenditure investments treasury and dividend policy  board papers including reports from the chief executive 
and finance property and product directors are circulated in advance of each board meeting  the board is 
responsible for approving semiannual group budgets  performance against budget is reported to the board 
monthly and any substantial variances are explained  forecasts for each half year are revised and reviewed 
monthly  certain other important matters are subject to weekly or monthly reporting to the board or board 
committee including sales treasury operations and capital expenditure  there is a regular flow of written and 
verbal information between all directors irrespective of the timing of meetings
all new directors receive a personalised induction programme tailored to their experience background and 
understanding of the group’s operations  individual training needs are reviewed regularly and training is provided 
where a need is identified or requested  all directors receive frequent updates on a variety of issues relevant to the 
group’s business including regulatory and governance issues
meetings of the nonexecutive directors without the executive directors being present are held at least annually 
both with and without the chairman  the company secretary attends all board meetings and is responsible for 
advising the board on corporate governance matters and facilitating the flow of information within the board
the board has appointed committees to carry out certain of its duties three of which are detailed below  each of 
these is chaired by a different director and has written terms of reference which are available for inspection on the 
company’s website wwwnextplccouk or on request  
attendance at meetings
the board held seven formal meetings during the year and these were fully attended with the exception of 
one meeting which mr angelides was unable to attend  the audit committee remuneration committee and 
nomination committee held four five and three meetings in the year respectively and all serving members 
attended with the exception of one remuneration committee meeting which ms goodall was unable to attend 
and one nomination committee meeting which mrs cross was unable to attend
audit committee and external audit
the committee consists of the five previously four independent nonexecutive directors including the senior non
executive director and at least one member steve barber the committee chairman with recent and relevant 
financial experience
the committee holds regular structured meetings and consults with external auditors and senior management 
including internal audit where appropriate  the chairman of the group executive directors and other members 
of senior management attend meetings by invitation or as required
the committee’s review of the interim and full year financial statements focused on the following significant areas
a directory receivables and related provisions for doubtful debts which at £601m represent the largest asset on 
the group’s balance sheet
b pension fund accounting and actuarial reports  prepared in accordance with international accounting 
standards the group’s balance sheet shows a pension asset of £66m and the income statement includes 
exceptional pension items of £36m as a result of events during the year  the assumptions underlying these 
calculations are highly sensitive to small changes particularly in respect of discount rates see note 21 to the 
accounts
c treasury transactions  the group buys currencies forward in order to hedge its future product purchases 
which in turn enables it to set its prices and margins  a number of different instruments are used to provide 
such cover and their valuation and accounting treatment is reviewed
d provisioning  there is a need to make industry specific and other judgmental provisions including against 
stocks rates of customer returns liabilities in respect of onerous leases gift card redemptions taxation and 
share schemes annual report and accounts january 2013
30
these items were also addressed at the planning stage of the external audit and there were no significant 
disagreements between management and the external auditor’s conclusions
the committee received reports and presentations from senior management on various activities of the group 
including international directory operations warehousing and distribution directory credit risk management 
treasury tax and corporate responsibility matters including the code of practice  the group’s internal control 
functions in areas such as finance it security and product are regularly reviewed by the committee  the 
committee receives frequent briefings on health and safety risk management business continuity whistle blowing 
and corporate governance generally  
the committee had discussions with the external auditor on audit planning fees accounting policies internal 
control and audit findings  meetings were also held with the auditor without management present and the 
effectiveness and independence of the auditor has been assessed
the audit committee is responsible for recommending the appointment reappointment and removal of the 
external auditor  consideration is given each year to putting the audit out to tender however it was not considered 
necessary during the current year  ernst  young has been the group’s auditor for over 20 years with regular 
partner rotation most recently in 2012  the committee is satisfied that they continue to possess the skills and 
experience required to fulfill their duties effectively and efficiently  the appointment of the external auditor will 
continue to be reviewed annually and a tendering process will be undertaken to coincide with the rotation of the 
current audit partner in 2017 or earlier if the committee considers it appropriate  
ernst  young have reported to the committee that in their professional judgement they are independent within 
the meaning of regulatory and professional requirements and the objectivity of the audit engagement partner 
and audit staff is not impaired  the audit committee has reviewed this statement and concurs with its conclusion
in order to ensure the continued independence and objectivity of the group’s external auditor the board has 
policies regarding the provision of nonaudit services by the auditor  the audit committee’s approval is required in 
advance for any nonaudit services to be provided where the fees exceed £100000 for an individual assignment 
or £150000 in aggregate for the year  the committee reviews details of audit and nonaudit fees twice a year  
proposed assignments of nonaudit services with anticipated fees in excess of £50000 are generally subject 
to independent tender and decisions on the allocation of work are made on the basis of competence cost
effectiveness and relevant legislation  a tender process is not always undertaken where the auditor’s existing 
knowledge of the group enables them to provide the required services more costeffectively than other parties 
for example certain overseas taxation compliance services  the group’s auditor is prohibited from providing any 
services that would conflict with their statutory responsibilities  
the committee has reviewed its terms of reference and composition and believes that both are appropriate
remuneration committee
the committee consists of the chairman and five independent nonexecutive directors  the committee which is 
chaired by the senior nonexecutive director determines the remuneration of the executive directors and reviews 
that of senior management  a remuneration report is included in this annual report which summarises the 
activities of the committee  
nomination committee
the committee consists of the chairman and five independent nonexecutive directors including the senior non
executive director  the committee meets whenever necessary to consider succession planning for directors and 
other senior executives to ensure that requisite skills and expertise are available to the board to address future 
challenges and opportunities  
external consultants have been used to assist in identifying suitable board candidates based on a written 
specification for each appointment  the chairman is responsible for providing a shortlist of candidates for 
consideration by the committee which then makes its recommendation for final approval by the board
corporate governance additional information parent company accounts
annual report and accounts january 2013
31
consolidated accounts governance business reports
chairman
there is a clear division of responsibilities between the offices of chairman and chief executive which is set out in 
writing and agreed by the board  the chairman manages the board to ensure that the group has appropriate 
objectives and an effective strategy that there is a chief executive with a team of executive directors able to 
implement the strategy that there are procedures in place to inform the board of performance against objectives 
and that the group is operating in accordance with a high standard of corporate governance
the current chairman was an independent nonexecutive director of the company prior to his appointment as 
chairman on 17 may 2006  his other significant commitments are noted on page 27 and the board considers that 
these are not a constraint on his agreed time commitment to the company
chief executive
the board sets objectives and annual targets for the chief executive to achieve  the board is responsible for general 
policy on how these objectives are achieved and delegates the implementation of that policy to the chief executive  
the chief executive is required to report at each board meeting all material matters affecting the group and  
its performance
management delegation
the chief executive has delegated authority for the day to day management of the business to operational 
management drawn from executive directors and other senior management who have responsibility for the 
respective areas  the most important management meetings are the weekly next brand trading and capital 
expenditure meetings which consider the performance and development of the next brand through its different 
distribution channels  these meetings cover risk management of all business areas in respect of the next brand 
including product sales property warehousing systems and personnel  key performance indicators are monitored 
daily and weekly  
directors’ conflicts of interest
in accordance with the company’s articles of association the board has a formal system in place for directors 
to declare situational conflicts to be considered for authorisation by those directors who have no interest in the 
matter being considered  in deciding whether to authorise a situational conflict the nonconflicted directors 
consider the situation in conjunction with their general duties under the companies act 2006  they may impose 
limits or conditions when giving an authorisation or subsequently if they think appropriate  any situational conflicts 
considered by the board and any authorisations given are recorded in the board minutes and in a register of 
conflicts which is reviewed annually by the board  
performance evaluation
the performance of the board was formally and independently evaluated during the year by pricewaterhouse 
coopers  the review concluded that there were no significant weaknesses or risks that required attention
the senior independent nonexecutive director appraises the performance of the chairman through discussions 
with all the directors individually and together with the chairman appraises the performance of the chief 
executive  the performance of the executive directors is monitored throughout the year by the chief executive 
and the chairman  the chairman also monitors the performance of the nonexecutive directors
risk management
the board is responsible for the group’s risk management process and has delegated responsibility for its 
implementation to the chief executive and senior management best qualified in each area of the business  
the board sets guidance on the general level of risk which is acceptable and has a considered approach to 
evaluating risk and reward
the board confirms that it has carried out a review of the effectiveness of the group’s system of internal control 
including financial operational compliance and risk management  this includes identifying and evaluating key 
risks determining control strategies and considering how they may impact on the achievement of the business 
objectives  the risk management process has been in place for the year under review and up to the date of 
approval of the annual report annual report and accounts january 2013
32
risk management and internal control is a continuous process and has been considered by the board on a 
regular basis during the year  the board promotes the development of a strong control culture within the business  
during the year the board addressed the business risks which had been identified as key taking into account any 
changes in circumstances over the period  the audit committee has reviewed the level of internal audit resource 
available within the group and believes that it is adequate for the size structure and business risks of the group 
and is supplemented with appropriate external resources where needed
the board considers that the group’s management structure and continuous monitoring of key performance 
indicators provide the ability to identify promptly any material areas of concern  business continuity plans 
procedures manuals and codes of conduct are maintained in respect of specific major risk areas and business 
processes  through these measures the management of business risk is an integral part of group policy and the 
board will continue to develop risk management and internal controls where necessary
the use of a group accounting manual and prescribed reporting requirements for finance teams throughout the 
group ensures that the group’s accounting policies are clearly established and consistently applied  information 
is appropriately reviewed and reconciled as part of the reporting process and the use of a standard reporting 
package by all entities in the group ensures that information is presented consistently to facilitate the production 
of the consolidated financial statements
personal use of company assets
the board carried out a review during the year and confirmed that there has been no improper personal use of 
company assets by directors  policies are in place to ensure approval procedures are applied to expense claims 
and that these are in accordance with service agreements  the remuneration committee has reviewed the level 
of benefits in kind provided to executive directors
relations with shareholders
the board’s primary role is to promote the success of the company and the interests of shareholders  the board is 
accountable to shareholders for the performance and activities of the group
the board communicates with its shareholders in respect of the group’ s business activities through its annual report 
yearly and half yearly announcements interim management statements and other regular trading statements  
full year interim and other public announcements are presented in a consistent format with a particular focus on 
making the presentations as meaningful understandable and comparable as possible  this information is also 
made publicly available via the company’s website  
all shareholders have an opportunity to ask questions or represent their views to the board at the annual general 
meeting  the company’s largest shareholders are invited to the annual and interim results presentations at 
which executive and nonexecutive directors are present  nonexecutive directors attend other meetings with 
shareholders if requested  shareholder views are also communicated to the board through the inclusion in board 
reports of shareholder feedback and statements made by representative associations
the board takes care not to disseminate information of a share price sensitive nature which is not available to the 
market as a whole
going concern
the group’s business activities together with the factors likely to affect its future development performance and 
position are set out in the directors’ report and business review  the directors’ report also describes the group’s 
financial position cash flows and borrowing facilities further information on which is detailed in the financial 
statements  information on the group’s financial management objectives and how derivative instruments are 
used to hedge its capital credit and liquidity risks is provided in notes 27 to 30 of the financial statements
the directors report that having reviewed current performance and forecasts they have a reasonable expectation 
that the group has adequate resources to continue its operations for the foreseeable future  for this reason they 
have continued to adopt the going concern basis in preparing the financial statements
corporate governance additional information parent company accounts
annual report and accounts january 2013
33
consolidated accounts governance business reports
remuneration report
this report sets out the remuneration of next’s directors for the year to january 2013 and is in three parts 1 
overview of the year 2 remuneration strategy and 3 regulatory disclosures under schedule 8 to the large and 
mediumsized companies and group accounts and reports regulations 2008 the uk listing rules and the 
uk corporate governance code  the board confirms that the company has complied with these regulations 
throughout the year  we have also included some of the new disclosures proposed by the department for business 
innovation  skills bis notably a table showing a single total figure for remuneration and a summary of the 
company’s remuneration policy in tabular format  
part 1 overview of the year 
information not subject to audit
company performance
next has again achieved record pretax profits and earnings per share eps  underlying pretax profits of £622m 
were 9 higher than last year and underlying eps of 298p were 166 higher  the key financial objective remains 
long term sustainable growth in eps  therefore eps is used to determine the executive directors’ annual bonus and 
the level of any entitlement under the share matching plan smp  the committee also assesses eps performance 
and other factors in evaluating whether the general economic underpin test for the company’s long term incentive 
plan ltip has been satisfied  the committee considers that this strong eps performance fully justifies the bonuses 
and long term incentives earned by the executive directors and other senior executives during the year  
annual bonus and base salaries
at the start of the year the committee set targets for eps growth details of which are shown on page 39  this 
year’s strong growth in eps resulted in annual bonus for executive directors of 99 of the maximum potential 
award  it should also be noted that like last year we excluded exceptional gains of £45m from this eps calculation  
2012 exceptional gains of £47m excluded  
base salaries for executive directors were increased by 20 in february 2013 having increased by 12 in 2011 
and 25 in 2012 in line with wider company cost of living awards  we consider that increases in base salaries 
should continue to be restrained given the potentially significant multiplier effect of such increases on future costs
ltip
under the ltip a variable percentage of a maximum number of shares granted at the start of each performance 
period can vest depending on next’s relative tsr performance against a comparator group of some 20 other 
uk retailers  the maximum number of shares that may be granted is a percentage of each director’s base salary 
divided by next’s average share price over the three months prior to the start of the performance period  details 
of grants and of the comparator group are set out on pages 44 and 45  
since 2008 next has made grants twice a year rather than annually and two awards matured in the year  over 
the performance periods of these grants ie  between august 2009 to january 2013 next’s share price rose from 
1705p to 4059p and market capitalisation grew from £34 billion to £65 billion a further £855m was returned 
through share buybacks and £449m paid in dividends  
the ltip that matured in july 2012 vested 96 when next’s tsr ranked fifth against the comparator group and 98 
of the january 2013 ltip is expected to vest as its tsr also ranked fifth against the comparator group  this vesting 
is subject to the committee’s review of the economic underpin performance condition in april
the value of these two ltips’s is high this is largely due to the rise in the company’s share price over the performance 
periods as there was no increase in the maximum number of shares originally granted  last year we decided that 
the maximum value of ltip’s vesting for any participant in any one year should be capped at £25m and the chief 
executive’s ltip payments last year were reduced by £704k  this year the £25m cap will again be applied and 
assuming the committee confirms the grant maturing in january 2013 has vested payments to lord wolfson and 
christos angelides will be reduced by an estimated £327k and £11k respectively
after applying this cap the total value to the executive directors of the two ltips is estimated at £75m of which 
approximately 51 or £38m is attributable to the growth in share price over the performance periods   annual report and accounts january 2013
34
smp
shareholders approved the smp in 2010  the purpose of the plan is to encourage ownership of next shares 
amongst executive directors and other senior executives and thereby further align their interests with shareholders  
for the 2010 grant which is due to vest in june 2013 some 25 senior executives were able to reinvest part or all of 
their annual bonus in next shares  subject to growth in fully diluted eps over three years participants are eligible 
to receive matching shares for every share bought  
fully diluted eps for 201213 was 2808p excluding exceptional gains  this compares with 1760p for 200910 
and represents growth of 60 over the three year period  as a result of this strong performance the 2010 smp 
will vest in full in june 2013 subject to the continued employment of participants  lord wolfson has waived his 
potential entitlement under this smp on the understanding that all next employees who have been employed 
since january 2010 will share an equivalent amount by way of a special bonus in july 2013 pro rata to their annual 
salary  the estimated value of the amount waived by lord wolfson based on the methodology proposed by bis 
is £24m  the estimated total pretax value for other executive directors is £46m of which £21m 46 derives from 
the growth in next’s share price since buying their smp shares
total performancerelated remuneration
the aggregate performancerelated remuneration of the executive directors has increased from £87m last year to 
approximately £99m see pages 49 and 50  this remuneration is directly linked to strong profits and eps growth 
which have been reflected in next’s increased share price and therefore the value of shares in the ltip   
the remuneration committee has carefully reviewed the level of performancerelated remuneration earned by 
the executive directors  the committee considers that it is a strong reflection of next’ s operating and financial 
performance over the past three years and that it is aligned with the financial interests of shareholders generally  
additional remuneration disclosures
the tables below give a single figure for total remuneration split between fixed and performancerelated elements 
for the current and previous years and are based on methodologies proposed by bis which differ from current 
regulations 
base pay performancerelated pay
201213
£’000 salary
fee benefits pension
1
salary 
supple
ment
2
sub
total
annual 
bonus ltip
3
share 
matching 
plan
4
share
save
sub
total
total 
remuner
ation
chairman
john barton 250 – – – 250 – – – – – 250
executive directors
lord wolfson 714 45 280 27 1066 1064 2500 – – 3564 4630
christos angelides 519 33 220 19 791 514 2398 1725 – 4637 5428
david keens 477 19 – 72 568 472 1352 1675 – 3499 4067
andrew v arley 355 27 – 53 435 351 1006 1204 – 2561 2996
nonexecutive 
directors
steve barber 60 – – – 60 – –– –– 60
christine cross 50 – – – 50 – –– –– 50
jonathan dawson 70 – – – 70 – –– –– 70
caroline goodall 4 – –– 4– – – – – 4
francis salway 50 – – – 50 – –– –– 50
2549 124 500 171 3344 2401 7256 4604 – 14261 17605
remuneration report additional information parent company accounts
annual report and accounts january 2013
35
consolidated accounts governance business reports
base pay performancerelated pay
201112
£’000 salary
fee benefits pension
1
salary 
supple
ment
2
sub
total
annual 
bonus ltip
3
share 
matching 
plan
4
share 
save
sub
total
total 
remuner
ation
chairman
john barton 250 – – – 250 – – – – – 250
executive directors
lord wolfson 697 36 120 – 853 753 2500 – – 3253 4106
christos angelides 506 30 60 – 596 364 1673 – 2 2039 2635
david keens 466 19 – 46 531 385 1602 – 1 1988 2519
andrew v arley 346 30 – 49 425 249 1193 – 2 1444 1869
nonexecutive 
directors
steve barber 60 – – – 60 – – – – – 60
christine cross 50 – – – 50 – – – – – 50
jonathan dawson 70 – – – 70 – – – – – 70
francis salway 50 – – – 50 – – – – – 50
2495 115 180 95 2885 1751 6968 – 5 8724 11609
measurement bases for elements of total remuneration
1
  pension values are calculated using the hmrc method proposed by bis ie 20 times the postinflation benefit for defined benefit pensions  it does not necessarily 
represent the economic value of the pension accrual and is not immediately available to the relevant director  the increase in pension values for lord wolfson and 
christos angelides over the two financial years is entirely due to the effect of inflation and not to any change in the underlying accrued annual preinflation benefit  where 
the accrued value is negative a value of zero is used
2
  supplements of 15 of base salary are paid in lieu of pension provision after the directors became deferred members of the defined benefit section of the next pension 
plan  andrew varley and david keens received this supplement from april and june 2011 respectively and lord wolfson and christos angelides from november 2012
3
  ltip values for 201213 comprise the actual value of awards that have vested and been paid for the performance period ending in july together with the estimated value 
of awards that will vest for the performance period ending in january based on the average next share price over the last financial quarter  for 201112 these are the 
actual value of the ltip awards
4
  smp values for 201213 assume a maximum vesting in june 2013 and are based on the average next share price over the last financial quarter  as detailed above lord 
wolfson has waived his potential entitlement to the june 2010 smp which will mature in june 2013
we continue to focus on the alignment of executive remuneration and long term growth in shareholder value  the 
graph below charts total annual remuneration of lord wolfson against tsr over the last 10 years and shows that 
tsr grew by 430 more than the chief executive’s remuneration or by 290 excluding the smp waiver  
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 
800
700
600
500
400
300
200
100
0
total remuneration total remuneration before smp waiver tsr
£18m
£20m
£19m £18m
£12m
£15m
£28m £30m
£41m
£46m
£70m
10 year ceo pay and next tsr annual report and accounts january 2013
36
other remuneration committee highlights
in addition during the year we determined the following
 ❚ eps growth targets for executive directors’ annual bonus for 201314 and review of consistency with bonus 
targets for other next staff
 ❚ additional eligibility criteria for participation in future smp investments whereby participants who sell their 
investment shares prior to or after a new smp is made will have restrictions placed on the level of investment 
they can make or the number of matching shares that can vest  
 ❚ introduction of a minimum next shareholding for all executive directors the chief executive is required to hold 
shares with a value at least 15 times pretax salary with other executive directors holding shares equal to their 
annual salary  all executive directors currently exceed these requirements  new executive directors would have 
up to 5 years to achieve the required holding  
 ❚ in line with changes to the defined benefits section of the next group pension plan set out on page 47 
the pension entitlements of lord wolfson and christos angelides under the unfunded unapproved pension 
arrangement have been amended to freeze the accrual of future benefits under the unfunded arrangement 
based on their base salaries at 31 october 2012  from that date lord wolfson and mr angelides have received 
an annual salary supplement of 15 of their base salary which does not attract bonus
the committee believes next’s remuneration strategy and the structures implementing that strategy have 
contributed positively to maintaining the stable and highly motivated management team at next who have 
continued to deliver consistently strong performances for shareholders  
part 2 remuneration strategy and policy
information not subject to audit
the committee’s objective is to ensure that the remuneration paid to senior executives is appropriate in both 
amount and structure is directly linked to the company’s annual and longer term performance and in alignment 
with the interests of shareholders  we believe that stable and transparent remuneration structures are key elements 
in a fair system for rewarding personal and collective contribution across the business  there are bonus structures 
throughout the company including head office stores call centres and warehouses  the focus is on ensuring 
that a competitive and appropriate base salary is paid to directors and senior managers together with incentive 
arrangements that are
 ❚ aligned with shareholders’ interests and with long term business strategies
 ❚ measured against challenging benchmarks including both absolute financial targets which are set in 
advance and relative share price performance
 ❚ a mix of annual and three year performance periods
 ❚ paid in a combination of cash and shares and
 ❚ transparent and without ‘soft’ nonfinancial targets which could otherwise allow undue discretion to award 
bonuses that do not reflect actual financial performance  
pay and employment conditions elsewhere in the group are considered to ensure that any differences for directors 
are justified  remuneration policy does not conflict with the company’s approach to environmental social and 
corporate governance matters and we believe the current arrangements do not encourage directors to take 
undue business risks
remuneration report additional information parent company accounts
annual report and accounts january 2013
37
consolidated accounts governance business reports
we aim to maintain a stable remuneration structure whereby directors and senior management know at the 
start of each year the potential rewards available to them and the performance thresholds without awarding 
significant increases in base salaries  over the past three years general salary levels for all grades across next 
including directors have risen by an annual average rate of 19  individual merit awards are only given after 
a careful assessment of personal performance  no executive director has received a merit or promotion award 
during the last three years  for the current year base salaries across next and for directors will rise by 20 which 
is again below the level of inflation  
we give careful consideration to ensuring that there is an appropriate balance in the remuneration structure 
between annual and long term rewards as well as between cash and sharebased payments  we recognise that 
corporate performance and share price performance may not be correlated in any single accounting period  
notwithstanding this we believe that the present weighting towards rewarding sustainable long term performance 
is well aligned with shareholders’ interests  this is evident from the high proportion of directors’ performancerelated 
pay in the year that derived from growth in eps and share price as opposed to increases in salaries or annual 
bonus
eps and performance measurement
the committee reviews each year the basis of annual bonus and performance thresholds for the smp   we have 
again concluded that eps remains the most appropriate measurement for the following reasons
 ❚ we have used eps as the determining measurement for many years it is therefore consistent and transparent 
to participants and shareholders  the committee will exercise discretion if required to adjust eps to reflect what 
it considers to be a fairer outcome for shareholders and executives  thus last year the committee decided to 
exclude from the calculation of eps the exceptional profit achieved on the sale of ventura and the proceeds of 
a refund of vat  this year we have excluded the exceptional profit on the sale of a development property and 
the accounting gain resulting from changes to the defined benefit pension scheme  
 ❚ next is predominantly a single business selling products through a number of channels under the next brand  
no significant earnings are derived from uncorrelated businesses and therefore a group metric such as eps is 
logical and consistent with strategy
 ❚ eps continues to be the core financial measure by which the board assesses overall performance and
 ❚ the use of eps in determining annual bonuses and the smp is complemented by the application of tsr for  
the ltip 
we consider it right that the impact of share buybacks on eps should be included in performance measurement 
as for more than a decade share buybacks have been one of next’s primary strategies in generating value 
for shareholders  share buybacks are regularly considered by the board and are subject to prior approval as 
to timing price and volume  shares are only bought after the board is satisfied that the ability to invest in the 
business and to continue to grow the dividend would not be prejudiced  consistent with the clear focus on long 
term growth in eps the board takes great care to manage the dilutive impact on shareholders of the various 
sharebased schemes available to directors and other employees  the company regularly purchases shares in 
the market and holds them in next’s employee share option trust esot for reissue to satisfy option exercises and 
other sharebased payments   annual report and accounts january 2013
38
remuneration policy table
the following table summarises the objectives and policies with regard to each of the elements of executive 
remuneration and the approach to payments on external recruitment and termination
remuneration report
element 
of pay purpose and link to strategy operation maximum potential value 
salary to provide a satisfactory base salary 
within a total package comprising 
salary and performancerelated pay  
performancerelated components 
and certain benefits are calculated 
by reference to base salary  the level 
of salary broadly reflects the value 
of the individual their role skills and 
experience  
reviewed annually effective 
february  the committee focuses 
particularly on ensuring that an 
appropriate base salary is paid to 
directors and senior managers  the 
committee considers salaries in the 
context of overall packages with 
reference to market data individual 
experience and performance 
and the level and structure of 
remuneration for other employees 
and the external environment  
external benchmarking analysis is 
occasionally undertaken
there is no guaranteed or maximum 
annual increase  the committee 
considers it important that base 
salary increases are kept under 
tight control given the potential 
multiplier effect of such increases 
on future costs  in the last 3 years 
salaries have been increased in 
line with the wider company cost of 
living awards  
annual 
bonus
to incentivise annual delivery of 
stretching financial goals  provides 
focus on the company’s key 
financial objective of sustainable 
growth in eps  
to provide a retention element in 
the case of the chief executive 
as any annual bonus in excess of 
100 of base salary is payable in 
shares deferred for a period of two 
years and subject to forfeiture if he 
voluntarily resigns prior to the end 
of that period
based on stretching pretax eps 
targets set annually taking account 
of a range of factors including the 
company’s own internal budgets 
and the wider background of the 
uk economy  pretax eps has been 
chosen as the basic metric to avoid 
executives benefitting from external 
factors such as reductions in the rate 
of corporation tax  the philosophy 
has been to structure targets such 
that there has to have been growth 
in eps before any annual bonus is 
payable to executive directors  by 
contrast we have set the threshold 
for staff bonuses at a lower level 
than for directors  we have the right 
to apply discretion in the interests of 
fairness to both shareholders and 
executives by adjusting the basis 
for calculating eps eg  to take 
account of any exceptional items
a maximum bonus of 150 of salary 
for the chief executive and 100 of 
salary for other executive directors
long term 
incentive 
plan ltip
to incentivise three year total 
shareholder return relative to a 
selected group of retail companies
provides focus on delivering 
superior returns to shareholders
retention of key employees over 
threeyear performance periods
a variable percentage of a pre
determined maximum number 
of shares can vest depending 
on relative total shareholder 
return tsr performance against 
a comparator group of retail 
companies shown on page 44
the maximum number of shares 
that may be awarded to each 
director is a percentage of each 
director’s base salary at the date 
of each award divided by next’s 
average share price over the three 
months prior to the start of the 
performance period
ltip awards are made twice a year 
to reduce the volatility inherent in 
the tsr performance measure and 
to enhance the portfolio effect for 
participants of more frequent but 
smaller ltip grants
the chief executive other executive 
directors and senior management 
receive grants equal to 100 
75 and 60 of annual salary 
respectively every six months
for christos angelides in recognition 
of the strategic importance of his 
product skills each of the four 
semiannual ltip awards with 
performance periods ending july 
2012 through to january 2014 were 
increased from 75 of salary to 
125
the maximum aggregate 
annual award allowed under 
the current plan rules is 200 of 
base salary 300 in exceptional 
circumstances  with effect from 
201112 the maximum value of 
any ltip awards that vest for a 
participant in a year has been 
capped at £25m additional information parent company accounts
annual report and accounts january 2013
39
consolidated accounts governance business reports
performance targets changes for 2012 and 2013
not applicable in line with the current policy base salaries of the executive 
directors increased by 20 in february 2013 in line with the 
wider company cost of living awards  
the base salaries for the executive directors with effect from 
february 2013 will be
 £’000
lord wolfson 729
christos angelides 529
david keens 487
andrew v arley 362
for the year to january 2013 performance targets were set 
requiring pretax eps of 3574p before any bonus became 
payable growth of 5 on the prior year  at this point bonus 
would be 30 of salary in the case of the chief executive 
and 20 of salary for other executive directors  a maximum 
bonus of 150 and 100 of salary for the chief executive and 
the other executive directors respectively was payable if pre
tax eps exceeded 3914p growth of 15  a straight sliding 
scale of payments operated for performance between the 
minimum and maximum levels  
for 201213 actual pretax eps achieved excluding £449m of 
exceptional gains was 3911p growth of 149  accordingly 
a bonus of 149 of salary for the chief executive and 99 of 
salary for the other executive directors was earned  
bonus performance targets for the year ahead have been set 
but are not disclosed in advance for reasons of commercial 
sensitivity  the targets and performance will be disclosed in 
next year’s remuneration report
performance is measured over periods of three years which 
commence in february and august by comparing tsr 
against some 20 other uk listed retail companies  
relative percentage 
performance vesting
below median 0
median 20
upper quintile 100
if no entitlement has been earned at the end of a three year 
performance period then that award will lapse there is no 
retesting
before any of the awards vest the remuneration committee 
must have regard to the performance of the company in light 
of underlying economic and other circumstances including 
eps performance of the company and of other uk retailers 
over the period  whilst not disclosed in advance the factors 
taken into account in determining the awards are disclosed 
in the relevant year’s remuneration report
the grant that matured in july 2012 vested 96 as the 
tsr ranked fifth out of 22 in the comparator group  the 
remuneration committee also assessed the performance of 
next during the performance period and determined that 
the economic underpin performance condition had been 
satisfied
the grant that matured in january 2013 is expected to vest at 
98 as the tsr ranked fifth  this vesting is subject to review of 
the economic underpin performance condition in april annual report and accounts january 2013
40
element 
of pay purpose and link to strategy operation maximum potential value 
share 
matching 
plan smp
to encourage greater ownership 
of next shares amongst the 
executive directors and other 
senior executives and thereby 
further align their interests with 
shareholders  
participants who invest a proportion 
of any annual cash bonus in 
next shares can receive up to a 
maximum of two times their original 
share investment calculated on 
a pretax basis  any matching is 
conditional upon achieving fully 
diluted eps growth targets for the 
following three years  the executive 
directors and around 20 other 
senior executives participate in the 
scheme  
having initiated the smp in 2010 
with a maximum matching ratio 
of two times the committee 
decided in 2012 to cap the level 
of investment for each participant 
and reduce the scale of potential 
matching from a maximum of 
two times to a maximum of one 
times the initial investment  the 
maximum matching award 
allowed under the plan rules is 
three times  this may be granted 
if considered appropriate but the 
committee would consult with 
major shareholders before doing 
so
pension to provide postretirement benefits 
or cash alternative
all executive directors are deferred 
members of the defined benefit 
section of the next group pension 
plan
since becoming deferred members 
of the defined benefit section of 
the plan lord wolfson and christos 
angelides have contributed to the 
unfunded unapproved pension 
arrangement  they ceased to 
contribute to this arrangement 
during 2012  andrew varley and 
david keens ceased to contribute 
to the plan in october 2008 and 
may 2011 respectively  their 
pensions are no longer linked to 
salary and will increase in line with 
statutory deferred revaluation
executive directors now receive 
salary supplements of 15 in 
lieu of pension provision  these 
supplements are less than the 
contributions the company would 
otherwise make to the defined 
benefit section of the plan
directors and some senior 
managers receive enhancements 
from the plan   increasing the 
accrual of their retirement 
benefit up to two thirds of their 
final pensionable earnings 
on completion of 20 years 
pensionable service at age 65  the 
lump sum payable on death is four 
times base salary
other 
benefits
to provide market competitive non
cash benefits
executive directors receive benefits 
which may include the provision of 
a company car or cash alternative 
private medical insurance 
subscriptions to professional bodies 
and staff discount on group 
merchandise
nonexecutive directors receive staff 
discount on group merchandise 
but do not participate in any of 
the group’s bonus pension share 
option or other incentive schemes
not applicable
share 
ownership 
guidelines
to align the interests of executive 
directors and shareholders
for the chief executive the 
minimum shareholding is 15 times 
his pretax salary and for other 
executive directors not less than 
equal to their salary
not applicable
recruitment 
awards
to enable the recruitment of key 
executives
any awards determined at the time 
of recruitment by the committee to 
reflect the individual circumstances
any recruitment awards may 
have reference to the value of any 
outstanding awards forgone by the 
potential recruit
remuneration report additional information parent company accounts
annual report and accounts january 2013
41
consolidated accounts governance business reports
performance targets changes for 2012 and 2013
vesting of the awards granted in 2012 is dependent on 
achieving the fully diluted posttax eps targets detailed on 
page 45
the amount of annual bonus that may be invested under the 
smp in 2013 is the lower of an individual’s posttax bonus and 
a maximum amount of between £100000 2012 £50000 
and £200000 2012 £125000  the matching award remains 
at a maximum of one times the initial investment
the minimum match of 025 of a share requires fully diluted 
eps growth of 12 and the maximum match of one times 
requires growth of 30 over the three year performance 
period
 
as noted on page 34 lord wolfson has waived his potential 
entitlement to the smp granted in 2010 and due to mature in 
june 2013
not applicable in line with changes to the defined benefits section of the 
next group pension plan the future pension entitlements 
of lord wolfson and christos angelides under the unfunded 
unapproved pension arrangement will be calculated by 
reference to their base salaries at 31 october 2012 rather 
than final earnings  from that date lord wolfson and mr 
angelides have received an annual salary supplement of 
15 of their base salary
not applicable not applicable
not applicable this requirement was introduced in 2012 although all 
executives have had significant shareholdings in excess 
of these minimums for many years  any newly appointed 
executive director has up to five years to acquire the minimum 
shareholding  
performance conditions would normally be based on next 
performance although any awards made to replace those 
forfeited as a result of joining next may in exceptional 
circumstances be made without performance conditions if 
necessary
no recruitment awards were made during the year annual report and accounts january 2013
42
element 
of pay purpose and link to strategy operation maximum potential value 
termination 
payments
in line with market practice to 
ensure next can recruit and 
retain key executives whilst 
protecting the company from 
making payments for failure
in practice the committee 
would consider the need 
for and quantum of any 
termination payments 
having regard to all of 
the relevant facts and 
circumstances at that 
time  
any future service 
contracts will take 
into account relevant 
published guidance
each of the executive directors has a rolling service 
contract which commenced on 14 march 2013 and 
which is terminable by the company on giving one 
year’s notice  the company has reserved the right 
to make a payment in lieu of notice on termination 
of an executive director’s contract equal to their 
base salary and contractual benefits excluding 
performancerelated pay  if notice of termination 
is given immediately following a change of control 
of the company the executive director may 
request immediate termination of his contract 
and payment of liquidated damages equal to the 
value of his base salary and contractual benefits
in normal circumstances executives have no 
entitlement in respect of loss of performance 
bonuses and all share awards would lapse following 
resignation  however under certain circumstances 
eg  ‘good leaver’ or change in control and 
solely at the committee’s discretion annual bonus 
payments may be made and would ordinarily be 
calculated up to the date of termination only  in 
addition awards made under the ltip and smp 
would generally be time prorated and remain 
subject to the application of the performance 
conditions at the normal measurement date  
in the event of any termination payment being 
made to a director including any performance
related pay elements the committee will take full 
account of that director’s duty to mitigate any loss 
and where appropriate the committee may seek 
independent professional advice and consider the 
views of shareholders as expressed in published 
guidance prior to authorising such payment
chairman 
and non
executive 
director fees
to ensure fees paid to the 
chairman and nonexecutive 
directors are competitive 
and comparable with other 
companies of equivalent size 
and complexity
additional fees are paid to 
nonexecutive directors who 
chair the remuneration and 
audit committees and the 
senior independent director
remuneration of the non
executive directors is 
determined by the chairman 
and the executive directors
the chairman is paid 
monthly and non
executive directors are 
paid quarterly
fee levels for non
executive directors are 
reviewed biannually
the chairman was paid a fee of £250000 per 
annum and the basic nonexecutive director 
fee was £50000 with a further £10000 paid to 
the chairmen of the audit and remuneration 
committees and to the senior independent 
director
clawback clawback provisions are to 
be included in the service 
contracts for all executive 
directors and will be enforced 
where appropriate to 
recover performancerelated 
remuneration which has been 
overpaid due to a material 
misstatement of the company’ s 
accounts errors made in the 
calculation of an award or a 
director’s misconduct
remuneration report additional information parent company accounts
annual report and accounts january 2013
43
consolidated accounts governance business reports
performance targets changes for 2012 and 2013
not applicable no compensation payments on termination of employment 
were made during the year
nonexecutive directors do not participate in bonus or share
based incentive arrangements
the fees payable to the chairman and nonexecutive 
directors increased in february 2013 as follows  the previous 
increase was in 2011
 £’000 increase
chairman 2550 2
base fee for nonexecutives 525 5
further fee payable to chairmen 105 5 
of audit and remuneration 
committees and to the sid annual report and accounts january 2013
44
part 3 additional regulatory disclosures
information not subject to audit
further details of each of the components of the directors’ remuneration are given in the report below
the remuneration committee
during the year the committee comprised the following independent nonexecutive directors
jonathan dawson committee chairman
steve barber
john barton
christine cross
francis salway
caroline goodall from january 2013
the committee met five times during the year under review and all meetings were fully attended with the exception 
of one which caroline goodall was unable to attend due to other commitments relating to her induction as a 
director of next  
role of remuneration committee
the committee determines the remuneration of the group’s chairman and executive directors and reviews that of 
senior executives  it is also responsible for determining the targets for performancerelated pay schemes approves 
any award of the company’s shares under share option or incentive schemes to employees and oversees any 
major changes in employee benefit structures  the committee members have no conflicts of interest arising from 
crossdirectorships and no director is permitted to be involved in any decisions as to his or her own remuneration  
the remuneration of nonexecutive directors is decided by the chairman and executive directors of the board  the 
committee’s terms of reference are available on the company’s website wwwnextplccouk or on request from 
the company secretary
assistance to the committee
during the period the committee received input from the chief executive and group finance director and retained 
the services of aon hewitt and fit remuneration consultants llp to provide independent external advice regarding 
executive remuneration  these advisors have no other connection with the company  pricewaterhousecoopers 
provided independent verification services of total shareholder returns for next and the comparator group of 
companies under the long term incentive plan ltip
additional information on board remuneration
ltip
the comparator group of companies for the three year performance periods to july 2012 and january 2013 was 
as follows
 
asos findel j sainsbury n brown 
burberry french connection kesa signet
carpetright halfords kingfisher tesco
carphone warehouse hmv marks  spencer wh smith
debenhams home retail group morrisons
dixons retail jjb sports mothercare
remuneration report additional information parent company accounts
annual report and accounts january 2013
45
consolidated accounts governance business reports
for subsequent performance periods the changes to the comparator group above are
1  periods ending july 2013 and january 2014  ted baker added and findel french connection and jjb sports 
removed
2  period ending july 2014  supergroup added and signet removed and
3  periods ending january 2015 and july 2015  dunelm group added and hmv removed
the comparator group consists of uk listed retail companies which are most comparable with next in size or 
nature of their business  comparison against such a group of companies is more likely to reflect the company’s 
relative performance against its peers thereby resulting in grants being made on an appropriate basis
details of potential awards granted for outstanding performance periods are as follows
maximum potential award granted 
 of base salary
performance periods commencing
lord 
wolfson
christos 
angelides
david 
keens  
andrew 
varley
other 
employees
august 2010 and february 2011 100 125 75 60
august 2011 february 2012 and august 2012 100 75 75 60
the committee has discretion as to whether entitlements earned are payable in next shares or cash and to date 
it has allowed participants the choice  entitlements earned are not pensionable and are based on salary and 
share price at the start of the performance period  no individuals included in the plan have received grants under 
the management share option scheme in the same year
share matching plan
vesting of awards is dependent solely on achieving the fully diluted posttax eps targets detailed below  
required fully diluted eps pence
date of grant for 051 match for 11 match for 21 match
june 2010 1915 2065 2215
april 2011 2313 2402 2581
for 0251 match for 051 match for 11 match
april 2012 2672 2815 3102
these targets require a minimum three year growth in eps of 88 2010 award and 12 2011 and 2012 awards 
before any shares vest and a maximum award is only achieved if eps growth reaches 258 25 and 30 
respectively over three years  the effective matching ratio will be calculated on a straight line basis for eps falling 
between each of the threshold points  details of the calculation of fully diluted eps are provided in note 9  the 
committee has reviewed the performance conditions of awards to be made in 2013 and for the period to january 
2016 the fully diluted eps hurdle will be 3145 pence 12 growth for a minimum match of 025 of a share to vest 
and 3650 pence 30 growth for the maximum match of one share   annual report and accounts january 2013
46
management share options
the management share option plan provides for options over shares exercisable between three and ten years 
following their grant to be allocated to group employees  this plan is primarily aimed at middle management 
and senior store staff  no options were granted to any directors or changes made to existing entitlements in the 
year under review  no employee is entitled to be granted options under the scheme and be included in the ltip 
or the smp in the same year
the total number of options which can be granted is subject to shareholder approved limits and there are no cash 
settlement alternatives  options are set at the prevailing market price at the time of grant which are generally 
made annually  the maximum total market value of shares ie  the acquisition price of shares over which options 
may be granted to any person during any financial year of the company is three times salary  this limit may be 
increased to five times salary in circumstances considered by the committee to be exceptional for example on 
the grant of options following recruitment  the maximum grant during the year was 120 of salary  
sharesave options
executive directors can participate in the company’s save as you earn sharesave scheme which is open to 
all employees  grants are generally made annually and the scheme is subject to hmrc rules which limit the 
maximum monthly savings to £250  options are granted at a discount of 20 to the prevailing market rate and are 
exercisable three five or seven years from the date of grant  sharesave options granted to or exercised by directors 
in the year are detailed on page 52
 
dilution of share capital by employee share plans
the company monitors and has complied with dilution limits in its various share scheme rules and has not issued 
a significant number of new or treasury shares in satisfaction of share schemes in the last 10 years  sharebased 
incentives are usually satisfied from shares held by the esot – see note 26  
group pension plan 
executive directors are members of the next group pension plan the “plan” which has been approved by hm 
revenue  customs and consists of defined benefit and defined contribution sections  
the trustee of the plan is a limited company next pension trustees limited the “trustee”  the board of the trustee 
includes members of the plan a pensioner member and an independent director who is also the chairman of 
the trustee  two of the directors are member nominated directors and cannot be removed by next the other 
directors including the independent director are appointed by and can be removed by next  all directors of the 
trustee receive a fee for their services including those directors who are also employees of next  no director of the 
company is a director of the trustee
the plan’s investments are kept separate from the business of the next group and the trustee holds them in trust  
responsibility for investment of the plan’s funds has been delegated by the trustee to professional investment 
managers
the group operates a salary sacrifice scheme whereby members from either section can elect to receive a 
reduced gross salary in exchange for enhanced employer pension contributions  the participation of members 
in the salary sacrifice scheme does not result in any overall increase in costs to the group
defined contribution section
employees of the group can join the defined contribution section of the plan  members elect to pay either 3 or 
5 of their pensionable earnings which is matched by the company  for death prior to retirement a lump sum of 
three times the member’s base salary at the previous april is payable along with the current value of the member’s 
fund  
remuneration report additional information parent company accounts
annual report and accounts january 2013
47
consolidated accounts governance business reports
defined benefit section
the defined benefit section was closed to new members in 2000 and during the current year the group reviewed 
its operation for remaining employee members  following a consultation process with those employees from 
november 2012 the future accrual of pension benefits will be based on pensionable salary frozen at that time 
rather than final earnings  in addition those employees can elect to receive either a salary supplement or 
additional contributions to a defined contribution scheme  from november 2012 the defined benefit section 
provides members with a retirement benefit of one sixtieth or one eightieth depending on the member’s chosen 
contribution rate of pensionable earnings at 31 october 2012 for each year of pensionable service
 
this section provides a lump sum death in service benefit and dependants’ pensions on death in service or 
following retirement  pensions are only payable to deceased members’ children after death in service  in the 
case of illhealth retirement only the accrued pension is payable  all benefits are subject to plan limits  increases 
to pensions in payment are at the discretion of the trustee although pensionable service post1997 is subject to 
limited price indexation  from 2006 sales and profit related bonuses were excluded from pensionable earnings 
and the normal retirement age under the plan was increased from 60 to 65  
members contribute 3 or 5 of pensionable earnings whilst the company currently makes contributions at the 
rate of 175  the last full triennial valuation of the plan was carried out as at march 2010 the next will take place 
as at march 2013  as calculated in accordance with international financial reporting standards the surplus in 
the plan at january 2013 was £656m further details are given in note 21 to the financial statements
certain members whose accrued or projected pension fund value exceeds their personal lifetime allowance 
are provided with benefits through an unfunded unapproved arrangement  the relevant members contribute 
towards the additional cost of providing these benefits by a deduction of 5 on all pensionable earnings  since 
april 2011 where existing members have reached either the annual or lifetime pension contributions limits the 
company has offered those members the choice of leaving the defined benefit section and either joining the 
defined contribution section with an enhanced company contribution or taking a salary supplement in both 
cases equal to 10 or 15 of their salary depending on their existing contributions and benefits  
autoenrolment
following the introduction of autoenrolment ae in 2012 most employees now have the option of joining the 
next plan the statutory ae plan or opting out of pension provision through the company  contributions to ae 
commenced in february 2013
specific information in respect of executive directors’ pension entitlements is detailed on page 53  
service contracts
executive directors
apart from service contracts detailed in the remuneration policy table on page 42 no director has had any 
material interest in any contract with the company or its subsidiaries
nonexecutive directors
letters of appointment for the chairman and nonexecutive directors do not contain fixed term periods however 
they are appointed in the expectation that they will serve for a minimum of six years subject to satisfactory 
performance and successful reelection at annual general meetings   annual report and accounts january 2013
48
dates of appointment and notice periods for nonexecutive directors are set out below
date of appointment notice period
chairman
john barton 17 may 2006 12 months
nonexecutive directors
steve barber 1 june 2007 1 month
christine cross 19 january 2005 1 month
jonathan dawson 13 may 2004 1 month
caroline goodall 1 january 2013 1 month
francis salway 1 june 2010 1 month
 
executive directors’ external appointments
andrew varley is a nonexecutive director of londonmetric property plc and the remuneration committee has 
approved his retention of the director’s fee of £50000 per annum for this appointment  no other executive director 
holds any nonexecutive directorships outside the group  
directors’ interests
the company has a formal share ownership requirement for executive directors as set out on pages 40 and 41
directors’ beneficial interests in shares at the beginning of the financial year and at the end of the year were as 
follows
                                                                                                                                                         ordinary shares of 10p each   
2013 
no  of 
shares
2012 
no  of 
shares
lord wolfson 1520505 1638010
christos angelides 77171 72975
steve barber 5000 10000
john barton 16000 16000
christine cross 5598 5598
jonathan dawson 5000 5000
caroline goodall nil na
david keens 165535 151574
francis salway 9258 9258
andrew v arley 69817 76460
david keens has a beneficial holding of £83000 2012 £83000 nominal value of the company’s 2013 525 
corporate bonds
there have been no changes to directors’ interests in the shares of the company from the end of the financial year 
to 19 march 2013  full details of directors’ interests in the shares and share options of the company are contained 
in the register of directors’ interests which is open to inspection  
remuneration report additional information parent company accounts
annual report and accounts january 2013
49
consolidated accounts governance business reports
performance graph 
the graph below illustrates the performance of the company when compared with the ftse all share and ftse 
general retailers index  these have been selected to illustrate the company’s total shareholder return performance 
against a wide uk index and a sector specific index for the five year period ending january 2013  
2008 2009 2010 2011 2012 2013
400
340
280
220
160
100
40
rebased to 31 january 2008  100
next ftse all share ftse general retailers
next plc performance chart
20082013 total shareholder return
information subject to audit 
directors’ remuneration
£’000
salary
fee
annual 
performance 
related bonus benefits
salary
supplement
1
total
2013
total 
2012
chairman
john barton 250 – – – 250 250
executive directors
lord wolfson 714 1064 45 27 1850 1486
christos angelides 519 514 33 19 1085 900
david keens 477 472 19 72 1040 916
andrew v arley 355 351 27 53 786 674
nonexecutive directors
steve barber 60 – – – 60 60
christine cross 50 – – – 50 50
jonathan dawson 70 – – – 70 70
caroline goodall 4– – – 4 –
francis salway 50 – – – 50 50
total 2549 2401 124 171 5245 4456
total 2012 2495 1751 115 95 4456
1
  directors received a salary supplement of 15 in lieu of pension provision from april 2011 andrew varley june 2011 david keens and november 2012 lord wolfson 
and christos angelides
lord wolfson was the highest paid director in the current and previous year £350000 of his annual performance
related bonus is payable in next shares 2012 £56000 deferred for a period of two years and will be forfeited if 
he voluntarily resigns prior to the end of that period
the company paid a pension under the unfunded unapproved arrangement to a former director of the company 
of £36496 2012 £35606   annual report and accounts january 2013
50
long term incentive plans
for the three year performance period to july 2012 tsr ranked fifth in the comparator group of 22 and 96 of 
the grant made in july 2009 vested  before allowing the award to vest the remuneration committee assessed 
the performance of the company during the performance period in light of underlying economic and other 
conditions ‘the economic underpin’  the committee noted that eps compound growth of 197 and pretax 
profit compound growth of 104 over the three year period was well ahead of rpi compound growth of 43  in 
addition dividends had grown in line with eps and £727m had been returned to shareholders through buybacks  
the committee also assessed earnings growth against selected comparable major uk retailers and concluded 
that next had performed favourably  taking these factors into account the committee determined that the 
economic underpin performance condition for the july award had been satisfied  details of the amounts that 
vested for each executive director are detailed in the table below  the awards were cash settled for all executives 
except david keens who received shares
 
for the performance period to january 2013 tsr ranked fifth against the comparator group of 22 which corresponds 
to an expected vesting of 98 of the maximum award made in january 2010  the remuneration committee will 
formally assess the performance of the company for this period in april on the same basis as the grant made in 
july 2009 before determining whether the economic underpin performance condition has been satisfied  if the 
condition is satisfied the january 2013 award will be settled in april and based on the share price of £4110 on 19 
march 2013 awards for each executive director for the year are detailed below
july 2012 january 2013         total total for 2012
actual no  
of shares
value 
£’000
actual no  
of shares
estimated 
value 
£’000
estimated 
value 
£’000
adjustment 
to estimate 
£’000
final 
value 
£’000
lord wolfson
1
42582 1448 25596 1052 2500 – 2500
christos angelides
1
37062 1260 30170 1240 2500 33 1673
david keens 21291 724 16796 690 1414 31 1602
andrew v arley 15849 539 12487 513 1052 23 1193
116784 3971 85049 3495 7466 87 6968
1
  as noted on page 33 the value of the ltip awards for lord wolfson and christos angelides will be restricted in respect of the financial year ended january 2013 to a 
maximum of £25m as it was for lord wolfson in 2012
remuneration report additional information parent company accounts
annual report and accounts january 2013
51
consolidated accounts governance business reports
details of directors’ interests in long term schemes comprising the ltip and deferred bonus shares are summarised 
below 
date of 
award
maximum 
share 
potential 
january 
2012
1
shares 
awarded 
during 
the 
year
shares 
vested 
during 
the 
year
3
shares 
lapsed 
during 
the 
year
maximum 
share 
potential 
january 
2013
1
market 
value on 
date of 
award 
£
market 
value on 
date cash 
equivalent 
determined 
£
vesting 
date
lord wolfson
ltip mar 2009 62374 – 28426 33948
4
– 1093 3014 jan 2012
sept 2009 44356 – 42582 1774 – 1537 3401 jul 2012
mar 2010 34228 – – – 34228
5
2013 – jan 2013
sept 2010 32592 – – – 32592 2114 – jul 2013
mar 2011 33684 – – – 33684 2070 – jan 2014
sept 2011 30289 – – – 30289 2302 – jul 2014
mar 2012 – 26861 – – 26861 2660 – jan 2015
sept 2012 – 23175 – – 23175 3083 – jul 2015
deferred bonus 
shares
2
apr 2010 15615 – 15615 – – 2183 2933 apr 2012
apr 2011 17020 – – – 17020 2024 – apr 2013
apr 2012 – 1902 – – 1902 2933 – apr 2014
total 270158 51938 86623 35722 199751
christos 
angelides
ltip mar 2009 32573 – 27036 5537 – 1093 3014 jan 2012
sept 2009 38606 – 37062 1544 – 1537 3401 jul 2012
mar 2010 31048 – – – 31048
5
2013 – jan 2013
sept 2010 29565 – – – 29565 2114 – jul 2013
mar 2011 30556 – – – 30556 2070 – jan 2014
sept 2011 16486 – – – 16486 2302 – jul 2014
mar 2012 – 14619 – – 14619 2660 – jan 2015
sept 2012 – 12614 – – 12614 3083 – jul 2015
total 178834 27233 64098 7081 134888
david keens
ltip mar 2009 31187 – 25885 5302 – 1093 3014 jan 2012
sept 2009 22178 – 21291 887 – 1537 3401 jul 2012
mar 2010 17139 – – – 17139
5
2013 – jan 2013
sept 2010 16320 – – – 16320 2114 – jul 2013
mar 2011 16866 – – – 16866 2070 – jan 2014
sept 2011 15166 – – – 15166 2302 – jul 2014
mar 2012 – 13449 – – 13449 2660 – jan 2015
sept 2012 – 11604 – – 11604 3083 – jul 2015
total 118856 25053 47176 6189 90544
andrew varley
ltip mar 2009 23217 – 19270 3947 – 1093 3014 jan 2012
sept 2009 16510 – 15849 661 – 1537 3401 jul 2012
mar 2010 12742 – – – 12742
5
2013 – jan 2013
sept 2010 12133 – – – 12133 2114 – jul 2013
mar 2011 12536 – – – 12536 2070 – jan 2014
sept 2011 11273 – – – 11273 2302 – jul 2014
mar 2012 – 9995 – – 9995 2660 – jan 2015
sept 2012 – 8624 – – 8624 3083 – jul 2015
total 88411 18619 35119 4608 67303
1
 the maximum number of ltip shares is the award that could be receivable if the tsr performance conditions outlined on pages 38 and 39 are fully met
2
 full details of deferred bonus are set out on pages 38 and 49
3
  see page 50 for details of the performance conditions and vesting levels applicable to the ltip schemes vesting in the year including the restriction on the maximum 
value that could vest
4
  the maximum value of ltip awards that vest for a participant in a year is capped at £25m  this cap was applied to lord wolfson’s awards that vested in the year to january 
2012  the impact of the cap was to reduce shares vested and increase shares lapsed by 23344 shares
5
 see page 50 for details of these awards which are expected to vest in april 2013 annual report and accounts january 2013
52
the ltip performance periods which mature after january 2013 are not yet complete and no entitlement has yet 
been earned  a charge of £23368000 for the year 2012 £17159000 has been made in the accounts in respect 
of these ltip grants of which approximately £9554000 2012 £7956000 related to the executive directors
for all ltip participants the total maximum shares receivable at january 2012 was 1364175 january 2011 
1776284  during the year grants over 517192 shares vested 2012 615044 grants over 57545 shares lapsed 
2012 189723 and further grants over 295033 shares were issued 2012 392658  at january 2013 the total 
maximum shares receivable was 1084471 excluding the impact of any cap on the total value which may apply 
with an average remaining contractual life of 16 years 2012 16 years
share matching plan and sharesave interests 
details of directors’ interests in the smp and sharesave option scheme are as follows 
date of 
grant
maximum 
share 
potential 
at january 
2012
options 
granted 
during 
the year
options 
exercised 
during the 
year
options 
waived 
during 
the year
2
maximum 
share 
potential 
at january 
2013
4
option 
price
£ option period
lord wolfson
smp
1
jun 2010 65190 – – 65190 – nil jun 2013 – jun 2020
apr 2011 67098 – – – 67098 nil apr 2014 – apr 2021
sharesave oct 2008 1826 – – – 1826 917 dec 2013 – jun 2014
total 134114 – – 65190 68924
christos angelides
smp
1
jun 2010 46132 – – – 46132 nil jun 2013 – jun 2020
apr 2011 48690 – – – 48690 nil apr 2014 – apr 2021
apr 2012 – 8392 – – 8392 nil apr 2015 – apr 2022
sharesave oct 2011 431 – – – 431 2084 dec 2014 – jun 2015
total 95253 8392 – – 103645
david keens
smp
1
jun 2010 44796 – – – 44796 nil jun 2013 – jun 2020
apr 2011 44796 – – – 44796 nil apr 2014 – apr 2021
apr 2012 – 6714 – – 6714 nil apr 2015 – apr 2022
sharesave oct 2008 385 – 385
3
– – 917 dec 2011 – jun 2012
oct 2010 319 – – – 319 1782 dec 2013 – jun 2014
oct 2011 158 – – – 158 2084 dec 2014 – jun 2015
total 90454 6714 385 – 96783
andrew varley
smp
1
jun 2010 32204 – – – 32204 nil jun 2013 – jun 2020
apr 2011 33306 – – – 33306 nil apr 2014 – apr 2021
apr 2012 – 6714 – – 6714 nil apr 2015 – apr 2022
sharesave oct 2011 431 – – – 431 2084 dec 2014 – jun 2015
total 65941 6714 – – 72655
  
1
  the performance criteria attached to the smp are described on page 45
2
  as disclosed on page 34 lord wolfson has waived his potential entitlement to the 2010 smp grant
3
  the market price of shares at the date of exercise was £2625 for david keens equal to a gain of £6576
4   
the market price for the shares at the end of the financial year was £4059 the lowest and highest share price during the financial year was £2619 and £4059 respectively
save for the waiver of lord wolfson’s 2010 smp entitlement there have been no other changes to awards under the 
smp or sharesave during the year
remuneration report additional information parent company accounts
annual report and accounts january 2013
53
consolidated accounts governance business reports
directors’ pension entitlements
the policy table on page 40 details the pension entitlements of the executive directors who held office during the 
year  in summary these are as follows
age at 
january 
2013
years of 
pensionable 
service
accrued 
annual 
pension 
£’000
change in 
accrued 
annual 
pension 
£’000
change in 
accrued 
annual 
pension 
net of 
inflation
£’000
transfer value of 
accrued annual 
pension
increase in 
transfer value 
less director’s 
contributions 
£’000
2013
£’000
2012
£’000
lord wolfson 45 18 308 20 14 4333 3911 386
christos angelides 49 20 272 16 11 4802 4336 440
david keens 59 25 182 4 – 5696 4914 782
andrew v arley 62 24 74 2 – 2154 2135 19
years of pensionable service shown above may include boughtin service from the transfer of other pension 
entitlements into the plan  directors’ pension arrangements are subject to the same actuarial reduction as other 
employees on termination or early retirement
on behalf of the board
jonathan dawson
chairman of the remuneration committee annual report and accounts january 2013
54
independent auditor’s report to the members of next plc
we have audited the financial statements of next plc for the 
year ended 26 january 2013 which comprise the consolidated 
income statement the consolidated statement of comprehensive 
income the consolidated and company balance sheets the 
consolidated and company statements of changes in equity   the 
consolidated and company cash flow statements accounting 
policies and the related notes 1 to 32 and c1 to c7 the financial 
reporting framework that has been applied in their preparation is 
applicable law and international financial reporting standards 
“ifrs” as adopted by the european union and as regards the 
parent company financial statements as applied in accordance 
with the provisions of the companies act 2006
this report is made solely to the company’ s members as a body 
in accordance with chapter 3 of part 16 of the companies act 
2006 our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditor’s report and for no other purpose 
to the fullest extent permitted by law we do not accept or 
assume responsibility to anyone other than the company and 
the company’s members as a body for our audit work for this 
report or for the opinions we have formed
respective responsibilities of directors and 
auditor
as explained more fully in the directors’ responsibilities 
statement on page 26 the directors are responsible for the 
preparation of the financial statements and for being satisfied 
that they give a true and fair view our responsibility is to 
audit and express an opinion on the financial statements in 
accordance with applicable law and international standards 
on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s ethical standards 
for auditors
scope of the audit of the financial 
statements
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting 
policies are appropriate to the group’s and the parent 
company’s circumstances and have been consistently applied 
and adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements in addition we read 
all the financial and nonfinancial information in the annual 
report and accounts to identify material inconsistencies with 
the audited financial statements if we become aware of 
any apparent material misstatements or inconsistencies we 
consider the implications for our report
opinion on financial statements
in our opinion
 ❚ the financial statements give a true and fair view of the 
state of the group’s and of the parent company’s affairs 
as at 26 january 2013 and of the group’s profit for the year 
then ended 
 ❚ the group financial statements have been properly 
prepared in accordance with ifrs as adopted by the 
european union 
 ❚ the parent company financial statements have been 
properly prepared in accordance with ifrs as adopted by 
the european union and as applied in accordance with the 
provisions of the companies act 2006 and
 ❚ the financial statements have been prepared in 
accordance with the requirements of the companies act 
2006 and as regards the group financial statements article 
4 of the ias regulation
opinion on other matters prescribed by the 
companies act 2006
in our opinion
 ❚ the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the 
companies act 2006 and
 ❚ the information given in the directors’ report for the financial 
year for which the financial statements are prepared is 
consistent with the financial statements
matters on which we are required to report 
by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to 
you if in our opinion
 ❚ adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have not 
been received from branches not visited by us or
 ❚ the parent company financial statements and the part of 
the directors’ remuneration report to be audited are not 
in agreement with the accounting records and returns or
 ❚ certain disclosures of directors’ remuneration specified by 
law are not made or
 ❚ we have not received all the information and explanations 
we require for our audit
under the listing rules we are required to review
 ❚ the directors’ statement set out on page 32 in relation to 
going concern 
 ❚ the part of the corporate governance statement relating to 
the company’s compliance with the nine provisions of the 
uk corporate governance code specified for our review 
and
 ❚ certain elements of the report to shareholders by the board 
on directors’ remuneration
nigel meredith senior statutory auditor
for and on behalf of ernst  young llp   statutory auditor
birmingham
21 march 2013
 
notes 
1  the maintenance and integrity of the next plc website is the responsibility of the 
directors the work carried out by the auditors does not involve consideration 
of these matters and accordingly the auditors accept no responsibility for any 
changes that may have occurred to the financial statements since they were 
initially presented on the website 
2  legislation in the united kingdom governing the preparation and dissemination 
of financial statements may differ from legislation in other jurisdictions additional information parent company accounts governance
annual report and accounts january 2013
55
business reports consolidated accounts
consolidated income statement
for the financial year ended 26 january
2013 2012
notes
underlying
£m
exceptional
items
note 6
£m
total
£m
underlying
£m
 
exceptional
items
note 6
£m
total
£m
continuing operations
revenue 1 2 35478 150 35628 34411 – 34411
cost of sales 24311 59 24370 23958 – 23958
gross profit 11167 91 11258 10453 – 10453
distribution costs 2695 – 2695 2457 – 2457
administration expenses 2010 – 2010 2013 – 2013
other gainslosses 3 34 358 392 11 31 20
trading profit 6496 449 6945 5972 31 6003
share of results of associates 06 – 06 15 – 15
operating profit 3 6502 449 6951 5987 31 6018
finance income 5 04 – 04 05 61 66
finance costs 5 290 – 290 289 – 289
profit before taxation 6216 449 6665 5703 92 5795
taxation 7 1485 94 1579 1429 24 1453
profit from continuing operations 4731 355 5086 4274 68 4342
profit from discontinued operations  –– – 26 380 406
profit for the year 4731 355 5086 4300 448 4748
profit for the year attributable to
equity holders of the parent company 4732 355 5087 4301 448 4749
noncontrolling interest 01 – 01 01 – 01
profit for the year 4731 355 5086 4300 448 4748
2013 2012
underlying total underlying total
basic earnings per share 9 
continuing operations 2977p 3201p 2539p 2579p
discontinued operations –– 15p 241p
total 2977p 3201p 2554p 2820p
diluted earnings per share 9 
continuing operations 2899p 3117p 2476p 2516p
discontinued operations –– 15p 235p
total 2899p 3117p 2491p 2751p annual report and accounts january 2013
56
consolidated statement of comprehensive income
for the financial year ended 26 january
notes
2013
£m
2012
£m
profit for the year 5086 4748
other comprehensive income and expenses
exchange differences on translation of foreign operations – 20
gains on cash flow hedges 16 156
actuarial losses on defined benefit pension scheme 21 197 285
tax relating to components of other comprehensive income 7 69 45
112 104
reclassification adjustments
transferred to income statement on cash flow hedges 3 45 50
transferred to the carrying amount of hedged items on cash flow hedges 03 59
exchange gains transferred to income statement on disposal of subsidiary – 06
48 15
other comprehensive expense for the year 160 119
total comprehensive income for the year 4926 4629
attributable to
equity holders of the parent company 4927 4630
noncontrolling interest 01 01
total comprehensive income for the year 4926 4629 additional information parent company accounts governance
annual report and accounts january 2013
57
business reports consolidated accounts
notes
2013
£m
2012
£m
assets and liabilities
noncurrent assets
property plant  equipment 10 5373 5819
intangible assets 11 448 456
interests in associates and other investments 12 72 71
defined benefit pension surplus 21 656 351
other financial assets 15 309 446
6858 7143
current assets
inventories 13 3318 3719
customer and other receivables 14 7181 6991
other financial assets 15 216 125
cash and short term deposits 16 1363 564
12078 11399
total assets 18936 18542
current liabilities
bank loans and overdrafts 17 54 76
corporate bonds 20 876 –
trade payables and other liabilities 18 5372 5450
other financial liabilities 19 875 870
current tax liabilities 983 1028
8160 7424
noncurrent liabilities
corporate bonds 20 5668 6521
provisions 22 112 120
deferred tax liabilities 7 40 154
other financial liabilities 19 – 44
other liabilities 18 2100 2052
7920 8891
total liabilities 16080 16315
net assets 2856 2227
total equity 2856 2227
approved by the board on 21 march 2013
lord wolfson of aspley guise
director
david keens
director
consolidated balance sheet
as at 26 january annual report and accounts january 2013
58
consolidated statement of changes in equity
for the financial year ended 26 january
share
capital
£m
share
premium
account
£m
capital
redemp
tion
reserve
£m
esot
reserve
£m
fair
value
reserve
£m
foreign
currency
trans
lation
£m
other
reserves
£m
retained
earnings
£m
share
holders’
equity
£m
non
control
ling
interest
£m
total
equity
£m
at january 2011 181 08 118 1386 32 46 14438 17826 2323 01 2324
profit for the year – – – – – – – 4749 4749 01 4748
other comprehensive 
incomeexpense for 
the year – – – – 147 26 – 240 119 – 119
total comprehensive 
income for the year – – – – 147 26 – 4509 4630 01 4629
share buybacks  
commitments note 23 12 – 12 – – – – 3230 3230 – 3230
esot share purchases  
commitments note 26 – – – 1123 – – – – 1123 – 1123
shares issued by esot – – – 1098 – – – 422 676 – 676
share option charge – – – – – – – 179 179 – 179
tax recognised directly  
in equity – – – – – – – 123 123 – 123
equity dividends paid – – – – – – – 1351 1351 – 1351
at january 2012 169 08 130 1411 115 20 14438 17634 2227 – 2227
profit for the year – – – – – – – 5087 5087 01 5086
other comprehensive 
expense for the year – – – – 32 – – 128 160 – 160
total comprehensive 
income for the year – – – – 32 – – 4959 4927 01 4926
shares issued – 01 – – – – – – 01 – 01
share buybacks  
commitments note 23 08 – 08 – – – – 2200 2200 – 2200
esot share purchases  
commitments note 26 – – – 1435 – – – – 1435 – 1435
shares issued by esot – – – 690 – – – 247 443 – 443
share option charge – – – – – – – 178 178 – 178
tax recognised directly 
in equity – – – – – – – 193 193 – 193
equity dividends paid – – – – – – – 1477 1477 – 1477
at january 2013 161 09 138 2156 83 20 14438 19040 2857 01 2856 additional information parent company accounts governance
annual report and accounts january 2013
59
business reports consolidated accounts
2013
£m
2012
£m
cash flows from operating activities
operating profit – continuing operations 6951 6018
operating profit – discontinued operations – 29
 depreciation and amortisation 1172 1197
 impairment 18 14
 loss on disposal of property plant  equipment 25 45
 share option charge 178 168
 share of undistributed profit of associates 01 10
 exchange movement 32 07
 decreaseincrease in inventories 401 36
 increase in customer and other receivables 217 938
 increase in trade and other payables 74 282
 pension contributions less income statement charge 502 64
cash generated from operations 8067 6698
 corporation taxes paid 1477 1439
net cash from operating activities 6590 5259
cash flows from investing activities
 additions to property plant and equipment 816 1261
 decrease in capital accruals 108 90
 payments to acquire property plant and equipment 924 1351
 net proceeds from disposal of subsidiary note 6 15 630
 proceeds from sale of property plant and equipment 53 19
 payment of deferred consideration 01 –
net cash from investing activities 857 702
cash flows from financing activities
 repurchase of own shares 2419 2911
 purchase of shares by esot 1230 1067
 proceeds from disposal of shares by esot 434 676
 repayment of unsecured bank loans – 1150
 net proceeds from bond issue and tender – 1533
 interest paid 238 239
 interest received 20 50
 payment of finance lease liabilities 01 02
 dividends paid 1477 1351
net cash from financing activities 4911 4461
net increase in cash and cash equivalents 822 96
opening cash and cash equivalents 488 391
effect of exchange rate fluctuations on cash held 01 01
closing cash and cash equivalents note 31 1309 488
consolidated cash flow statement
for the financial year ended 26 january
in the prior year net cash from operating activities included £99m of outflow in respect of discontinued operations 
ventura during the period prior to disposal annual report and accounts january 2013
60
basis of preparation
the financial statements of next plc “the company” and next plc and its subsidiaries “the group” have 
been prepared in accordance with international financial reporting standards “ifrs” adopted for use in the 
european union and in accordance with the companies act 2006   the financial statements have been prepared 
on the historical cost basis except for certain financial instruments pension assets and liabilities and sharebased 
payment liabilities which are measured at fair value   the financial statements are for the 52 weeks to 26 january 
2013 last year 52 weeks to 28 january 2012
there have been no changes in accounting policies this year or last year and the principal policies adopted are 
set out below
basis of consolidation
the consolidated financial statements incorporate the financial statements of the company and its subsidiary 
undertakings   all intragroup transactions balances income and expenses are eliminated on consolidation
the results of any subsidiaries acquired or disposed of during the period are included in the consolidated income 
statement from the effective date of acquisition or up to the effective date of disposal   the results and net assets of 
associated undertakings are incorporated into these financial statements using the equity method of accounting
foreign currencies
the consolidated financial statements are presented in pounds sterling which is the company’s functional and 
presentation currency   the group includes foreign entities whose functional currencies are not sterling  on 
consolidation the assets and liabilities of those entities are translated at the exchange rates at the balance 
sheet date and income and expenses are translated at weighted average rates during the period   translation 
differences are recognised in equity
transactions in currencies other than an entity’s functional currency are recorded at the exchange rate on the 
transaction date whilst assets and liabilities are translated at exchange rates at the balance sheet date   exchange 
differences are recognised in the income statement
revenue
revenue represents the fair value of amounts receivable for goods and services and is stated net of sales taxes 
and returns  sales of goods are recognised on delivery   directory service charge income is accrued on a time 
basis by reference to the principal outstanding and the effective interest rate   revenue from the sale of gift cards 
is deferred until their redemption
underlying profit and exceptional items
exceptional items are significant items of an unusual or nonrecurring nature which are shown separately in the 
income statement to provide a clearer understanding of the underlying financial performance during the year  
further details are given in note 6
property plant  equipment
property plant and equipment are stated at cost less accumulated depreciation and impairment
depreciation is charged so as to write down the cost of assets to their estimated residual values over their remaining 
useful lives on a straight line basis  estimated useful lives and residual values are reviewed at least annually and 
are summarised as follows 
freehold and long leasehold property 50 years
plant and fittings
 plant machinery and building works 10 – 25 years
 fixtures and fittings 6 – 15 years
 vehicles it and other assets 2 – 6 years
 leasehold improvements the period of the lease or useful life if shorter
accounting policies additional information parent company accounts governance
annual report and accounts january 2013
61
business reports consolidated accounts
goodwill
goodwill is initially measured at cost being the excess of the acquisition cost over the group’s interest in the assets 
and liabilities recognised  goodwill is not amortised but is reviewed for impairment annually or whenever there is 
an indication of impairment
other intangible assets
separately identifiable intangible assets obtained in a business acquisition are initially recognised at fair value if 
this can be measured reliably and the asset arises from contractual or other legal rights  other intangible assets 
are amortised on a straight line basis over their expected useful lives as follows
lipsy brand names and trademarks 10 years
lipsy customer relationships 4 years
other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate their 
carrying value may not be recoverable
investments
investments in subsidiary companies and equity instruments that do not have a quoted market price in an active 
market and whose fair value cannot be reliably measured are stated at cost subject to review for impairment
impairment
the carrying values of nonfinancial assets are reviewed at each balance sheet date to determine whether there is 
any indication of impairment  if any impairment loss arises the asset value is adjusted to its estimated recoverable 
amount and the difference is recognised in the income statement
pension scheme
the group operates a pension plan which consists of defined benefit and defined contribution sections  the 
assets of the plan are held in a separate trustee administered fund  the group also provides other unfunded 
pension benefits to certain plan members
the cost of providing benefits under the defined benefit and unfunded arrangements are determined using the 
projected unit credit method with actuarial valuations being carried out at each balance sheet date  the net 
defined benefit pension asset or liability represents the fair value of the defined benefit plan assets less the present 
value of the defined benefit and unfunded liabilities  a net pension asset is only recognised to the extent that it is 
expected to be recoverable in the future
actuarial gains and losses are recognised in the statement of comprehensive income in full in the period in which 
they occur  other income and expenses are recognised in the income statement
the cost of the defined contribution section is recognised in the income statement as incurred
inventories 
inventories stocks are valued at the lower of standard cost or net realisable value  net realisable value is based 
on estimated selling prices less further costs to be incurred to disposal
directory and other receivables
directory customer receivables represent outstanding customer balances less any allowance for impairment 
which is based on objective evidence and recent default experience by customer account category  other trade 
receivables are stated at invoice value less any allowance for impairment
cash and cash equivalents
for the purposes of the consolidated cash flow statement cash and cash equivalents consist of cash and short 
term deposits less bank overdrafts which are repayable on demand  short term deposits are those with an original 
maturity of three months or less annual report and accounts january 2013
62
corporate bonds and bank borrowings
corporate bonds and bank borrowings are recognised at the net proceeds received and subsequently adjusted 
where hedge accounting applies see interest rate derivatives below  accrued interest is included within other 
creditors and accruals
sharebased payments
the fair value of employee share options is calculated when they are granted using a blackscholes model  the 
resulting cost is charged in the income statement over the vesting period of the option and is regularly reviewed 
and adjusted for the expected and actual number of options vesting
for cashsettled sharebased payments including the long term incentive plan the fair value of the liability is 
determined at each balance sheet date and the cost is recognised in the income statement over the vesting period  
taxation
taxation comprised of current and deferred tax is charged or credited to the income statement unless it relates to 
items in other comprehensive income or directly in equity  in such cases the related tax is also recognised in other 
comprehensive income or directly in equity
current tax liabilities are measured at the amount expected to be paid based on tax rates and laws that are 
enacted or substantively enacted at the balance sheet date
deferred tax is accounted for using the balance sheet liability method and is calculated using rates of taxation 
enacted or substantively enacted at the balance sheet date which are expected to apply when the asset or 
liability is settled
deferred tax liabilities are generally recognised for all taxable temporary differences  deferred tax assets are 
only recognised to the extent that it is probable that taxable profits will be available against which deductible 
temporary differences can be utilised  deferred tax is not recognised in respect of investments in subsidiaries and 
associates where the reversal of any taxable temporary differences can be controlled and are unlikely to reverse 
in the foreseeable future
other financial assets and liabilities derivative financial instruments and hedge accounting
derivative financial instruments “derivatives” are used to manage risks arising from changes in foreign currency 
exchange rates relating to the purchase of overseas sourced products and changes in interest rates relating to 
the group’s debt  in accordance with its treasury policy the group does not enter into derivatives for speculative 
purposes  foreign currency and interest rate derivatives are stated at their fair value being the estimated amount 
that the group would receive or pay to terminate them at the balance sheet date based on prevailing foreign 
currency and interest rates
foreign currency derivatives
changes in the fair value of foreign currency derivatives which are designated and effective as hedges of future 
cash flows are recognised in equity in the fair value reserve and subsequently transferred to the carrying amount of 
the hedged item or the income statement  realised gains or losses on cash flow hedges are therefore recognised 
in the income statement in the same period as the hedged item
hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised or 
no longer qualifies for hedge accounting  at that time any cumulative gain or loss on the hedging instrument 
previously recognised in equity is retained in equity until the hedged transaction occurs  if the hedged transaction 
is no longer expected to occur the net cumulative gain or loss recognised in equity is then transferred to the 
income statement
changes in the fair value of foreign currency derivatives which are ineffective or do not meet the criteria for hedge 
accounting in ias 39 are recognised in the income statement
accounting policies additional information parent company accounts governance
annual report and accounts january 2013
63
business reports consolidated accounts
interest rate derivatives
the group uses interest rate derivatives to hedge part of the interest rate risk associated with the company’s 
corporate bonds  the carrying values of the relevant bonds are adjusted only for changes in fair value attributable 
to the interest rate risk being hedged  the adjustment is recognised in the income statement and is offset by 
movements in the fair value of the derivatives
changes in the fair value of interest rate derivatives which are ineffective or do not meet the criteria for hedge 
accounting in ias 39 are recognised in the income statement
share buybacks
the group has regularly returned surplus cash to shareholders through share buybacks  shares purchased for 
cancellation are deducted from retained earnings at the total consideration paid or payable  the company also 
uses contingent share purchase contracts and irrevocable closed period buyback programmes  the obligation 
to purchase shares is recognised in full at the inception of the contract even when that obligation is conditional 
on the share price  any subsequent reduction in the obligation caused by the expiry or termination of a contract 
is credited back to equity at that time
shares held by esot
the next employee share ownership trust “esot” provides for the issue of shares to group employees principally 
under share option schemes  shares in the company held by the esot are included in the balance sheet at cost 
as a deduction from equity  the esot may also use contingent share purchase contracts and irrevocable closed 
period share purchase programmes which are accounted for as described above
provisions
a provision is recognised where the group has a legal or constructive obligation as a result of a past event and it 
is probable that an outflow of economic benefits will be required to settle the obligation
leasing commitments
rentals payable under operating leases are charged to income on a straight line basis over the period of the 
lease  contingent rentals payable based on store revenues are accrued in line with the related sales
premiums payable rent free periods and capital contributions receivable on entering an operating lease are 
released to income on a straight line basis over the lease term
the group does not have significant finance leases
significant areas of estimation and judgement
the preparation of the financial statements requires judgements estimations and assumptions to be made that 
affect the reported values of assets liabilities revenues and expenses  the nature of estimation means that actual 
outcomes could differ from those estimates  significant areas of estimation for the group include the expected 
future cash flows applied in measuring impairment of directory customer receivables note 14 estimated selling 
prices applied in determining the net realisable values of inventories note 13 and inventories policy above 
and the actuarial assumptions applied in calculating the net retirement benefit obligation note 21  the audit 
committee section of the corporate governance report page 29 contains further information on the judgmental 
areas considered by the committee during the year  
future changes to accounting standards 
an amendment to ias 19 employee benefits was published in june 2011 and will first apply to the group next year  
it is not expected to have a significant impact
various other new accounting standards and amendments were issued during the year none of which have had 
or are expected to have any significant impact on the group annual report and accounts january 2013
64
1 segmental analysis
the group’s operating segments under ifrs 8 have been determined based on management accounts reviewed 
by the board  the performance of operating segments is assessed on profits before interest and tax excluding 
equity settled share option charges recognised under ifrs 2 sharebased payment and unrealised foreign 
exchange gains or losses on derivatives which do not qualify for hedge accounting  the activities products and 
services of the operating segments are detailed in the directors’ report on page 3  the property management 
segment holds properties and property leases which are sublet to other segments and external parties  
 external revenue internal revenue total revenue
2013
£m
2012
£m
 2013
£m
2012
£m
2013
£m
2012
£m
next retail 21909 21914 60 67 21969 21981
next directory 11926 10887 37 – 11963 10887
next international retail 777 763 – – 777 763
next sourcing 88 75 4983 5115 5071 5190
34700 33639 5080 5182 39780 38821
lipsy 581 549 05 35 586 584
property management 203 62 1920 1888 2123 1950
total segment revenues 35484 34250 7005 7105 42489 41355
third party distribution 144 161 – – 144 161
eliminations – – 7005 7105 7005 7105
continuing operations 35628 34411 – – 35628 34411
discontinued ventura – 648 – 20 – 668
2013 2012 
segment profit underlying
£m
exceptional
items 
note 6
£m
total
£m
underlying
£m
exceptional
items 
note 6
£m
total
£m
next retail 3311 – 3311 3237 – 3237
next directory 3021 – 3021 2626 – 2626
next international retail 84 – 84 79 – 79
next sourcing 308 – 308 211 – 211
6724 – 6724 6153 – 6153
lipsy 20 – 20 13 – 13
property management 35 91 126 56 – 56
total segment profit 6779 91 6870 6222 – 6222
central costs and other 139 358 219 71 31 40
share option charge 178 – 178 168 – 168
unrealised foreign exchange 34 – 34 11 – 11
trading profit 6496 449 6945 5972 31 6003
share of results of associates 06 – 06 15 – 15
finance income 04 – 04 05 61 66
finance costs 290 – 290 289 – 289
profit before tax – continuing operations 6216 449 6665 5703 92 5795
profit before tax – discontinued ventura –– – 29 380 409
transactions between operating segments are made on an arm’s length basis in a manner similar to those with 
third parties  segment revenue and segment profit include transactions between business segments which are 
eliminated on consolidation
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
65
business reports consolidated accounts
1 segmental analysis continued
property plant
 equipment capital expenditure            depreciation
2013
£m
2012
£m
2013
£m
2012
£m
2013
£m
2012
£m
next retail 3741 4072 732 1054 1014 1008
next directory 845 888 67 163 109 121
next international retail 11 17 – 04 05 07
next sourcing 26 34 06 07 10 13
lipsy 68 89 08 29 23 21
property management 680 718 02 – 02 02
ventura discontinued – – – 03 – 14
other 02 01 01 01 01 02
total 5373 5819 816 1261 1164 1188
analyses of the group’s external revenues by customer location and noncurrent assets excluding investments 
the defined benefit pension surplus other financial assets and deferred tax assets by geographical location are 
detailed below
external revenue by geographical location
2013
continuing
£m
2012
continuing
£m
2012
discontinued
£m
united kingdom 33193 32457 637
rest of europe 1711 1481 –
middle east 342 280 –
asia 139 112 –
rest of world 243 81 11
35628 34411 648
noncurrent assets by geographical location
2013
£m
2012
£m
united kingdom 5379 5796
rest of europe 120 150
middle east 45 46
asia 276 282
rest of world 01 01
5821 6275
there were no discontinued operations in the current year last year ventura
2 revenue by type
2013
continuing
£m
2012
continuing
£m
2012
discontinued
£m
sale of goods 33766 32816 –
rendering of services 1548 1439 648
rental income 53 62 –
royalties 111 94 –
sale of property development stock exceptional item see note 6 150 ––
revenue 35628 34411 648
rendering of services includes £1404m 2012 £1261m of service charge on directory customer receivables   annual report and accounts january 2013
66
3 operating profit 
group operating profit is stated after chargingcrediting
2013
£m
2012
£m
depreciation on tangible assets
 owned 1163 1186
 leased 01 02
loss on disposal of property plant  equipment 25 45
amortisation of intangible assets 08 09
impairment charges
 tangible assets 18 14
operating lease rentals
 minimum lease payments net of amortisation of incentives 1955 1943
 contingent rentals payable 68 78
net foreign exchange gains 34 11
cost of inventories recognised as an expense 13522 13192
write down of inventories to net realisable value 751 794
trade receivables 
 impairment charge 283 299
 amounts recovered 47 33
2013
£’000
2012
 £’000
auditors’ remuneration
audit of the financial statements 181 189
audit of subsidiaries 267 265
total audit fees 448 454
other services
 tax compliance 7 29
 tax advisory services 2 28
 corporate finance – 25
 other assurance services 18 22
475 558
gains and losses on cash flow hedges removed from equity and included in the income statement for the period 
comprise gains of £45m 2012 losses of £50m included in cost of sales
other gainslosses reported in the income statement represent changes in the fair value of foreign exchange 
derivative contracts which do not qualify for hedge accounting under ias 39 and the exceptional pension items 
and prior year exceptional vat credit explained in note 6
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
67
business reports consolidated accounts
4 staff costs and key management personnel
total staff costs were as follows
2013
£m
2012
£m
wages and salaries 5101 5369
social security costs 327 372
other pension costs including £358m net exceptional gains 252 61
5176 5802
sharebased payments expense – equity settled 178 179
sharebased payments expense – cash settled 234 179
5588 6160
equity settled sharebased payments comprise management options sharesave options and potential awards 
under the share matching plan details of which are given in note 25  in the prior year the equity settled share
based payments expense included a £11m accelerated charge for ventura employee share options which arose 
on its disposal  cash settled sharebased payments relate to the long term incentive plan “ltip” details of which 
are given in the remuneration report on pages 38 to 39 and 50 to 51
total staff costs by business sector were made up as follows
2013
£m
2012
£m
next retail and directory 5400 5166
next international retail 32 34
next sourcing 236 242
other activities 278 201
exceptional pension credit see note 6 358 –
continuing operations 5588 5643
ventura discontinued – 517
5588 6160
average employees fulltime equivalents
2013
number
2012
number
2013
number
2012
number
next retail and directory 50707 48141 24710 24531
next international retail 277 303 217 234
next sourcing 3148 3642 3148 3642
other activities 375 483 226 278
continuing operations 54507 52569 28301 28685
ventura discontinued – 3735 – 3478
54507 56304 28301 32163
aggregate compensation for key management personnel including employer’ s national insurance contributions 
being the directors of next plc was as follows
2013
£m
2012
£m
short term employee benefits 60 50
postemployment benefits 03 04
sharebased payments 132 105
195 159
directors’ remuneration is detailed in the remuneration report on pages 49 to 53 annual report and accounts january 2013
68
5 finance income and costs
2013
£m
2012
£m
interest on bank deposits 03 03
other interest receivable 01 63
total finance income 04 66
interest on bonds and other borrowings 244 252
premium paid on repurchase of corporate bonds – 82
swap hedging gain on bond repurchases – 73
other fair value movements 46 28
total finance costs 290 289
directory service charge is presented as a component of revenue  in the prior year other interest receivable 
included statutory interest of £61m on an exceptional vat recovery see note 6
6 exceptional items
  footnote
2013
£m
2012
£m
continuing operations
 pension credit a 421 –
 pension charge b 63 –
 sale of property development stock c 91 –
 prior year vat recovery d – 92
449 92
 associated tax charge 94 24
355 68
discontinued operations
 profit on sale of ventura e – 380
 
a during the year the group reviewed the operation of the defined benefit section of its pension plan which was 
closed to new members in 2000  from november 2012 the future accrual of benefits for remaining employee 
members is based on pensionable earnings at that time rather than final earnings  this change gave rise to 
a oneoff accounting gain of £421m
b in june 2012 a second tranche of pensions in payment were subject to a buyin arrangement  the plan 
paid £234m to an insurance company and in return will receive payments equal to those pensions  this 
eliminates the plan’s exposure to the interest inflation and longevity risks of those pensions  the contract also 
allows for the buyin to be converted to a buyout following which the insurance company would become 
directly responsible for those pensions and steps are being taken to proceed on this basis  accordingly the 
transaction has been accounted for as a settlement with the £63m accounting charge presented in the 
income statement as an exceptional item
c during the year the group sold its last remaining stock from its property development activities for £150m 
which had a book value of £59m  the £91m gain is presented as an exceptional item because of its size 
and nonrecurring nature  
d last year the group reached agreement with hm revenue  customs for the recovery of overpaid vat on 
product sales made during the period from 1973 to 1988  the total amount recoverable was £92m comprising 
£31m of vat and interest of £61m
e the group sold its customer services management business ventura which resulted in an exceptional gain of 
£380m last year  net cash proceeds of £630m were received on completion and the final balance of £15m 
was received in the current year
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
69
business reports consolidated accounts
7 taxation
2013
£m
2012
£m
current tax
uk corporation tax on profits of the year 1593 1601
adjustments in respect of previous years 81 126
1512 1475
overseas tax
on profits of the year 28 27
adjustments in respect of previous years 01 –
total current tax 1539 1502
deferred tax
origination and reversal of temporary differences 01 78
adjustments in respect of previous years 41 32
tax expense reported in the consolidated income statement 1579 1456
allocated to
continuing operations 1579 1453
discontinued operations – 03
1579 1456
£94m 2012 £24m of the total tax charge relates to exceptional items see note 6  adjustments in respect 
of previous years relate to release of provisions for items subsequently agreed with hm revenue  customs and 
overseas tax authorities
the tax rate for the current year varied from the standard rate of corporation tax in the uk due to the following 
factors
2013

2012

uk corporation tax rate 243 263
nondeductible expensesnontaxable income 10 05
deferred tax not previously recognised property development losses 02 –
overseas tax differentials 07 05
tax overprovided in previous years 06 15
deferred tax rate change 01 03
effective total tax rate on profit before taxation 237 235
the effective tax rate stated above is based on total profit including exceptional items and discontinued operations   annual report and accounts january 2013
70
7 taxation continued
in addition to the amount charged to the income statement tax movements recognised through equity were as 
follows
2013
£m
2012
£m
current tax
pension benefit obligation 27 –
deferred tax
pension benefit obligation 32 83
fair value movements on derivative instruments 10 38
tax credit in the statement of comprehensive income 69 45
2013
£m
2012
£m
current tax
sharebased payments 81 123
deferred tax
sharebased payments 112 –
tax credit in the statement of changes in equity 193 123
deferred taxation
2013
£m
2012
£m
accelerated capital allowances 175 229
revaluation of derivatives to fair value 23 24
pension benefit obligations 151 88
sharebased payments 280 158
other temporary differences 29 29
40 154
the deferred tax movement in the year is as follows
 2013
£m
 2012
£m
at january 2012 154 234
charged to the income statement
 accelerated capital allowances 54 58
 revaluation of derivatives to fair value 09 03
 pension benefit obligations 95 20
 sharebased payments 10 22
 other temporary differences – 18
recognised in the statement of comprehensive income 42 45
recognised in the statement of changes in equity 112 –
disposal of subsidiaries – 10
at january 2013 40 154
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
71
business reports consolidated accounts
7 taxation continued
no recognition has been made of the following deferred tax assets
gross
value
unrecognised
deferred 
tax
gross
value
unrecognised
deferred 
tax
2013
£m
2013
£m
2012
£m
2012
£m
property development trading losses –– 54 14
capital losses 830 191 885 221
830 191 939 235
the benefit of unrecognised capital losses will only accrue if taxable profits are realised on future disposals of the 
group’s capital assets
8 dividends
2013
£m
2012
£m
amounts recognised as distributions to equity holders in the year
final dividend for the year to 28 january 2012 of 625p 2011 53p per share 997 895
interim dividend for the year to 26 january 2013 of 31p 2012 275p per share 480 456
1477 1351
proposed final dividend for the year to 26 january 2013 of 74p 2012 625p per share 1135 1000
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not 
been included as a liability in these financial statements  the trustee of the esot has waived dividends paid in the 
year on the shares held by the esot
9 earnings per share
2013 2012
basic earnings per share
 continuing operations 3201p 2579p
 discontinued operations – 241p
 total 3201p 2820p
 underlying basic earnings per share 2977p 2554p
basic earnings per share is based on the profit for the year attributable to the equity holders of the parent company 
and the weighted average number of shares ranking for dividend less the weighted average number of shares 
held by the esot during the period
underlying earnings per share is based on profit before the exceptional items described in note 6 annual report and accounts january 2013
72
9 earnings per share continued
2013 2012
diluted earnings per share
 continuing operations 3117p 2516p
 discontinued operations – 235p
 total 3117p 2751p
 underlying diluted earnings per share 2899p 2491p
diluted earnings per share is based on the weighted average number of shares used for the calculation of basic 
earnings per share as increased by the dilutive effect of potential ordinary shares  dilutive shares arise from 
employee share option schemes where the exercise price is less than the average market price of the company’s 
ordinary shares during the period  their dilutive effect is calculated on the basis of the equivalent number of nil
cost options  where the option price is above the average market price the option is not dilutive and is excluded 
from the diluted eps calculation  there were no such share options in the current year 2012 nil
2013 2012
fully diluted earnings per share
 continuing operations 3019p 2409p
 discontinued operations – 225p
 total 3019p 2634p
 underlying fully diluted earnings per share 2808p 2385p
fully diluted earnings per share is based on the weighted average number of shares used for the calculation of 
basic earnings per share increased by the weighted average total employee share options outstanding during 
the period  fully diluted earnings per share is used for the purposes of the share matching plan described further 
in the remuneration report
the table below shows the key variables used in the earnings per share calculations
2013
£m
2012
£m
profit after tax attributable to equity holders of the parent company
 continuing operations 5087 4343
 discontinued operations – 406
 total 5087 4749
 less exceptional items see note 6 355 448
 total underlying profit for underlying eps 4732 4301
weighted average number of shares millions
 weighted average shares in issue 1649 1743
 weighted average shares held by esot 60 59
 weighted average shares for basic eps 1589 1684
 weighted average dilutive potential shares 43 43
 weighted average shares for diluted eps 1632 1727
 weighted average shares for basic eps 1589 1684
 weighted average total share options outstanding 96 119
 weighted average shares for fully diluted eps 1685 1803
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
73
business reports consolidated accounts
10 property plant  equipment
freehold
property
£m
leasehold
property
£m
plant and
fittings
£m
total
£m
cost
at january 2011 743 83 13526 14352
exchange movement – – 02 02
additions – – 1261 1261
disposals 08 – 289 297
disposal of subsidiaries – – 476 476
at january 2012 735 83 14020 14838
exchange movement – – 13 13
additions 02 – 814 816
disposals 42 – 238 280
at january 2013 695 83 14583 15361
depreciation
at january 2011 83 14 8331 8428
exchange movement – – 01 01
provided during the year – – 1188 1188
impairment charge – – 14 14
disposals 01 – 232 233
disposal of subsidiaries – – 377 377
at january 2012 82 14 8923 9019
exchange movement – – 11 11
provided during the year – – 1164 1164
impairment charge – – 18 18
disposals 02 – 200 202
at january 2013 80 14 9894 9988
carrying amount
at january 2013 615 69 4689 5373
at january 2012 653 69 5097 5819
at january 2011 660 69 5195 5924
the carrying amount of plant and fittings above includes an amount of £03m 2012 £04m in respect of assets 
held under finance lease contracts
at 26 january 2013 the group had entered into contractual commitments for the acquisition of property plant 
and equipment amounting to £154m 2012 £95m annual report and accounts january 2013
74
11 intangible assets
brand 
names  
trademarks
£m
customer 
relationships
£m
goodwill
£m
total
£m
cost
at january 2011 january 2012 and january 2013 40 20 441 501
amortisation and impairment
at january 2011 09 11 16 36
provided during the year 04 05 – 09
at january 2012 13 16 16 45
provided during the year 04 04 – 08
at january 2013 17 20 16 53
carrying amount
at january 2013 23 – 425 448
at january 2012 27 04 425 456
at january 2011 31 09 425 465
customer relationships relates to contractual and other arrangements with corporate customers of lipsy that 
existed at the date of acquisition
the carrying amount of goodwill is allocated to the following cash generating units
2013
£m
2012
£m
next sourcing 305 305
lipsy 120 120
425 425
goodwill is tested for impairment at the balance sheet date on the basis of value in use  as this exceeded carrying 
value for each of the cash generating units concerned no impairment loss was recognised 2012 £nil
next sourcing
the key assumptions in the calculation are the future sourcing requirements of the group and the ability of next 
sourcing to meet these requirements based on past experience  in assessing value in use the most recent financial 
results and internal budgets for the next year were used and extrapolated for four further years with no subsequent 
growth assumed and discounted at 10 2012 10
lipsy
in assessing the recoverable amount of goodwill and intangibles the five year business plan for lipsy was used 
and cash flows beyond this period extrapolated using a growth rate of 2 2012 2 and discounted at 15 
2012 15  the key assumption is the net contribution margin from sales
for both next sourcing and lipsy the calculated value in use significantly exceeded the carrying value of the 
goodwill and other intangible assets and no further sensitivity calculations were necessary to conclude that there 
was no impairment
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
75
business reports consolidated accounts
12 interests in associates and other investments
2013
£m
2012
£m
interests in associates 62 61
other investments 10 10
72 71
during the year the group sold goods and services in the normal course of business to its associated undertakings 
as follows
sales
amounts 
receivable
2013
£m
2012
£m
2013
£m
2012
£m
choice discount stores limited 56 48 04 07
cotton traders limited 69 55 04 05
125 103 08 12
13 inventories
2013
£m
2012
£m
merchandise stocks 3318 3660
property development stocks – 59
3318 3719
14 customer and other receivables
2013
£m
2012
£m
directory customer receivables 7266 6869
less allowance for doubtful debts 1254 1134
6012 5735
other trade receivables 212 238
less allowance for doubtful debts 02 03
6222 5970
amounts due from associated undertakings 08 12
other debtors 83 104
prepayments 868 905
7181 6991
no interest is charged on directory customer receivables if the statement balance is paid in full otherwise balances 
bear interest at a variable annual percentage rate of 2599 2012 2599  
expected irrecoverable amounts on overdue balances are provided for based on past default experience  
receivables which are impaired other than by age or default are separately identified and provided for as 
necessary
the credit quality of customer receivables that are neither past due nor impaired is assessed by reference to the 
historical default rate for the preceding 365 days of approximately 1 2012 1 although default rates over 
shorter periods may show significant variations
other debtors and prepayments do not include impaired assets  the maximum exposure to credit risk at the 
reporting date is the carrying value of each class of asset  the group does not hold any collateral over these 
balances annual report and accounts january 2013
76
14 customer and other receivables continued
ageing of customer and other trade receivables
2013
£m
2012
£m
not past due 6097 5803
0–30 days past due 400 377
30–60 days past due 92 108
60–90 days past due 35 45
90–120 days past due 22 29
over 120 days past due 639 564
otherwise impaired 193 181
total customer and other trade receivables 7478 7107
movement in the allowance for doubtful debts
2013
£m
2012
£m
opening position 1137 1088
 charged to the income statement 283 299
 written off as uncollectible 117 199
 recovered during the year 47 33
 disposal of subsidiaries – 18
closing position 1256 1137
15 other financial assets
2013 2012
current
£m
non
current
£m
current
£m
non
current
£m
foreign exchange contracts 108 – 125 –
interest rate derivatives 108 309 – 446
216 309 125 446
foreign exchange contracts comprise forward contracts and options the majority of which are used to hedge 
exchange risk arising from the group’s overseas purchases note 27  these instruments are primarily for us dollars 
and euros  interest rate derivatives relate to the corporate bonds note 20
16 cash and short term deposits
2013
£m
2012
£m
cash at bank and in hand 421 458
short term deposits 942 106
1363 564
cash at bank earns interest at floating rates based on daily bank deposit rates  short term deposits are made for 
varying periods of between one day and three months depending on the cash requirements of the group and 
earn interest at market short term deposit rates
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
77
business reports consolidated accounts
17 bank loans and overdrafts
2013
£m
2012
£m
bank overdrafts and overnight borrowings 54 76
unsecured bank loans – –
54 76
bank overdrafts are repayable on demand and bear interest at a margin over bank base rates  overnight 
borrowings and unsecured bank loans bear interest at a margin above libor  the group has medium term bank 
facilities of £300m 2012 £300m committed until december 2016  none of this facility was drawn down at 26 
january 2013 or 28 january 2012
18 trade payables and other liabilities
2013 2012
current
£m
non
current
£m
current
£m
non
current
£m
trade payables 1892 – 1931 –
other taxation and social security 640 – 616 –
deferred revenue from sale of gift cards 657 – 609 –
property lease incentives received 272 1907 221 1889
sharebased payment liability 178 139 151 106
other creditors and accruals 1732 51 1921 53
finance leases 01 03 01 04
5372 2100 5450 2052
trade payables do not bear interest and are generally settled on 30 day terms  other creditors and accruals do 
not bear interest  property lease incentives are classified as noncurrent to the extent that they will be credited to 
the income statement more than one year from the balance sheet date
19 other financial liabilities
2013 2012
current
£m
non
current
£m
current
£m
non
current
£m
foreign exchange contracts 08 – 26 –
interest rate derivatives 34 – – 44
own equity share purchase contracts 833 – 844 –
875 – 870 44
foreign exchange contracts comprise forward contracts and options the majority of which are used to hedge 
exchange risk arising from the group’s overseas purchases note 27  these instruments are primarily for us dollars 
and euros  interest rate derivatives relate to the corporate bonds note 20  
own equity share purchase contracts relate to liabilities of £423m 2012 £636m arising under contingent 
purchase contracts and an irrevocable closed season buyback agreement for the purchase of the company’s 
own shares note 23 and net liabilities of £410m 2012 £208m arising under contingent purchase contracts for 
the company’s own shares entered into by the esot note 26 annual report and accounts january 2013
78
20 corporate bonds
balance sheet 
value nominal value
2013
£m
2012
£m
2013
£m
2012
£m
corporate bond 525 repayable 2013 876 899 855 855
corporate bond 5875 repayable 2016 2185 2188 2126 2126
corporate bond 5375 repayable 2021 3483 3434 3250 3250
6544 6521 6231 6231
the 525 2013 corporate bond is repayable in september 2013 and has therefore been classified as a current 
liability at 26 january 2013  the 2016 and 2021 bonds are classified as noncurrent liabilities
the group uses interest rate derivatives to manage the interest rate risk associated with its bonds  interest on 
£3105m of the group’s bonds has been swapped into floating rates based on libor and the remaining £3126m 
is at fixed rates
2013
nominal
value
£m
2013
effective
interest
rate
2012
nominal
value
£m
2012
effective
interest
rate
2013 bonds
floating 855 6m libor  09 855 6m libor  09
2016 bonds
fixed 1626 5875 1626 5875
floating 500 6m libor 17 500 6m libor 17
2126 2126
2021 bonds
fixed 1500 5375 1500 5375
floating 1750 6m libor  19 1750 6m libor  19
3250 3250
total 6231 6231
the fair values of the corporate bonds are shown in note 29
in the prior year the company issued £325m of new 10 year 2021 bonds and redeemed £1208m of its 2013 bonds 
and £374m of its 2016 bonds  holders of the 2013 and 2016 bonds were invited to tender their holdings either for 
cash or in exchange for the new 10 year issue  the transactions were settled on a net basis and the amount shown 
in the cash flow statement of £1533m represents the net cash received
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
79
business reports consolidated accounts
21 pension benefits
the group operates a pension plan in the uk which consists of defined benefit and defined contribution sections  
the assets of the plan are held in a separate trustee administered fund  the plan has equal pension rights with 
respect to members of either sex and complies with the employment equality regulations 2006  the defined 
benefit section was closed to new members in 2000 and is a funded arrangement which provides benefits based 
on pensionable earnings  the group also provides unfunded retirement benefits to plan members whose benefits 
would otherwise be restricted by the lifetime allowance
in june 2012 the plan purchased a second buyin contract for £234m in respect of pensions which had come 
into payment since the first buyin in 2010  the contract allows for the transaction to be converted to a buyout 
following which the insurance company would become directly responsible for the pension payments and it is 
intended to proceed on this basis  accordingly the transaction has been accounted for as a settlement and the 
accounting charge of £63m is included in the income statement as an exceptional item
from november 2012 the future accrual of benefits for remaining employee members is based on pensionable 
earnings frozen at that time rather than final earnings  those employees receive either additional contributions 
to the defined contribution section or a salary supplement  this change resulted in an accounting gain in the 
current year of £421m which is included in the income statement as an exceptional item
the defined contribution section is for all members who joined after 2000 and benefits are based on each individual 
member’s personal account  the group has also made arrangements for autoenrolment and contributions 
commenced in february 2013  
the components of the net benefit expense recognised in the consolidated income statement are as follows
2013 2012
funded
£m
unfunded
£m
total
£m
funded
£m
unfunded
£m
total
£m
current service cost 79 05 84 87 05 92
interest cost on benefit obligation 241 04 245 250 04 254
expected return on plan assets 284 – 284 321 – 321
curtailment gain on pensionable pay 
freeze† 393 28 421 –––
settlement loss on buyinbuyout† 63 – 63 –––
net benefit creditexpense 
– continuing operations 294 19 313 16 09 25
discontinued operations 
curtailment gain on sale of ventura ––– 15 – 15
actual return on plan assets 683 – 683 343 – 343
† included as exceptional items in the income statement see note 6 annual report and accounts january 2013
80
21 pension benefits continued
changes in the present value of defined benefit pension obligations are analysed as follows
funded
£m
2013 
unfunded
£m
total
£m
funded
£m
2012 
unfunded
£m
total
£m
opening obligation 4956 94 5050 4439 75 4514
current service cost 79 05 84 87 05 92
interest cost 241 04 245 250 04 254
curtailment gains 393 28 421 15 – 15
employee contributions 02 – 02 02 – 02
benefits paid 124 – 124 104 – 104
actuarial losses 586 10 596 297 10 307
closing pension benefit obligation 5347 85 5432 4956 94 5050
changes in the fair value of defined benefit pension assets were as follows
funded
£m
2013 
unfunded
£m
total
£m
funded
£m
2012
 unfunded
£m
total
£m
opening assets 5401 – 5401 5071 – 5071
employer contributions 189 – 189 89 – 89
employee contributions 02 – 02 02 – 02
benefits paid 124 – 124 104 – 104
settlements buyin contract 63 – 63 –––
expected return on assets 284 – 284 321 – 321
actuarial gains 399 – 399 22 – 22
closing pension benefit assets 6088 – 6088 5401 – 5401
the fair value of plan assets was as follows
2013 2012
£m  £m 
equities 2968 487 2232 413
bonds 1007 165 629 116
gilts 356 58 620 115
property 211 35 198 37
insurance contracts 1469 241 1148 213
other cash deposits 77 14 574 106
6088 1000 5401 1000
the net defined benefit pension assetliability is analysed as follows
funded
£m
2013 
unfunded
£m
total
£m
funded
£m
2012
 unfunded
£m
total
£m
total assets 6088 – 6088 5401 – 5401
benefit obligation 5347 85 5432 4956 94 5050
net pension assetliability 741 85 656 445 94 351
the ias 19 valuation of the defined benefit section was undertaken by an independent qualified actuary as at 26 
january 2013 using the projected unit credit method  as a substantial majority of pensions in payment are now 
insured this year we have adopted separate assumptions for pensioner and nonpensioner liabilities  changes 
in the assumptions for pensioner members covered by insurance which now represent approximately 27 of the 
gross pension liabilities have a neutral effect on the net ias 19 balance sheet position  
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
81
business reports consolidated accounts
21 pension benefits continued 
the principal actuarial assumptions used in the valuation were as follows
pensioners
2013
non
pensioners
2013 2012
discount rate 425 475 500
salary increases na nil 310
inflation – rpi 330 345 310
inflation – cpi 230 245 210
2013 2012
life expectancy at age 65 years
 pensioner aged 65 – male 226 225
 pensioner aged 65 – female 250 249
 nonpensioner aged 45 – male 248 247
 nonpensioner aged 45 – female 273 272
expected rate of return on assets
 equities na 695
 bonds na 395
 gilts na 265
 property na 555
 insurance contracts na 500
 other na 265
 average na 518
the adoption of ias 19 revised from the beginning of the 201314 financial year means that it is not necessary to 
set assumptions for expected asset returns as at 26 january 2013
expected rates of return on plan assets are based on external historical and forecast market information and 
actual rates will most likely vary from those shown above  the key sensitivity in the calculation is the discount rate  
a decrease of 025 in the discount rates used would increase the gross liabilities by approximately £29m which 
would be partly mitigated by an increase of approximately £5m on the insurance assets
members of the defined benefit section contribute 3 or 5 of pensionable earnings whilst the company currently 
makes contributions at the rate of 175  the most recent full actuarial valuation was undertaken as at march 
2010  the next full actuarial valuation will be performed as at march 2013 and future funding requirements will be 
determined taking into account recent plan changes  members of the defined contribution section contribute 3 
or 5 of pensionable earnings which is matched by the company
total employer contributions of £243m 2012 £131m were made during the year including a special contribution 
of £11m in respect of the buyin and £54m 2012 £42m in respect of the defined contribution section
history of experience gains and losses
 2013
 £m
2012
£m
2011
£m
2010
£m
2009
£m
fair value of plan assets 6088 5401 5071 4328 3258
present value of defined benefit obligation 5432 5050 4514 4823 3949
surplusdeficit in the plan 656 351 557 495 691
experience gainslosses on plan liabilities 42 33 190 01 190
experience gainslosses on plan assets 399 22 112 524 938
at january 2013 cumulative actuarial losses recognised in the statement of comprehensive income since transition 
to ifrs at 1 february 2004 were £438m 2012 losses of £241m  it is not possible to determine the actuarial gains 
or losses that would have been recognised prior to transition annual report and accounts january 2013
82
22 provisions
vacant 
property 
costs
£m
at january 2012 120
 provisions made in the year 74
 utilisation of provisions 52
 release of provisions 35
 unwind of discount 05
at january 2013 112
provision is made for the committed cost of future rentals or estimated exit costs of properties no longer occupied 
by the group the average remaining lease term is four years 2012 three years
23 share capital
2013
 shares 
‘000
2012
shares 
‘000
2013
£m
2012
£m
allotted called up and fully paid
ordinary shares of 10p each
at january 2012 168740 181221 169 181
shares issued 4 – – –
purchased for cancellation 7510 12481 08 12
at january 2013 161234 168740 161 169
the table below shows the movements in equity from share purchases and commitments during the year
2013 2012
shares
‘000 £m
shares
‘000 £m
shares purchased for cancellation in the year 7510 2413 12481 2897
less commitment at start of year 2425 636 1400 303
add commitment at end of year 1050 423 2425 636
amount shown in statement of changes in equity 2200 3230
of the £636m commitment outstanding at january 2012 £160m was fulfilled in the current year and £476m was 
not fulfilled and expired
at 20 march 2013 all £423m of the january 2013 commitment was unfulfilled and had expired and was therefore 
subsequently credited back to equity
24 other reserves
other reserves in the consolidated balance sheet comprise the reserve created on reduction of share capital 
through the scheme of arrangement under section 425 of the companies act 1985 £14607m less share 
premium account £38m and capital redemption reserve £37m at the time of the capital reconstruction 
in 2002 plus the accumulated amount of goodwill arising on acquisition after taking into account subsequent 
disposals £07m less the unrealised component of revaluations of properties arising under previous accounting 
standards £51m as at the date of transition to ifrs
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
83
business reports consolidated accounts
25 equity settled sharebased payments
the group operates a number of sharebased payment schemes as set out in the remuneration report on pages 
45 and 46 and below
management and sharesave options
the following table summarises the movements in management and sharesave options during the year
 2013 2012
no  of 
options
weighted
average
exercise
price
 no  of
options
weighted
average
exercise
price
outstanding at beginning of year 9219193 £1767 12504404 £1466
granted 2069776 £2910 2773077 £2073
exercised 2933737 £1475 5447415 £1242
forfeited 403435 £2157 610873 £1672
outstanding at end of year 7951797 £2152 9219193 £1767
exercisable at end of year 1259065 £1598 1410373 £1674
options were exercised on a regular basis throughout the year and the weighted average share price during 
this period was £3154 2012 £2407  options outstanding at 26 january 2013 are exercisable at prices ranging 
between £889 and £2967 2012 £889 and £2189 and have a weighted average remaining contractual life of 
63 years 2012 65 years as analysed below 
2013 2012
no  of 
options 
weighted 
average 
remaining 
contractual
life years
no  of 
options
weighted 
average 
remaining 
contractual
life years
exercise price range 
£889 – £1399 1005713 42 3176646 62
£1412 – £1782 705784 21 1183255 27
£2070 1834505 82 1985360 92
£2084 – £2189 2421024 58 2873932 66
£2756 – £2967 1984771 76 ––
7951797 63 9219193 65
share matching plan
the following table summarises the movements in nil cost share matching plan options during the year
2013
no  of 
options 
2012
no  of 
options
outstanding at beginning of year 679232 383772
granted 61004 314092
forfeited 65190 18632
outstanding at end of year 675046 679232
the weighted average remaining contractual life of these options is 80 years 2012 88 years  there were no 
exercises of share matching plan options during the current or prior year and none were exercisable at the end 
of the current or prior year annual report and accounts january 2013
84
25 equity settled sharebased payments continued
fair value calculation
the fair value of management sharesave and share matching plan options granted is calculated at the date of 
grant using a black–scholes option pricing model  expected volatility was determined by calculating the historical 
volatility of the company’s share price over a period equivalent to the expected life of the option  the expected life 
applied in the model is based on historical analyses of exercise patterns taking into account any early exercises
the following table lists the inputs to the model used for options granted in the years ended 26 january 2013 and 
28 january 2012 based on information at the date of grant
management share options 2013 2012
weighted average share price at date of grant £2967 £2070
weighted average exercise price £2967 £2070
volatility 379 414
expected life 4 years 4 years
risk free rate 070 237
dividend yield 271 348
weighted average fair value per option £712 £551
sharesave plans 2013 2012
weighted average share price at date of grant £3444 £2605
weighted average exercise price £2756 £2084
volatility 254 344
expected life 33 years 33 years
risk free rate 046 096
dividend yield 261 299
weighted average fair value per option £804 £723
share matching plan 2013 2012
weighted average share price at date of grant £3032 £2237
weighted average exercise price nil nil
volatility 260 414
expected life 3 years 3 years
risk free rate 063 159
dividend yield 297 349
weighted average fair value per option £2774 £2015
26   shares held by esot
the next 2003 employee share ownership trust “esot” has an independent professional trustee resident in 
jersey and provides for the issue of shares to group employees including share issues under share options at 
the discretion of the trustee  all management and sharesave options which were exercised during the year were 
satisfied by shares issued from the esot
at 26 january 2013 the esot held 6531837 2012 5637388 ordinary shares of 10p each in the company the 
market value of which amounted to £2651m 2012 £1488m  details of outstanding share options are shown in 
note 25
the consideration paid for the ordinary shares of 10p each in the company held by the esot at 26 january 2013 
and 28 january 2012 has been shown as an esot reserve and presented within equity for the company and the 
group  all other assets liabilities income and costs of the esot have been incorporated into the accounts of the 
company and the group
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
85
business reports consolidated accounts
26 shares held by esot continued
the table below shows the movements in equity from esot share purchases and commitment movements during 
the year
2013 2012
shares
‘000
cost
£m
shares
‘000
cost
£m
shares purchased by esot in the year 3859 1225 4685 1077
less commitment at start of year 825 200 725 154
add commitment at end of year 1062 410 825 200
amount shown in statement of changes in equity 1435 1123
shares issued on option exercises 2965 443 5440 676
of the £200m commitment at january 2012 £73m was fulfilled in the current year and £127m was not fulfilled 
and expired
at 20 march 2013 £63m of the commitment at january 2013 had been fulfilled £108m remained open for 
potential completion and £239m was unfulfilled and had expired and was therefore subsequently credited back 
to equity  at 19 march 2013 employee share options over 121720 shares had been exercised subsequent to the 
balance sheet date and had been satisfied by ordinary shares issued by the esot
27   financial instruments risk management and hedging activities
next operates a centralised treasury function which is responsible for managing the liquidity interest and foreign 
currency risks associated with the group’s activities  as part of its strategy for the management of these risks the 
group uses derivative financial instruments  in accordance with the group’s treasury policy derivative instruments 
are not entered into for speculative purposes  treasury policy is reviewed and approved by the board and specifies 
the parameters within which treasury operations must be conducted including authorised counterparties instrument 
types and transaction limits and principles governing the management of liquidity interest and foreign currency risks
the group’s principal financial instruments other than derivatives are cash and short term deposits bank 
overdrafts and loans and corporate bonds  the main purpose of these financial instruments is to raise finance 
for the group’s operations  in addition the group has various other financial assets and liabilities such as trade 
receivables and trade payables arising directly from its operations
liquidity risk
the group manages its cash and borrowing requirements centrally to minimise net interest expense within 
risk parameters agreed by the board whilst ensuring that the group has sufficient liquid resources to meet the 
operating needs of its businesses  the forecast cash and borrowings profile of the group is monitored to ensure 
that adequate headroom remains under committed borrowing facilities
the table below shows the maturity analysis of the undiscounted remaining contractual cash flows including 
interest of the group’s financial liabilities
2013
less than 
1 year
£m
1 to 2 
years
£m
2 to 5 
years
£m
over 
5 years
£m
total
£m
bank loans and overdrafts 54 – – – 54
trade and other payables 3455 25 – – 3480
finance lease liabilities 01 01 02 – 04
corporate bonds 1200 300 2900 3949 8349
other liabilities 833 – – – 833
5543 326 2902 3949 12720
derivatives net settled 130 45 118 113 406
derivatives gross settled
 cash inflows 7879 509 – – 8388
 cash outflows 7725 493 – – 8218
total cash flows 5259 265 2784 3836 12144 annual report and accounts january 2013
86
27 financial instruments risk management and hedging activities continued
2012
less than 
1 year
£m
1 to 2 
years
£m
2 to 5 
years
£m
over 
5 years
£m
total
£m
bank loans and overdrafts 76 – – – 76
trade and other payables 3735 – – – 3735
finance lease liabilities 01 01 03 – 05
corporate bonds 344 1200 3025 4123 8692
other liabilities 844 – 07 – 851
5000 1201 3035 4123 13359
derivatives net settled 116 106 103 104 429
derivatives gross settled
 cash inflows 8192 – – – 8192
 cash outflows 8100 – – – 8100
total cash flows 4792 1095 2932 4019 12838
at 26 january 2013 the group had borrowing facilities of £300m 2012 £300m in respect of which all conditions 
precedent have been met and which are committed to december 2016 2012 december 2016  none of this 
facility was drawn down at 26 january 2013 2012 £nil
interest rate risk
the group is exposed to fair value interest rate risk on its fixed rate corporate bonds and cash flow interest rate risk 
on floating rate bank loans and overdrafts  the forecast cash and borrowings profile of the group is monitored 
regularly to assess the mix of fixed and variable rate debt and the group uses interest rate derivatives where 
appropriate to reduce its exposure to changes in interest rates and the economic environment  
interest rates fair value hedges
the group has interest rate swap agreements in place as fair value hedges of part of the interest rate risk associated 
with the company’s corporate bonds  under the terms of the swaps which have the same key features as the 
bonds the group receives a fixed rate of interest equivalent to the relevant coupon rate and pays a variable rate  
details of the effective rates payable are given in note 20  
the fair values of the group’s interest rate swaps including accrued interest are as follows
2013
£m
2012
£m
derivatives in designated fair value hedging relationships 340 314
other interest rate derivatives 43 88
total interest rate derivatives 383 402
other interest rate derivatives relate to economic hedges of variable rate interest payments due under swaps 
relating to the 2013 corporate bond which are not able to be hedge accounted for under ias 39
the fair values of derivatives have been calculated by discounting the expected future cash flows at prevailing 
interest rates and are based on market prices at the balance sheet date
foreign currency risk
the group’s principal foreign currency exposures arise from the purchase of overseas sourced products  group 
policy allows for these exposures to be hedged for up to 24 months ahead in order to fix the cost in sterling  this 
hedging activity involves inter alia the use of spot forward and option contracts
the market value of outstanding foreign exchange contracts is reported regularly at board level and reviewed 
in conjunction with percentage cover taken by season and current market conditions in order to assess and 
manage the group’s ongoing exposure
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
87
business reports consolidated accounts
27 financial instruments risk management and hedging activities continued
the group does not have a material exposure to currency movements in relation to translation of overseas 
investments and consequently does not hedge any such exposure  the group’s net exposure to foreign currencies 
taking hedging activities into account is illustrated by the sensitivity analysis in note 30
foreign currency cash flow hedges
the fair values of foreign exchange derivatives are as follows
2013
£m
2012
£m
derivatives in designated hedging relationships 83 115
other foreign exchange derivatives 17 16
total foreign exchange derivatives 100 99
the total notional amount of outstanding foreign exchange contracts at the balance sheet date is as follows
2013
£m
2012
£m
us dollar 7703 7275
euro 641 903
other 44 –
8388 8178
credit risk
investments of cash surpluses borrowings and derivative instruments are made through banks and companies 
which must fulfil credit rating and investment criteria approved by the board  concentrations of risk are mitigated 
by the use of various counterparties at any one time  all customers who wish to trade on credit terms are subject 
to credit verification procedures  receivable balances are monitored on an ongoing basis and provision is made 
for estimated irrecoverable amounts  the concentration of credit risk is limited due to the directory customer base 
being large and diverse  the group’s outstanding receivables balances are detailed in note 14
capital risk
the capital structure of the group consists of debt as analysed in note 31 and equity attributable to the equity 
holders of the parent company comprising issued capital reserves and retained earnings as shown in the 
consolidated statement of changes in equity  the group manages its capital with the objective that all entities 
within the group continue as going concerns while maintaining an efficient structure to minimise the cost of 
capital  the group is not restricted by any externally imposed capital requirements
as part of its strategy for delivering sustainable long term growth in earnings per share the group has been returning 
capital to shareholders by way of share buybacks in addition to dividends  share buybacks are transacted through 
both onmarket purchases and contingent contracts for offmarket share purchases annual report and accounts january 2013
88
28 financial instruments categories
2013
£m
2012
£m
financial assets
 derivatives at fair value through profit and loss – held for trading 100 138
 derivatives in designated hedging relationships 425 433
 loans and receivables 6308 6084
 cash and short term deposits 1363 564
 available for sale financial assets 10 10
financial liabilities
 derivatives at fair value through profit and loss – held for trading 40 66
 derivatives in designated hedging relationships 02 04
 corporate bonds 6544 6521
 amortised cost 4367 4662
 finance lease obligations 04 05
all derivatives are categorised as level 2 under the requirements of ifrs 7 as they are valued using techniques 
based significantly on observed market data
29 financial instruments fair values
the fair values of each category of the group’s financial instruments are the same as their carrying values in the 
group’s balance sheet other than as noted below
 2013 2012
carrying
amount
£m
fair value
£m
carrying
amount
£m
fair value
£m
corporate bonds
in hedging relationships 3418 3478 3395 3285
not in hedging relationships 3126 3588 3126 3360
6544 7066 6521 6645
the fair values of corporate bonds are their market values at the balance sheet date  market values include 
accrued interest and changes in credit risk and interest rate risk and are therefore different to the reported carrying 
amounts
notes to the consolidated financial statements additional information parent company accounts governance
annual report and accounts january 2013
89
business reports consolidated accounts
30  financial instruments sensitivity analysis
foreign currency sensitivity analysis
the group’s principal foreign currency exposures are to us dollars and the euro  the table below illustrates the 
hypothetical sensitivity of the group’s reported profit and closing equity to a 10 increase and decrease in the 
us dollarsterling and eurosterling exchange rates at the year end date assuming all other variables remain 
unchanged  the sensitivity rate of 10 represents the directors’ assessment of a reasonably possible change 
based on historic volatility
the analysis assumes that exchange rate fluctuations on currency derivatives that form part of an effective cash 
flow hedge relationship affect the fair value reserve in equity and the fair value of the hedging derivatives  for 
foreign exchange derivatives which are not designated hedges movements in exchange rates impact the income 
statement
positive figures represent an increase in profit or equity
income statement equity
2013
£m
2012
£m
2013
£m
2012
£m
sterling strengthens by 10
us dollar 128 113 412 390
euro 08 23 21 57
sterling weakens by 10
us dollar 08 80 365 355
euro 10 12 19 41
year end exchange rates applied in the above analysis are us dollar 158 2012 157 and euro 117 2012 119  
strengthening and weakening of sterling may not produce symmetrical results depending on the proportion and 
nature of foreign exchange derivatives which do not qualify for hedge accounting
interest rate sensitivity analysis
the table below illustrates the hypothetical sensitivity of the group’s reported profit and closing equity to a 05 
increase or decrease in interest rates assuming all other variables were unchanged  the sensitivity rate of 05 
represents the directors’ assessment of a reasonably possible change based on historic volatility
the analysis has been prepared using the following assumptions
 ❚ for floating rate assets and liabilities the amount of asset or liability outstanding at the balance sheet date is 
assumed to have been outstanding for the whole year
 ❚ fixed rate financial instruments that are carried at amortised cost are not subject to interest rate risk for the 
purpose of this analysis
positive figures represent an increase in profit or equity
income statement equity
2013
£m
2012
£m
2013
£m
2012
£m
interest rate increase of 05 10 13 10 13
interest rate decrease of 05 10 13 10 13 annual report and accounts january 2013
90
31   analysis of net debt
january
2012
£m
cash flow
£m
other 
noncash
changes
£m
january
2013
£m
cash and short term deposits 564 1363
overdrafts 76 54
cash and cash equivalents 488 822 01 1309
corporate bonds 6521 – 23 6544
fair value hedges of corporate bonds 291 – 22 313
finance leases 05 01 – 04
total net debt 5747 823 02 4926
32   operating lease commitments
future minimum rentals payable under noncancellable operating leases where the group is the lessee
2013
£m
2012
£m
within one year 2168 2075
in two to five years 7785 7567
over five years 8399 8210
18352 17852
at 26 january 2013 future rentals receivable under noncancellable subleases where the group is the lessor were 
£234m 2012 £390m
the group has entered into operating leases in respect of vehicles equipment warehouses office equipment and 
retail stores  these noncancellable leases have remaining terms of between 1 month and approximately 20 years  
contingent rentals are payable on certain retail store leases based on store revenues  the majority of the group’s 
operating leases provide for their renewal by mutual agreement at the expiry of the lease term
additional information on the group’s leasing commitments as at 26 january 2013 is detailed in the table below
minimum 
lease
payments
£m
less
sublease
income
£m
net total
£m
year to january 2012 actual 2068 62 2006
year to january 2013 actual 2084 54 2030
year to january 2014 2168 39 2129
year to january 2015 2108 35 2073
year to january 2016 2022 32 1990
year to january 2017 1920 29 1891
year to january 2018 1735 27 1708
subtotal 5 years to january 2018 9953 162 9791
5 years from february 2018 to january 2023 5871 67 5804
10 years from february 2023 to january 2033 2442 05 2437
2033 and beyond 86 – 86
total future obligations 18352 234 18118
notes to the consolidated financial statements additional information governance consolidated accounts
annual report and accounts january 2013
91
business reports parent company accounts
notes
2013
£m
2012
£m
assets and liabilities 
noncurrent assets
investments in subsidiaries c2 24757 24757
other financial assets c3 309 446
25066 25203
current assets
trade and other receivables 63 74
current tax asset 41 55
other financial assets c3 108 –
cash and short term deposits 962 106
1174 235
total assets 26240 25438
current liabilities
corporate bonds c4 876 –
trade payables and other liabilities c4 2977 2474
other financial liabilities c4 867 844
4720 3318
noncurrent liabilities
corporate bonds c4 5668 6521
other financial liabilities – 44
5668 6565
total liabilities 10388 9883
net assets 15852 15555
total equity 15852 15555
approved by the board on 21 march 2013
lord wolfson of aspley guise
director
david keens
director
company balance sheet
as at 26 january annual report and accounts january 2013
92
share
capital
£m
share
premium
account
£m
capital
redemp
tion
reserve
£m
esot
reserve
£m
other
reserves
£m
retained
earnings
£m
tot al 
equity
£m
at january 2011 181 08 118 1386 9852 9840 18613
profit for the year – – – – – 1791 1791
other comprehensive income for the year – – – – – – –
total comprehensive income for the year – – – – – 1791 1791
share buybacks and commitments note c5 12 – 12 – – 3230 3230
esot share purchases and commitments note c5 – – – 1123 – – 1123
shares issued by esot – – – 1098 – 422 676
share option charge – – – – – 179 179
equity dividends paid – – – – – 1351 1351
at january 2012 169 08 130 1411 9852 6807 15555
profit for the year – – – – – 4787 4787
other comprehensive income for the year – – – – – – –
total comprehensive income for the year – – – – – 4787 4787
shares issued – 01 – – – – 01
share buybacks and commitments note c5 08 – 08 – – 2200 2200
esot share purchases and commitments note c5 – – – 1435 – – 1435
shares issued by esot – – – 690 – 247 443
share option charge – – – – – 178 178
equity dividends paid – – – – – 1477 1477
at january 2013 161 09 138 2156 9852 7848 15852
company cash flow statement
for the financial year ended 26 january
2013
£m
2012
£m
cash flows from operating activities
 operating loss 01 11
 share option charge – 11
 decrease in trade and other receivables – 12
 increase in trade and other payables 694 2523
cash generated from operations 693 2535
 corporation taxes received 83 68
net cash from operating activities 776 2603
cash flows from investing activities
 dividends received 5000 2000
net cash from investing activities 5000 2000
cash flows from financing activities
 repurchase of own shares 2419 2911
 purchase of shares by esot 1230 1067
 proceeds from disposal of shares by esot 434 676
 repayment of unsecured bank loans – 1150
 net proceeds from bond issue and tender – 1533
 interest paid 230 237
 interest received 02 10
 dividends paid 1477 1351
net cash from financing activities 4920 4497
net increase in cash and cash equivalents 856 106
opening cash and cash equivalents 106 –
closing cash and cash equivalents 962 106
company statement of changes in equity
for the financial year ended 26 january additional information governance consolidated accounts
annual report and accounts january 2013
93
business reports parent company accounts
c1  accounting policies
the accounting policies adopted for the parent company next plc are the same as those used for the group 
which are set out on pages 60 to 63  as permitted by section 408 of the companies act 2006 the income 
statement of the company is not presented as part of the financial statements  the profit after taxation dealt with 
in the accounts of the holding company was £4787m 2012 profit of £1791m
c2 investments in subsidiaries
the company has taken advantage of section 4102 of the companies act 2006 to list only its principal subsidiary 
and associated undertakings at 26 january 2013  all of these are wholly owned by the company or its subsidiary 
undertakings registered in england and wales and operate predominantly in the united kingdom unless otherwise 
stated
subsidiary undertakings
next group plc intermediate holding company
next retail limited ¹ retailing of fashion and home products
next directory ² home shopping including international online
next distribution limited ¹ warehousing and distribution
lipsy limited ¹ fashion retailing
next sourcing limited ¹ overseas sourcing services hong kong
next manufacturing pvt limited ¹ garment manufacture sri lanka
associated undertakings
choice discount stores limited ¹ retailing 40
cotton traders holdings limited ¹ home shopping and retailing 33
¹ shareholdings held by subsidiary undertakings
² the trade of the next directory is carried out as a division of next retail limited
c3 other financial assets
other financial assets comprise interest rate derivatives as detailed in note 15 of the consolidated financial 
statements which are carried at their fair value
c4 current and noncurrent liabilities
details of the terms of bank overdrafts and unsecured bank loans are given in note 17  further information on the 
company’s corporate bonds is given in note 20
trade and other payables comprise £2861m 2012 £2355m of amounts due to subsidiary undertakings and £116m 
2012 £119m of other creditors and accruals  other current financial liabilities include interest rate derivatives 
carried at fair value note 19 and amounts payable under the company’s closed season buyback arrangements 
and contingent purchase contracts including those entered into by the esot for the company’s own shares  other 
noncurrent financial liabilities comprise interest rate derivative instruments carried at fair value note 19
c5 share capital esot and other reserves
details of the company’s share capital and share buybacks are given in note 23  esot transactions are detailed 
in note 26  other reserves in the company balance sheet of £9852m 2012 £9852m represent the difference 
between the market price and the nominal value of shares issued as part of the capital reconstruction on 
acquisition of next group plc which has been subject to section 131 companies act 1985 merger relief
c6 financial instruments
the company is exposed to liquidity interest rate credit and capital risks and adopts the same approach to the 
management of these risks as the group as detailed in note 27  the company is not exposed to foreign currency 
risk as it has no foreign currency assets or liabilities  
trade and other receivables primarily comprise amounts due from group companies and therefore the company’s 
exposure to credit risk is limited none of these assets are overdue or impaired
the company hedges its exposure to interest rate risk associated with its corporate bonds as detailed in notes 20 
and 27  the fair values of the company’s corporate bonds are shown in note 29 
notes to the parent company financial statements annual report and accounts january 2013
94
c6 financial instruments continued
income statement equity
2013
£m
2012
£m
2013
£m
2012
£m
interest rate increase of 05 11 14 11 14
interest rate decrease of 05 11 14 11 14
the following table shows the carrying values of the company’s financial instruments by category
2013
£m
2012
£m
financial assets
 derivatives at fair value through profit and loss – held for trading 77 132
 derivatives in designated hedging relationships 340 314
 cash and short term deposits 962 106
financial liabilities
 derivatives at fair value through profit and loss – held for trading 34 44
 corporate bonds 6544 6521
 amortised cost 3712 3318
the table below shows the maturity analysis of the undiscounted remaining contractual cash flows including 
interest of the company’s financial liabilities
2013
less than 1 
year
£m
1 to 2 
years
£m
2 to 5 
years
£m
over 5 
years
£m
total
£m
trade and other payables 2879 – – – 2879
other liabilities 833 – – – 833
corporate bonds 1200 300 2900 3949 8349
4912 300 2900 3949 12061
derivatives net settled 130 45 118 113 406
total cash flows 4782 255 2782 3836 11655
2012
less than 1 
year
£m
1 to 2 
years
£m
2 to 5 
years
£m
over 5 
years
£m
total
£m
trade and other payables 2377 – – – 2377
other liabilities 844 – – – 844
corporate bonds 344 1200 3025 4123 8692
3565 1200 3025 4123 11913
derivatives net settled 116 106 103 104 429
total cash flows 3449 1094 2922 4019 11484
c7 related party transactions
during the year the company entered into transactions in the ordinary course of business with other related 
parties as follows
2013
£m
2012
£m
transactions with subsidiary undertakings
 recharge of costs 3863 4194
 funds advancedborrowed 1643 163
 dividends received 5000 2000
 interest payable – 10
amounts due to subsidiary undertakings 2861 2355
notes to the parent company financial statements parent company accounts governance consolidated accounts
annual report and accounts january 2013
95
business reports additional information
first
half
£m
second
half
£m
year to
jan 2013
£m
first
half
£m
second
half
£m
year to
jan 2012
£m
revenue
next retail 10099 11810 21909 10082 11832 21914
next directory 5517 6409 11926 4867 6020 10887
next international retail 379 398 777 336 427 763
next sourcing 30 58 88 32 43 75
lipsy 269 312 581 227 322 549
property management 27 176 203 31 31 62
other activities 82 62 144 80 81 161
total – continuing 16403 19225 35628 15655 18756 34411
ventura discontinued ––– 648 – 648
profit before tax
next retail 1227 2084 3311 1225 2012 3237
next directory 1377 1644 3021 1128 1498 2626
next international retail 34 50 84 32 47 79
next sourcing 118 190 308 101 110 211
lipsy 05 15 20 04 17 13
property management 36 90 126 34 22 56
other activities 202 283 81 103 101 204
operating profit 2595 4356 6951 2413 3605 6018
net finance costs 145 141 286 133 90 223
total – continuing 2450 4215 6665 2280 3515 5795
ventura discontinued ––– 29 – 29
five year history
year to january 2013
 £m
2012
£m
2011
£m
2010
£m
2009
£m
continuing operations
revenue 35628 34411 32977 32609 31096
operating profit – underlying 6502 5987 5668 5238 4732
net finance costs – underlying 286 284 234 245 495
profit before taxation – underlying 6216 5703 5434 4993 4237
exceptional items pretax 449 472 – – –
ventura profit before tax discontinued – 29 80 60 51
taxation 1579 1456 1505 1413 1265
profit after taxation 5086 4748 4009 3640 3023
total equity 2856 2227 2324 1334 1405
shares purchased for cancellation 75m 125m 100m 59m 39m
dividends per share 1050p 900p 780p 660p 550p
basic earnings per share
 underlying 2977p 2554p 2219p 1885p 1560p
 total 3201p 2820p 2219p 1885p 1560p
half year and sector analysis annual report and accounts january 2013
96
this document is important and requires your immediate attention if you are in any doubt as to the action you should 
take you are recommended to seek your own personal financial advice from your stockbroker bank manager solicitor 
accountant or other financial advisor authorised under the financial services and markets act 2000
if you have sold or otherwise transferred all your next shares please send this document together with the accompanying 
form of proxy as soon as possible to the purchaser or transferee or to the stockbroker bank or other agent through whom 
the sale or transfer was effected for delivery to the purchaser or transferee
notice is given that the annual general meeting of next plc will be held at the leicester marriott hotel smith way grove park 
leicester le19 1sw on thursday 16 may 2013 at 930 am at which the following resolutions will be proposed resolutions 1 to 15 
as ordinary resolutions and 16 to 19 as special resolutions
further information on these resolutions can be found in the directors’ report and business review on pages 21 to 24 and 
in the appendix to this notice  biographies of directors seeking electionreelection are shown on page 27 of the annual 
report
1 to receive and adopt the accounts and reports of the directors and auditor for the year ended 26 january 2013
2 to approve the remuneration report for the year ended 26 january 2013
3 to declare a final dividend of 74p per share in respect of the year ended 26 january 2013
4 to reelect john barton as a director 
5 to reelect christos angelides as a director
6 to reelect steve barber as a director
7 to reelect christine cross as a director
8 to reelect jonathan dawson as a director
9 to elect caroline goodall as a director
10 to reelect david keens as a director
11 to reelect francis salway as a director
12 to reelect andrew varley as a director
13 to reelect lord wolfson as a director
14 to reappoint ernst  young llp as auditor and authorise the directors to set their remuneration
15 directors’ authority to allot shares
that
a the directors be authorised to allot equity securities as defined in section 560 of the companies act 2006 in the 
company
i in accordance with article 7 of the company’s articles of association the “articles” up to a maximum 
nominal amount of £5300000 and
ii up to a maximum nominal amount of £10600000 as reduced by any equity securities allotted under 
paragraph ai above in connection with an offer by way of a rights issue as defined in article 8 of the 
articles
b in accordance with article 7 of the articles this authority shall expire at the conclusion of the next annual general 
meeting of the company after the passing of this resolution or if earlier at the close of business on 1 august 2014 
and
c all previous unutilised authorities under section 551 of the companies act 2006 shall cease to have effect save to 
the extent that the same are exercisable pursuant to section 5517 of the companies act 2006 by reason of any 
offer or agreement made prior to the date of this resolution which would or might require shares to be allotted on or 
after that date
16 disapplication of preemption rights
 that
a in accordance with article 8 of the company’s articles of association the “articles” the directors be given power to 
allot equity securities for cash
notice of meeting parent company accounts governance consolidated accounts
annual report and accounts january 2013
97
business reports additional information
b the power under paragraph a above other than in connection with a rights issue as defined in article 8bii 
of the articles shall be limited to the allotment of equity securities having a nominal amount not exceeding in 
aggregate £806000
c in accordance with article 8 of the articles this authority shall expire at the conclusion of the next annual general 
meeting of the company after the passing of this resolution or if earlier at the close of business on 1 august 2014 
and
d all previous unutilised authorities under sections 570 and 573 of the companies act 2006 shall cease to have effect
17 onmarket purchase of own shares
that in accordance with the companies act 2006 the “act” the company be granted general and unconditional 
authority to make market purchases as defined in section 693 of the act of any of its own ordinary shares on such terms 
and in such manner as the directors may determine provided that
a the authority conferred by this resolution shall be limited to the lesser of 24169000 ordinary shares of 10p each and 
no more than 1499 of the issued ordinary shares outstanding at the date of the annual general meeting such limit 
to be reduced by the number of any shares purchased pursuant to the authority granted at resolution 18 below
b the minimum price which may be paid for ordinary shares exclusive of expenses is 10p per ordinary share
c the maximum price which may be paid for each ordinary share exclusive of expenses is an amount not more than 
the higher of 105 of the average of the middle market price of the ordinary shares of the company according to 
the daily official list of the london stock exchange for the five business days immediately preceding the date of 
purchase and the amount stipulated by article 51 of the buyback and stabilisation regulation 2003
d the authority hereby conferred unless renewed shall expire on whichever is the earlier of the conclusion of the 
annual general meeting of the company held in 2014 and 1 august 2014
e the company may make a contract or contracts to purchase ordinary shares under the authority hereby conferred 
prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority 
and may make a purchase of ordinary shares in pursuance of any such contract and
f all existing authorities for the company to make market purchases of its own ordinary shares are revoked except in 
relation to the purchase of shares under a contract or contracts concluded before the date of this resolution and 
which has or have not yet been executed
18 offmarket purchases of own shares
that in accordance with section 694 of the companies act 2006 the proposed programme agreements to be entered 
into between the company and any of goldman sachs international ubs ag deutsche bank ag hsbc bank plc and 
barclays bank plc in the form produced to this meeting and initialled by the chairman for the purpose of identification 
“the programme agreements” be and are approved and the company be and is authorised to enter into the programme 
agreements and all and any forward trades which may be effected or made from time to time under or pursuant to the 
programme agreements for the offmarket purchase by the company of its ordinary shares of 10 pence each as more fully 
described in appendix 1 on pages 98 to 99 the authority conferred by this special resolution to expire on whichever is the 
earlier of the conclusion of the next annual general meeting of the company held in 2014 and 1 august 2014 unless such 
authority is renewed prior to that time except in relation to the purchase of ordinary shares under any forward trade effected 
or made before the expiry of such authority and which might be completed wholly or partly after such expiry and provided 
that shares purchased pursuant to this authority will reduce the number of shares that the company may purchase under 
the general authority granted under resolution 17 above
19 notice of general meetings
that in accordance with the company’s articles of association a general meeting other than an annual general meeting 
may be called on not less than 14 clear days’ notice
by order of the board
andrew mckinlay
secretary
registered office desford road enderby leicester le19 4at
15 april 2013 annual report and accounts january 2013
98
further information on resolution 18 off market purchases of own shares
as noted on pages 23 and 24 in the directors’ report and business review approval will be sought from shareholders to renew 
the company’s authority to make offmarket purchases of its shares 
by virtue of special resolution number 16 passed at the company’s 2012 annual general meeting “agm” shareholder authority 
was given to the company to make onmarket purchases of shares this authority was limited to a maximum of 2495 million 
shares and expires on the earlier of the date of the agm held in 2013 or 1 august 2013 at the same agm authority was granted 
to the company to make offmarket purchases of shares for cancellation under contingent purchase contracts to be entered 
into with any of goldman sachs international ubs ag deutsche bank ag hsbc bank plc and barclays bank plc the “banks” 
this authority was limited to a maximum of 8 million shares and expires on the earlier of the date of the agm to be held in 2013 
or 1 august 2013 pursuant to those authorities and up to 19 march 2013 the company has bought back 4767669 shares for 
cancellation representing 29 of its issued share capital as at the date of the 2012 agm at a total cost of £1629 million of 
these 650190 shares were bought back under contingent purchase contracts
under sections 693 and 694 of the companies act 2006 the “act” the company is not permitted to make offmarket purchases or 
contingent purchases of its shares unless it obtains advance shareholder approval to the proposed contract terms furthermore 
under the rules of the uk listing authority the “listing rules” the company may not purchase its shares at a time when any 
director is in receipt of unpublished price sensitive information about the company accordingly no purchases of shares would 
normally be made in periods when the directors might be in receipt of unpublished price sensitive information “close periods” 
typically these include the periods from the company’s half year end up to the announcement of its interim results in september 
and the january year end up to the announcement of full year results in march each year these close periods inevitably reduce 
the number of shares the company is able to purchase
in order to achieve maximum flexibility in its share purchase activities the company is able to enter into irrevocable and non
discretionary programmes to allow it to buy shares during close periods another method of providing flexibility in its share 
purchase activities and reducing the cost of share buybacks is for the company to enter into contingent forward purchase 
contracts outside of close periods pursuant to the authority granted at the 2012 agm the company entered into agreements 
with the banks the “existing agreements” and the company intends to terminate the existing agreements and enter into new 
agreements with each of the banks under these agreements the “programme agreements” the company may although it is 
not obliged to enter into contingent forward trades “contingent forward trades” or “cft” from time to time the terms of each 
cft will provide for the company to purchase a fixed number of shares each week over a period of between 20 to 30 weeks the 
maximum number of shares that can be purchased under each cft is limited to 50000 shares per week details of each cft will 
be announced to shareholders on the day it is entered into by the company
whether or not the company purchases shares in a particular week during the term of a cft is dependent upon the company’s 
share price not reaching a level set at the time that contract is entered into the “suspension level” the suspension level is 
determined by the company and must be between 104 and 110 of the company’s share price as at the start of the cft 
the price at which the company may purchase shares during the term of a cft the “forward price” shall also be fixed at the 
start of the cft the forward price is subject to a maximum of 99 of the share price at the start of the contract and a minimum 
of 10 pence the par value of an ordinary share 
this structure would allow the company to purchase shares at a discount to the market price as at the time each cft 
commences for so long as the suspension level is not reached without breaching the listing rules if the suspension level is 
reached the cft would terminate automatically at that time and no further shares would be purchased under that contract 
under the provisions of sections 693 and 694 of the act the programme agreements and contingent forward trades are 
contingent purchase contracts to purchase shares by the company offmarket accordingly resolution 18 which will be proposed 
as a special resolution seeks shareholder approval to the terms of the programme agreements to be entered into between the 
company and each of the banks the programme agreements will have a duration of the shorter of the period to the date of the 
next agm to be held in 2014 or 1 august 2014 and will incorporate the terms of an isda master agreement and schedule the 
programme agreements will be entered into and each cft will be effected outside a close period but shares may be purchased 
during a close period by the company the minimum and maximum amount of time between a cft being effected and shares 
being purchased is 5 days and 30 weeks respectively
notice of meeting
appendix i continued parent company accounts governance consolidated accounts
annual report and accounts january 2013
99
business reports additional information
should shareholder approval be granted any number of cft may be effected with the banks at any time provided that 
 ❚ the total maximum number of shares which the company is permitted to purchase pursuant to this authority would be  
50 million representing circa 3 of its issued share capital at 19 march 2013
 ❚ the total cost of shares that the company would be permitted to purchase pursuant to this authority may not exceed  
£200 million including costs
 ❚ the forward price may not exceed the higher of 105 of the average middle market closing price of the company’s shares as 
derived from the official list of the london stock exchange for the five days immediately preceding the day on which the cft 
was effected and the amount stipulated by article 51 of the buyback and stabilisation regulation 2003 
 ❚ the forward price will be no more than 99 of the share price at the time the contingent forward trade was effected
 ❚ the minimum price that can be paid for any share is £010 and
 ❚ only one contingent forward trade will be entered into on any particular day 
subject to the limits set out above the company will select the suspension level and the duration of each cft and the forward 
price will be determined by the relevant bank shares purchased via the programme agreements will reduce the number of 
shares that the company may purchase under any authority granted at the agm on 16 may 2013 for onmarket purchases no 
shares will be purchased under that authority on the same day that a cft is entered into the authority granted to the company 
under this resolution will expire at the conclusion of the agm of the company held in 2014 or on 1 august 2014 whichever is the 
earlier unless such authority is renewed prior to that time except in relation to the purchase of shares under any cft effected 
before the expiry of such authority and which might be completed wholly or partly after such expiry the purchase of shares 
under the programme agreements will always be physically settled by delivery of shares to the company except in the case of 
certain events of default or termination events 
a copy of each of the programme agreements will be available at the agm on 16 may 2013 copies will also be available for 
inspection at the company’s registered office at desford road enderby leicester le19 4at and at the offices of pinsent masons 
30 crown place earl street london ec2a 4es during usual business hours until the date of the agm and at the meeting itself
the total number of employee share options to subscribe for shares outstanding at 19 march 2013 was 8468294 this represents 
53 of the issued share capital at that date if the company were to buy back the maximum number of shares permitted 
pursuant to both the existing authority for offmarket purchases granted at the 2012 agm which will expire at the 2013 agm and 
the authority sought by this special resolution then the total number of options to subscribe for shares outstanding at 19 march 
2013 would represent 57 of the reduced issued share capital
attendance voting and questions
all members who hold ordinary shares are entitled to attend and vote at the agm a member who is entitled to attend and vote 
may appoint one or more proxies to attend and vote instead of him provided that each proxy is appointed to exercise the rights 
attached to a different share or shares held by him a proxy need not also be a member a proxy may vote on any other business 
which may properly come before the meeting if you do not intend being present at the meeting please either sign and return 
a hard copy form of proxy so as to reach the company’s registrars at least 48 hours before the meeting or follow the instructions 
for electronic proxy appointment through crest or through wwwsharevotecouk set out below the return by a member of a fully 
completed form of proxy will not preclude any such member from attending in person and voting at the meeting
a person to whom this notice is sent who is a person nominated under section 146 of the companies act 2006 to enjoy information 
rights a “nominated person” may under an agreement between them and the shareholder by whom they were nominated 
have a right to be appointed or to have someone else appointed as a proxy for the agm if a nominated person has no such 
proxy appointment right or does not wish to exercise it they may under any such agreement have a right to give instructions to 
the shareholder as to the exercise of voting rights
the statements of the rights of members in relation to the appointment of proxies in the above paragraph and in the paragraphs 
headed “electronic proxy appointment through crest” and “proxy card” below do not apply to a nominated person the rights 
described in these paragraphs can only be exercised by registered members of the company nominated persons are reminded 
that they should contact the registered holder of their shares and not the company on matters relating to their investments in 
the company annual report and accounts january 2013
100
any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its 
powers as a member provided that they do not do so in relation to the same shares
in the case of joint holders where more than one of the joint holders purports to appoint a proxy only the appointment submitted 
by the most senior holder will be accepted the senior holder being the first named of the joint holders to appear in the company’s 
share register
a member who appoints as their proxy someone other than the chairman is responsible for ensuring that the proxy attends 
the meeting and is aware of the voting intention of the member if no voting instruction is given the proxy has a discretion on 
whether and how to vote
if a member submits more than one valid proxy appointment the appointment received last before the latest time for the receipt 
of proxies will take precedence 
the company pursuant to regulation 41 of the uncertificated securities regulations 2001 and its articles of association specifies 
that only those shareholders registered in the register of members of the company as at 6pm on 14 may 2013 shall be entitled 
to attend or vote at the aforesaid general meeting in respect of the number of shares registered in their name at that time 
changes to entries on the relevant register of securities after 6 pm on 14 may 2013 or 6 pm on the day that is two days before 
any adjourned meeting shall be disregarded in determining the rights of any person to attend or vote at the meeting
all resolutions will be put to poll votes this means that the votes of all shareholders including those who cannot attend the 
meeting but who validly appoint a proxy are counted the procedures for the poll votes will be explained at the agm
in respect of resolution 18 on offmarket share purchase contracts the companies act 2006 provides that this resolution will not 
be effective if any member of the company holding shares to which it relates ie those which may be purchased pursuant to 
the programme agreements exercised the voting rights carried by any of those shares in voting on the special resolution and 
the resolution would not have been passed if they had not done so therefore next intends to disregard any poll votes which are 
cast in favour of resolution 18 attaching to 50 million shares being the total maximum number of shares which the company 
is permitted to purchase pursuant to the programme agreements from both the total number of votes cast in favour of this 
resolution and the total number of votes cast
as at 19 march 2013 being the latest practicable date prior to the publication of this notice the company’s issued share capital 
consists of 161234237 ordinary shares all of the ordinary shares carry one vote each and there are no shares held in treasury 
a member attending the meeting has the right to ask questions the company must ensure any such question relating to the 
business being dealt with at the meeting is answered but no such answer need be given if a to do so would interfere unduly 
with the preparation for the meeting or involve the disclosure of confidential information b the answer has already been given 
on a website in the form of an answer to a question or c it is undesirable in the interests of the company or the good order of 
the meeting that the question be answered
notice of meeting
appendix i continued parent company accounts governance consolidated accounts
annual report and accounts january 2013
101
business reports additional information
electronic proxy appointment through crest
crest members who wish to appoint a proxy or proxies through the crest electronic proxy appointment service may do so for 
the agm to be held on 16 may 2013 and any adjournments thereof by using the procedures described in the crest manual 
crest personal members or other crest sponsored members and those crest members who have appointed a voting service 
providers should refer to their crest sponsor or voting service providers who will be able to take the appropriate action on 
their behalf
in order for a proxy appointment or instruction made using the crest service to be valid the appropriate crest message a 
“crest proxy instruction” must be properly authenticated in accordance with euroclear uk  ireland limited’s specifications 
and must contain the information required for such instructions as described in the crest manual the message regardless of 
whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy 
must in order to be valid be transmitted so as to be received by the issuer’s agent id ra19 by the latest times for receipt 
of proxy appointments specified in the notice of meeting for this purpose the time of receipt will be taken to be the time as 
determined by the timestamp applied to the message by the crest applications host from which the issuer’s agent is able to 
retrieve the message by enquiry to crest in the manner prescribed by crest after this time any change of instructions to proxies 
appointed through crest should be communicated to the appointee through other means
crest members and where applicable their crest sponsors or voting service providers should note that euroclear uk  ireland 
limited does not make available special procedures in crest for any particular messages normal system timings and limitations 
will therefore apply in relation to the input of crest proxy instructions it is the responsibility of the crest member concerned to 
take or if the crest member is a crest personal member or sponsored member or has appointed a voting service providers 
to procure that his crest sponsor or voting service providers takes such action as shall be necessary to ensure that a 
message is transmitted by means of the crest system by any particular time in this connection crest members and where 
applicable their crest sponsors or voting service providers are referred in particular to those sections of the crest manual 
concerning practical limitations of the crest system and timings the crest manual is available at wwweuroclearcomcrest
the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of the 
uncertificated securities regulations 2001
documents available for inspection
the following documents will be available for inspection at the registered office of the company during usual business hours and 
will be available for fifteen minutes prior to and for the duration of the agm
 ❚ copies of the terms of appointment of the nonexecutive directors
 ❚ copies of each of the programme agreements pursuant to resolution 18
copies of each of the programme agreements pursuant to resolution 18 will be available for inspection at the offices of pinsent 
masons 30 crown place earl street london ec2a 4es during normal working hours until the close of the annual general meeting 
you may not use any electronic address provided in this notice of meeting to communicate with the company for any purposes 
other than those expressly stated annual report and accounts january 2013
102
registered office
desford road enderby leicester le19 4at
registered in england no 4412362
company website
a full copy of this annual report together with those for prior years and other information required by section 311a 
of the companies act 2006 can be found on the next plc website at wwwnextplccouk
under section 527 of the companies act 2006 members meeting the threshold requirements set out in that section 
have the right to require the company to publish on a website a statement setting out any matter relating to i 
the audit of the company’s accounts including the auditor’s report and the conduct of the audit that are to 
be laid before the annual general meeting or ii any circumstance connected with an auditor of the company 
ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance 
with section 437 companies act 2006 the company may not require the members requesting such website 
publication to pay its expenses in complying with sections 527 or 528 companies act 2006 and it must forward the 
statement to the company’s auditor not later than the time when it makes the statement available on the website 
the business which may be dealt with at the annual general meeting includes any statement that the company 
has been required under section 527 companies act 2006 to publish on its website
payment of dividend
the recommended final ordinary dividend if approved will be paid on 1 august 2013 to holders of ordinary shares 
registered at close of business on 28 june 2013 the ordinary shares will trade exdividend from 26 june 2013
annual general meeting
the annual general meeting will be held at 930 am on thursday 16 may 2013 at the leicester marriott hotel 
smith way grove park leicester le19 1sw the notice of the meeting on pages 96 to 101 sets out business to be 
transacted full access is available to the venue for those with special requirements
proxy card
completed proxy cards should be sent to our registrars equiniti and must be received by 930 am on 14 may 
2013 or 48 hours before any adjourned meeting as an alternative to completing and returning this form of proxy 
you may submit your proxy electronically by accessing the registrar’s website wwwsharevotecouk you will be 
asked to enter your unique voting id task id and shareholder reference number as printed on your form of proxy 
the use by members of the electronic proxy appointment service will be governed by the terms and conditions 
of use which appear on the website electronic proxies must be completed and lodged in accordance with the 
instructions on the website by no later than 48 hours before the annual general meeting a member must inform 
the registrar in writing of any termination of the authority of a proxy
share price data 
stock exchange code nxtl 
2013 2012
share price at financial year end £4059 £2639
market capitalisation £6544m £4453m
share price movement during year
high midmarket quotation £4059 £2810
low midmarket quotation £2619 £1868
registrars and transfer office
equiniti aspect house spencer road lancing west sussex bn99 6da
telephone 0871 384 2164 calls to this number are charged at 8p per minute plus network extras overseas 
shareholder helpline number 44 0121 415 7047 lines are open 830am to 530pm monday to friday
other information parent company accounts governance consolidated accounts
annual report and accounts january 2013
103
business reports additional information
discount voucher
the company offers a discount voucher to any first named registered shareholder holding 500 or more ordinary 
shares as at 1 april each year the voucher entitles the recipient or their immediate family to a 25 discount against 
most purchases at any one time of full price merchandise in next retail stores it cannot be used in conjunction 
with any other discount voucher or offer nor can it be used for the purchase of gift cards sale merchandise 
electrical goods nonnext branded goods or at any branch of next clearance or purchases from next directory 
the voucher has no monetary purchase limit and expires on 31 october of the same year shareholders holding 
shares in nominee or pepisa accounts are also eligible but must request the voucher through their nominee or 
pepisa account manager who should email alysonwenlocknextcouk
shareholder enquiries
the company’s share register is maintained by equiniti please contact them if you have any enquiries about your 
next plc shareholding including the following matters
 ❚ change of name and address
 ❚ loss of share certificate dividend warrant or tax voucher
 ❚ if you receive duplicate sets of company mailings as a result of an inconsistency in name or address and wish 
if appropriate to combine accounts
the shareview portfolio service from our registrar equiniti gives you more online information about your next plc 
shares and other investments for direct access to information held for you on the share register including recent 
balance movements and a daily valuation of investments held in your portfolio visit wwwshareviewcouk
for shareholders with disabilities equiniti provides the following
 ❚ if requested future communications produced by them will be sent in the appropriate format
 ❚ textphone number 0871 384 2255 for shareholders with hearing difficulties
 ❚ hearing loop facilities in their buildings for use by visiting shareholders
crest
the company’s ordinary shares are available for electronic settlement
payments of dividends to mandated accounts
shareholders who do not at present have their dividends paid directly into a bank or building society may wish to 
do so a mandate form is attached to your dividend warrant and tax voucher or is available to download from the 
next plc website on wwwnextplccouk or from equiniti telephone 0871 384 2164
forward looking statements
this report and accounts contains “forward looking statements” which are all matters that are not historical facts including 
anticipated financial and operational performance business prospects and similar matters these forward looking statements 
are identifiable by words such as “aim” “anticipate” “believe” “budget” “estimate” “expect” “forecast” “intend” “plan” “project” 
and similar expressions these forward looking statements reflect next’s current expectations concerning future events and 
actual results may differ materially from current expectations or historical results any such forward looking statements are subject 
to risks and uncertainties including but not limited to those risks described in “risks  uncertainties” on pages 17 to 19 failure by 
next to predict accurately customer fashion preferences decline in the demand for merchandise offered by next competitive 
influences changes in level of store traffic or consumer spending habits effectiveness of next’s brand awareness and marketing 
programmes general economic conditions or a downturn in the retail industry the inability of next to successfully implement 
relocation or expansion of existing stores insufficient consumer interest in next directory acts of war or terrorism worldwide work 
stoppages slowdowns or strikes and changes in financial or equity markets these forward looking statements do not amount 
to any representation that they will be achieved as they involve risks and uncertainties and relate to events and depend upon 
circumstances which may or may not occur in the future and there can be no guarantee of future performance undue reliance 
should not be placed on forward looking statements which speak only as of the date of this document next does not undertake 
any obligation to update publicly or revise forward looking statements whether as a result of new information future events or 
otherwise except to the extent legally required
this report has been printed on recycled paper annual report and accounts january 2013
104 2219205 010320013 proof 2
proxy and admission card for the annual general 
meeting on thursday 16 may 2013
if you will be attending the annual general meeting to be held at the 
leicester marriott hotel smith way grove park leicester le19 1sw  
at 930 am please bring this card with you
these notes relate to the methods of appointing proxies for the annual general 
meeting
1 if you wish to register your proxy appointment electronically through the internet 
please use wwwsharevotecouk where full details of the procedure are given 
you will have to enter the voting id task id and shareholder reference number 
shown on this form
2 crest members should please refer to the notice of meeting for instructions 
regarding crest electronic proxy appointment services
3 if you wish to register your proxy appointment in paper form please comply with 
the following notes
a you may if you wish delete the words ‘chairman of the meeting’ and insert 
the name of a proxy of your choice in the box who need not be a member 
please initial that alteration
b to appoint more than one proxy additional proxy forms may be obtained 
by contacting our registrar equiniti limited on 0871 384 2164
1
 overseas 
shareholders should call 44 0121 415 7047 or you may copy this form 
please indicate in the box next to the proxy holder’s name the number of 
shares in relation to which the proxy is authorised to act as your proxy 
please also indicate by ticking the box provided if the proxy appointment 
is one of multiple appointments made all forms must be signed and should 
be returned together in the same envelope to the address on the reverse of 
this card
c  the form of proxy and if relevant the power of attorney or other authority 
under which it is signed or a certified copy of that power or authority must 
be received by our registrar equiniti limited not later than 48 hours before 
the annual general meeting
d if the member is a corporation the form of proxy must be executed either 
under seal or in any other manner having the same effect or under the hand 
of an officer or the person duly authorised in writing stating their capacity 
eg director secretary duly authorised attorney
e for joint holders the signature of any one of them will suffice the instructions 
of the senior joint holder will be accepted to the exclusion of those of the 
other joint holders and for this purpose seniority will be determined by the 
order in which the names stand in the register of members for the joint 
holding
f the address shown opposite is that appearing in the register of members 
and form of proxy and attendance card are not transferable
4 to be entitled to vote at the meeting and for the purpose of determining the 
number of votes that may be cast shareholders’ names must be entered in the 
register of members at 600 pm on 14 may 2013
5 full details of the resolutions to be proposed at the meeting with explanatory 
notes are set out in the notice of annual general meeting
a map for your guidance is on the reverse of this card
1
calls to the number above are charged at 8p per minute plus network extras lines 
are open 830 am to 530 pm monday to friday

 
proxy for the annual general meeting 2013
you may submit your proxy electronically at wwwsharevotecouk using the above numbers
iwe appoint the chairman of the meeting or the following person
see note 3a as myour proxy to exercise all or any of myour rights to attend speak and vote in respect of myour voting entitlement on my
our behalf at the annual general meeting of next plc to be held at the leicester marriott hotel smith way grove park leicester le19 1sw on  
thursday 16 may 2013 at 930 am and at any adjournment this form of proxy relates to the resolutions listed below and any other business  
transacted at the meeting or any adjournment iwe wish myour proxy to vote on the resolutions proposed at the meeting as instructed on this form 
the proxy will vote or abstain from voting at his or her discretion on any resolution listed below if no instruction is given regarding that resolution and 
on any other business transacted at the meeting or any adjournment

voting id task id shareholder reference number
0164079s
please tear off and return
please indicate your instructions by marking the “for” “against” or “vote withheld” boxes in black ink like this
    vote 
ordinary resolutions for against withheld
1 to receive and adopt the accounts and reports   
2 to approve the remuneration report   
3 to declare a final dividend of 74p per share   
4 to reelect john barton as a director   
5 to reelect christos angelides as a director   
6 to reelect steve barber as a director   
7 to reelect christine cross as a director   
8 to reelect jonathan dawson as a director   
9 to reelect david keens as a director   
10 to elect caroline goodall as a director   
11 to reelect francis salway as a director   
12 to reelect andrew varley as a director   
13 to reelect simon wolfson as a director   
14  to reappoint ernst  young llp as auditors and  
authorise the directors to set their remuneration   
15 directors’ authority to allot shares   
special resolutions
16 authority to disapply preemption rights   
17 authority for onmarket purchase of own shares   
18 authority for offmarket purchase of own shares   
19 notice period for general meetings   
signature
    
date 
 
please tick here if this proxy appointment is one of  
multiple proxy appointments being made for the  
appointment of more than one proxy please refer to  
note 3b on the attached form
the vote withheld option is provided to enable you to instruct the proxy 
not to vote on any particular resolution a vote withheld is not a vote 
and will not therefore be counted in the calculation of the proportion 
of votes for and against a resolution
nextplcformofproxy2013indd   1 04042013   104946 2219205 010320013 proof 2
marriott hotel directions
from the w est
at the end of the m69 go straight over at the 
roundabout following directions to leicester take 
the slip road for the a563 signposted leicester and 
space centre  at the roundabout take first left and 
head east on the a563 marked leicester get into 
right outside lane and at second slip road turn right 
signposted business park  at roundabout approx 
50 yards take last exit and hotel is situated at the 
end of this road
from the south or north
exit m1 at junction 21 follow directions for  
leicester take the slip road for the a563 signposted 
leicester and space centre  at the roundabout take 
first left and head east on the a563 marked leicester 
get into right outside lane and at second slip road 
turn right signposted business park at roundabout 
approx 50 yards take last exit and hotel is situated 
at the end of this road
equiniti 
aspect house
spencer road
lancing
bn99 8gx
business reply plus
licence number
rtatgulyljbj
nextplcformofproxy2013indd   2 04042013   104946  wwwnextcouk
wwwnextplccouk


Summary:
 annual report and accounts january 2013
04
directors’ report and business review
chief executive’s review
overview
next has had a good year achieving 31 growth in sales and 90 growth in underlying profit before tax  strong 
cash generation allowed us to buy back 45 of shares outstanding which along with a lower tax rate resulted in 
eps growing much faster than profits  
in the year to january 2013 posttax eps grew by 166  our full year dividend has been increased in line with eps 
to 105p
revenue excluding vat
underlying business excluding exceptionals
january
2013
£m
january
2012
£m
next retail 21909 21914 00
next directory 11926 10887 95
next brand 33835 32801 32
other 1643 1610 20
continuing business 35478 34411 31
profit and eps
underlying business excluding exceptionals
january
2013
£m
january
2012
£m
next retail 3311 3237 23
next directory 3021 2626 151
other 170 124
operating profit – underlying 6502 5987 86
net interest 286 284
profit before tax – underlying 6216 5703 90
taxation 1485 1429
profit after tax – underlying 4731 4274 107
eps – underlying 2977p 2554p 166
dividends per share 1050p 900p 167
next plc economics
five straightforward profit drivers
the table below sets out the five main drivers of the group’s profit and loss account  it shows how the profit from 
1 new retail space and 2 online sales more than offset the profit lost as a result of 3 declining sales in the 
existing store base  it also shows how 4 cost inflation has been more than offset by 5 cost savings
profit year ending jan 2012 £570m
profit from sales increasesdecreases
1 profit from new space 27m
2 profit from additional online sales growth 40m
3 cost of lost sales in existing stores  29m
38m 7
cost increases and savings 
4 inflation in cost base  50m
5 cost savings 64m
14m 2
profit year ending jan 2013 £622m 9 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
05
five straightforward objectives
the company has five core operational objectives as set out below  underlying these operational goals is the 
ever present and overriding financial objective of delivering long term sustainable growth in earnings per share
develop the next 
brand
develop improve and expand our product ranges focusing on being better by design
rigorously control 
costs
control costs through constantly developing more efficient ways of operating  this must be 
done without detracting from the quality of our products and services  
invest in profitable 
new space
open profitable new retail space maintaining the company’s strict payback and 
profitability hurdles of 15 net store profit before central overheads and payback on net 
capital invested in 24 months  
invest in online 
growth
invest in growth from our online business through improving uk services and new overseas 
markets  
generate and return 
cash 
focus on cash generation  return funds that are not needed to develop the business 
to shareholders through share buybacks  this must be earnings enhancing and in the 
interests of shareholders generally  
product and the next brand
without great product all our other activities are in vain  we believe there is the opportunity to further improve and 
expand our product ranges particularly at the more aspirational end of our collections
next has always maintained that if we are to succeed our products must be better by design  additional time and 
money has been invested in the design process for autumn winter 2013  we hope to see continuing improvements 
in the fashion content and quality of our ranges as the year progresses
  
 
 
201112
£570m
201213
£622m
directory
£40m new space
£27m
cost savings
£64m
cost increases
£50m
retail lfls
£29m
490 500 510 520 530 540 550 560 570 580 590 600 610 620 630 annual report and accounts january 2013
06
directors’ report and business review
cost inflation and cost control
we are very clear that we must not compromise service or quality to save money nor should we stop taking on 
new costs that improve our service offer  so we must control costs through operational innovation and improved 
purchasing  the tables below outline the main contributors to cost increases and cost savings over the last year
cost increases £m
cost of living awards and other wage related inflation 17
costs of directory delivery service improvements 15
rent rates  other occupancy inflation 7
retail instore design online overseas and additional brochure 6
systems investments and other 5
total 50
cost savings £m
gross margin improvements 22
retail manpower efficiencies and other cost savings 19
directory operating efficiencies 10
lower freight costs 3
nonstock purchasing improvements eg  paper 3
other 7
total 64
looking at the year ahead we expect cost inflation to be less challenging at around £35m  once again we 
believe that we can offset all these increased costs through saving initiatives
retail
retail sales were level with last year  new space added 32 to retail sales and 21 to total brand sales  retail 
profit of £331m was 23 higher than last year representing a 03 improvement in the retail net margin
retail space
retail expansion in 201213
during the year we added 250000 square feet to our store portfolio  this was less than the 300000 we had 
budgeted at the start of the year  the shortfall was because it has taken longer than expected to get planning 
permission for new projects and because a fire delayed one of our new large sites
the table below sets out the change in store numbers and space since january 2012
store 
numbers
sq ft 
000’s
january 2012  536 6475
new stores resites 6 and extensions 9 5 196
closures  6  28
home standalones 5 85
january 2013 540 6728 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
07
healthy returns on capital and high profitability
new store profitability and payback on net capital invested are both comfortably within company targets  forecasts 
for stores opened in the last 12 months shown in the table below are based on sales since their dates of opening
sales 
vs target
forecast 
profitability
forecast 
payback
mainline 9 24 17 months
home 5 19 22 months
total 8 23 19 months
space expansion in the year ahead
there continue to be good opportunities to profitably increase uk retail selling space  our expansion programme 
is built bottomup on a location by location basis and there remain many towns and cities where we believe there 
is the potential to offer wider ranges in larger stores  
planning remains a problem though often more of a delay than a brick wall  we are actively working with planning 
officers councillors and local communities to deliver new shops investment and jobs  we continue to make a 
greater investment in the external architecture of our new stores particularly on retail parks  our aim is to transform 
the quality of construction associated with outoftown retail and create the sort of buildings that communities will 
see as an asset not an eyesore
in our dealing with local councils it is noticeable that some are much more progrowth and projobs than others  
many local councils are enthusiastic and efficient but a few remain an unhealthy mix of luddite intransigence 
and incompetence  going forward in areas where councils traditionally have got away with just saying “no” we 
will be more active in harnessing the law and the full weight of public opinion to campaign for growth
next year we expect to add at least 250000 sq ft of trading space net of closures  
store portfolio profitability
we continue to closely monitor the profitability of our store portfolio  underperforming stores are actively managed 
with a view to possible closure before they become uneconomic  on average our store leases have 7 years to run 
before expiry or a break clause  
our portfolio remains extremely profitable with 89 of our sales coming from stores delivering more than 15 profit 
contribution on sales
store 
profitability
percentage 
of turnover
20 71
15 89
10 95
5 99
0 994
over the last five years the steady process of opening new space and refitting existing stores has transformed our 
portfolio  of the 67 million square feet of trading space we have today 37 million 54 is in stores that are either 
brand new or enlarged  of the remaining 3 million square feet 22 million has been refitted leaving just 800000 
13 square feet of the portfolio unchanged from 2007 annual report and accounts january 2013
08
directors’ report and business review
retail profit analysis
operating margin improved slightly on last year  the table below details the margin movement by the major 
heads of costs
net operating margin last year 148
increase in boughtin 
gross margin
the improvement in boughtin gross margin was driven by an improved usd 
exchange rate  this improvement was partly offset by selling a higher 
proportion of home and childrenswear these product categories have a 
lower gross margin than the average
03
reduction in freight 
and faulty
the cost of freight fell and in addition we used less unplanned air freight  
faulty stock rates also reduced
03
increase in store 
payroll
the annual costofliving pay award and staff bonus would have pushed 
wage costs up by 05 however this cost was almost completely offset by 
instore efficiency initiatives
 01
increase in store 
occupancy
rents and rates increased as a percentage of sales mainly as a result of 
negative like for like sales  rental inflation was minimal and continued to 
decline  business rates inflation which is linked to september rpi was very 
high at 56  
electricity costs also increased significantly in the first half
 04
warehouse and 
distribution
the annual costofliving pay award was offset by cost saving initiatives 00
central overheads central overheads reduced as a percentage of sales 02
net operating margin this year 151
directory
next directory sales were up 95 and profit increased by 151
uk service
next directory continues to provide good opportunities for growth  in the uk growth is driven by the wider online 
market and by improving delivery services  last year we added sameday evening sunday and nextday to store 
delivery services all at a £299 premium to the standard service
in 2013 we have already improved our delivery services further
 ❚ the cut off for standard next day delivery to home has been moved back to 10pm  
 ❚ nextday delivery to stores has been improved to allow collection after 1230pm as opposed to 400pm and 
the price of this service has been reduced from £299 to 50p  
international online
international sales grew from £33m to £54m  we now sell direct to 60 international territories and also through 6 
partners in 14 of those countries  our international online business contributed £10m to profit  in the year ahead 
we expect our overseas online business to grow to at least £70m adding a further £4m to profit additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
09
sales analysis
the increase in sales came from four main sources which are set out in the table below
contribution to growth
uk full price sales 52
clearance tab 22
markdown sales 01
international online 20
total sales growth 95
customer analysis
directory active average customers increased year on year by 103 to 33 million  customer growth is set out 
below broken down into credit and cash customers
average customers ‘000s
january
2013
january
2012 change
increase in 
customer 
base
total credit customers 2663 2557 106 35
total cash customers 641 438 203 68
total active customers 3304 2995 309 103
directory profit analysis
operating margin increased by 12 to 253  the table below details the margin movement by the major heads 
of costs
net operating margin last year 241
increase in boughtin 
gross margin
the improvement in boughtin gross margin was driven by an improved usd 
exchange rate  in addition directory sold a higher proportion of womens 
and menswear these product categories have a higher gross margin than 
the average
 10
reduction in freight the cost of freight fell and in addition we used less unplanned air freight  02
higher markdown  
obsolescence
directory took more drop stock from retail for its clearance tab  the 
additional obsolescence charge on this stock was the main cause for this 
adverse movement in margin
 04
decrease in bad debt 
 increased service 
charge
the continued improvement in bad debt rates increased margin by 03  
service charge growth increased margin by a further 02  
 05
decrease in marketing the improvement is mainly due to nonrecurring costs incurred last year for 
the development of our new website software
 03
decrease in call 
centre
call centre costs increased margin through improved processes including 
automatic credit scheduling 02 and a reduction in call volumes  
length 01
 03
decrease in 
catalogue production
photography costs reduced improving margin by 03  more customers 
elected to trade without a catalogue this reduced print costs as a 
percentage of sales
 05
increase in warehouse 
and distribution
international distribution costs to service our growing overseas business 
eroded margin by 05  we added new processes in our warehouses to 
enhance our delivery offer this eroded margin by a further 08
 13
central overheads overhead costs increased at a lower rate than sales  01
net operating margin this year 253 annual report and accounts january 2013
10
directors’ report and business review
international retail
we have a profitable franchise business with partners operating 170 stores in 33 countries  our 19 directly owned 
stores in 7 countries made a small loss  we do not intend to open any new directly owned international stores 
going forward  revenue and income for our international business is set out below
£m 2013 2012
franchise income 615 587
owned store sales 162 176
total revenue 777 763 18
operating profit 84 79 62
we are budgeting for international retail to make a profit of £10m in the year ahead the improvement coming 
mainly from the closure of loss making stores
next sourcing
next sourcing profit recovered from the previous year when a significant provision was required against unshipped 
faulty stock  that issue has been resolved and £1m of excess provision has been released this year  next sourcing 
competes for business against the many other suppliers to next retail and next directory it provides around 40 
of next brand stock
£m 2013 2012
sales  5071 5190
operating profit 308 211
operating margin 61 41
we are forecasting next sourcing profits to be around £30m in the year ahead
other profit and loss activities
£m 2013 2012
lipsy 20 13
property management 35 56
central costs 353 306
pension variation 36 67
unrealised foreign exchange 34 11
associates 06 15
total 222 166
lipsy
the full year sales of £58m and profit of £4m before amortisation and profit share of £2m was the best performance 
under the four years of our ownership  internet sales through lipsy’s own site and the next directory doubled to 
£17m and are now ahead of wholesale sales  lipsy’s retail sales were £22m taken from 51 stores trading 60000 sq  ft
property management
underlying profit was down by £2m to £35m  we now own very few retail freeholds  at the end of the year we 
sold a development property occupied by ventura a business we divested in 2011 the £9m profit is shown as 
exceptional  we do not anticipate any property management profit in the year ahead   additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
11
central costs
the charge has increased by £5m mainly due to performancerelated pay and company wide sharebased 
incentives  we expect central costs to decrease by £1m in the year ahead
pension scheme
the actuarial pension credit fell from £7m to £4m  we expect this credit to be around £3m in the coming year  
during the year we made changes to our final salary pension scheme which has been closed to new entrants 
since 2000  this change gave a credit adjustment which was partially offset by the cost of hedging out a tranche 
of pension liabilities  the net effect of these two changes was an exceptional posttax credit of £28m
interest and taxation
the interest charge was £28m  for the year ahead we expect net debt to range between £400m and £600m 
resulting in a similar interest charge
our tax rate reduced as expected to 239 following the reduction in headline uk corporation tax rates  on the 
assumption that tax rates continue to reduce as announced we expect our effective rate to be no higher than 
23 in each of the next two years
balance sheet
the balance sheet remains strong with year end net debt of £493m and forecast peak borrowing requirements 
being very adequately financed by our bonds and bank facilities of £923m as set out in the table below
 
£m
2013 bonds – repayment due september 85
2016 bonds 213
2021 bonds 325
total bonds nominal value 623
2016 committed bank facility 300
total debt facilities available 923
we believe next will generate around £250m of cash in the year ahead after capital expenditure interest tax and 
dividends but before share buybacks
cash generation net debt and share buybacks
stronger than expected cash flow 
cash generation was significantly ahead of our expectations  operational cash flow before buybacks and before 
additional cover in the esot was £376m  this was a long way ahead of our original £240m forecast the variance 
has been driven by higher profits lower capital expenditure and year end stock levels higher directory customer 
payments and a number of other one off factors
during the year we used surplus cash to buy 75 million shares 45 of shares outstanding as at jan 2012 at an 
average price of £3213 and a cost of £241m  in addition we used £52m to increase the share option cover in our 
employee share ownership trust this had the effect of reducing net shares in issue by a further 07 annual report and accounts january 2013
12
directors’ report and business review
buybacks eps and share price
despite their increasing popularity share buybacks are still widely misunderstood  there are still those who wrongly 
believe that they are some sort of share support scheme  this of course would be futile as any attempt to support 
a share price would evaporate as soon as the money ran out
the only reason share buybacks can deliver long term value is because they permanently reduce the number 
of shares in issue and so increase the amount of profit attributable to each share eps  an important part of the 
logic of share buybacks is the implied link between growth in eps and growth in share price  whilst in the short 
term there might appear to be no link in the long run share prices tend to reflect the fundamental value of the 
earnings and dividend stream  if the share price did not rise with eps the buyback programme would eventually 
leave a single share owning all the profits and dividends
the graph below illustrates the long term correlation of share price to eps for next plc over the period we have 
been buying back shares  the blue boxes indicate earnings per share and the black line shows the share price  
the boxes at the top of the chart show the historic priceearnings pe ratio
1999 00 01 02 03 04 05 06 07 08 09 10 11 2012
■ pe ratio
■ eps
■ share price
earnings per share and share price history
39p
46p
58p
69p
94p
£120
£127
£146
£169
£156
£188
£222
£255
£298
£40
£35
£30
£25
£20
£15
£10
£5
the long game – the next plc rules of buybacks
over the long term we have been following these rules when considering buybacks
1  share buybacks must be earnings enhancing and make a healthy equivalent rate of return see below
2  only use the cash the business does not need  next has always prioritised investment in the business over 
share buybacks
3  use surplus cash flow not everincreasing amounts of debt  we have never allowed our share buyback 
programme to threaten our investment grade credit status and will not do so going forward
4  maintain the dividend at a reasonable level through growing dividends in line with eps  next will continue to 
increase dividends in line with eps
5  be consistent  next has been buying shares every year for more than 10 years reducing the shares in issue by 
more than 50
6  for share buybacks to be an effective use of shareholder cash the core business must have the prospect of 
long term growth
127 167 163 111 138 132 133 133 82 70 104 90 103 134 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
13
effect on buybacks of a rising share price 
the graph above demonstrates that the relationship between our eps and share price has recently returned to its 
near historical average  it is important to recognise that this relative rise in the pe ratio reduces the benefit of share 
buybacks  the more expensive the shares become the smaller the share of the business can be bought with the 
same amount of surplus cash  
for example two years ago when our share price was £21 our operational free cash flow of £200m enabled us 
to buy 52 of the company  today with the shares around £40 our expected surplus cash flow of £250m will only 
buy 39
the overall effect is simple as the pe ratio rises the earnings enhancement of buybacks falls  so given our current 
pe ratio how should next assess the desirability of share buybacks 
essentially there are two measures we look at  the first is the earnings enhancement of a buyback when compared 
to the enhancement to earnings from keeping the cash in the bank and earning interest  the second is the 
comparison between the earnings enhancement of a buyback compared to the return that would have to be 
achieved from investing the cash in an alternative investment the equivalent rate of return err
with long term borrowing rates for next at around 4 a share buyback of £250m at £40 would be 25 earnings 
enhancing  the problem with this method of assessing buybacks is that at low interest rates buybacks remain 
earnings enhancing beyond £60 so we consider the equivalent rate of return measure to be more helpful
equivalent rate of return err
the tables below set out the maths used to calculate err  the top table shows the enhancement achieved from 
acquiring £250m of shares at £40 which is 4  the second table shows that if we were to increase our profits by 4 
we would have to invest in an asset yielding 10  given that share buybacks carry no additional operational risk 
the returns at 10 remain very attractive
 
enhancement £250m buyback pre interest costs 
share price £4000
market capitalisation £6400m
cash used for buyback £250m
 acquired 2506400 39
eps enhancement 11–39 41
calculating err
company profits £622m
additional profit required for 4 growth in eps £253m
additional profit as a percentage of £250m invested in buyback err 101
these workings are shown as an explanation of equivalent rate of return  of course a simpler way of calculating 
err is to divide profit before tax into market capitalisation annual report and accounts january 2013
14
the graph below shows how err falls as the share price rises  as the yield approaches the market’s expected 
return on equity say 8 the buyback becomes less attractive  if the returns dropped much below 9 we would 
become less enthusiastic so to a certain extent the share price provides a natural moderator of a disciplined 
buyback programme
103
100
98
95
93
90
88
85
83
80
78
75
£40 £41 £42 £43 £44 £45 £46 £47 £48 £49 £50
share price £
equivalent rate of return 
equivalent rate of return 
84
87
89
94
92
96
86
outlook for 2013
the consumer economy
the consumer environment looks set to remain subdued  the inevitable deleveraging of public and private 
finances means that the nation must slowly work its way back to affording the lifestyle it was already enjoying 
before the financial crisis  
this process of retrenchment is manifesting itself in earnings growth running below the rate of inflation  this decline 
in real earnings looks set to continue for at least one if not several more years to come  indeed the outlook for 2013 
inflation has worsened since this time last year  
the graph below shows the difference in cpi and wages  the black dotted line is the bank of england central 
inflation forecast as at january 2013 the grey dotted lines are the equivalent estimates in january and november 
2012  estimates for inflation steadily rose last year leaving the outlook for real earnings as difficult as 2012 if 
not slightly worse  so we are planning on there being very little if any improvement in the underlying consumer 
economy
directors’ report and business review
5
4
3
2
1
0
 2010 2011 2012 2013 2014
cpi
wages
cpi estimate boe
jan 12
nov 12
jan 13
source ons feb 13 additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2013
15
outlook for next brand sales 2013
in this environment we will continue to budget for our existing stores to take moderately less than the previous year  
any growth in sales must come from investment in profitable new space and the continuing growth in the online 
market both in the uk and overseas  in the year ahead we expect these avenues of growth to continue to exceed 
underlying declines  
we are budgeting for total next brand sales for the full year to rise within a range of 1 to 4
the first few weeks of the year have been quiet and serve to reinforce a more cautious approach  at present 
sales are at the bottom of our target range though we expect this situation to improve  we will get a better 
understanding of the underlying consumer environment once temperatures return to seasonal levels  we will issue 
further guidance with our may trading statement
outlook for group profits and eps
assuming sales fall within our budgeted range we expect group profits before tax for the full year to be in a 
range of £615m to £665m which would represent a year on year movement of between 1 to 7  assuming we 
achieve our buyback plan eps would rise by between 4 and 13  the table below sets out our guidance for 
the full year
lower 
end of 
guidance
upper 
end of 
guidance
total brand sales  growth e 1 4
profit before tax e £615m £665m
profit before tax  growth e 1 7
eps  growth e 4 13
outlook for retail selling price inflation 2013 and beyond
overall factory gate prices are stable  any increases in far eastern wages have generally been offset by 
manufacturing productivity improvements or the development of new far eastern sources of supply in particular 
bangladesh and cambodia
the recent sharp fall in the value of sterling will have very little impact on this year’s pricing as we have bought 
forward most of our foreign currency requirement for the current year  if the pound remains at its current rate of 
exchange against the dollar we would expect our prices to rise in 2014
interim management statement
our next statement will cover the first fourteen weeks of the year to 4 may 2013 and is provisionally scheduled for 
wednesday 8 may 2013
in summary
next has performed well in a difficult year delivering good growth in sales and profits along with exceptional 
advances in earnings per share and dividends  the year ahead looks no less challenging but the group is well 
prepared and has further opportunities for growth  we remain strongly cash generative and have every chance 
of delivering another year of increased sales and earnings per share
lord wolfson of aspley guise
chief executive
21 march 2013