February 5, 2015 / 11:45 AM / in 3 years

UPDATE 1-Next pays another special dividend and says more could follow

(Adds detail, shares)

LONDON, Feb 5 (Reuters) - Next, Britain’s second biggest retailer by sales, said on Thursday it will pay another special dividend, totalling 90 million pounds ($137 million), and flagged the prospect of three more similar payouts.

The group, which has outperformed rivals for a decade due to a strong online offer, new store openings and diversification into new product areas, said it would pay a special dividend of 60 pence a share on May 1 to investors on its register on April 10.

Next has a well established policy of returning surplus cash to shareholders through share buybacks or special dividends. Its last special dividend, one of 50p a share, was announced in December.

The retailer forecast that at the lower end of its profit guidance for the 2015-16 year it will generate around 360 million pounds of surplus cash.

Next said that if its share price remained above 67 pounds, its self imposed limit for doing share buy backs, it would return this cash in four quarterly special dividends of approximately 90 million pounds each, or 60p per share, per quarter. The first of these was announced on Thursday.

Despite the new increased payout and the prospect of more, Next said it remained cautious for the year ahead and was not changing its 2015-16 profit guidance.

In December the firm forecast full price sales growth in the 2015-16 year of 2.5-7.5 percent, with profits expected to grow in line with sales.

Next will report results for the year to Jan. 2015 on March 19. It has forecast a pretax profit of 775 million pounds.

Shares in the firm, up 18.4 percent over the last year, were flat at 7,110 pence at 1138 GMT, valuing the business at 10.9 billion pounds. ($1 = 0.6559 pounds) (Reporting by James Davey; Editing by Neil Maidment)

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