Next in line to overtake M&S as profits hit £695m

The milestone performance comes after impressive Christmas trading, which helped full-year sales across its Next Directory catalogue and online division leap 12.4 per cent higher while its stores notched up growth of 1.7 per cent.

Underlying pre-tax profits were 11.8 per cent higher on the previous year and came after Next upped its profit guidance for the second time in just over two months following the better-than-expected festive period.

It is now firmly set to make more money than high street stalwart M&S for the first time since it launched in 1982, with M&S predicted to see underlying annual pre-tax profits fall to around £628m. Next chairman John Barton said: “The year to January 2014 was a great year for Next.”

The group is expecting further profits growth over the year ahead of between five per cent and 11 per cent, which would take its profits as high as £770m. It expects sales growth of between four per cent and eight per cent for Next branded sales over the current year.

But the group added a note of caution over the outlook. It said: “The consumer economy has steadily improved over the course of the last year.

“This modest improvement looks set to continue. However, conditions are likely to remain far from buoyant and there are real risks to the sustainability of the current recovery.”

In September last year, Next chief executive Lord Wolfson warned of a “profoundly anti-growth culture” pervading British institutional life when he addressed the Sheffield Chamber of Commerce dinner.

His company wanted to develop a £10m home and garden store at Meadowhall, but the council rejected the application for planning permission on the grounds of harm to city centre trade. The retailer won after appealing to the Government planning inspector.