Shares in Next were up on the FTSE 100 in morning trading after the group reported a rise in profits in the half year ended July 2010.

The retailer said that revenue was up five per cent to £1.6 million in the period, while pre-tax profit was up 15 per cent to £213 million.

The group said that it would be raising its interim dividend by 32 per cent to 25.00 pence per share and said that net debt at the end of the period was £494 million.

Lord Wolfson, CEO of Next, said, "Next has delivered strong results in the first half and we expect to deliver EPS growth for the full year of between 13% and 18%. Looking forward we believe the consumer environment may remain sluggish for some time. However, Next has proven avenues for expansion that we can exploit to increase total sales. We believe that these growth opportunities combined with good cost control, strong cash generation and continuing share buybacks can deliver healthy total returns for shareholders."

Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "The update is very positive on balance, despite the well reported headwinds which retailers in general are facing.

"The rise in sales at the Directory arm continues the established upward trajectory, whilst the focus on cost control and margin growth has also helped improve the figures. The share buyback scheme has leant support, with the dividend policy remaining progressive. Nearer term prospects will be hampered by the triple effect of a weaker pound, the current spike in the cotton price and the planned VAT increase early next year. Nonetheless, the accompanying management guidance is defiant, which has helped to propel the shares forward in early trade.

"The share price performance has been mixed, dropping 5% over the last three months as the wider FTSE100 added 7%. Over the last year, the picture has been more positive - Next having risen 19% versus a FTSE gain of 10%. Even though concerns have been voiced surrounding future growth prospects, the general market view of the company as a strong hold is only likely to come under pressure on the upside following this statement."

By 09:45 shares in Next were up 4.36 per cent on the FTSE 100 to 2,129.00 pence per share.