British clothing retailer Next Plc expects annual profits to be slightly ahead of analysts' current average forecast, with tight cost control and strong online sales helping to offset tough trading at its shops.

Next, the first major British retailer to give an indication of its performance in the run up to Christmas, said yesterday it expected annual profit before tax to be within a range of £463 million to £473 million.

Analysts had on average been expecting the mid-market retailer to make a full-year pretax profit of £456 million, according to Reuters' estimates.

"In a challenging year we will have increased group profits through good control of stocks, margins and costs, along with a strong sales performance in Next Directory," Next said in a statement.

Sales at the online and home shopping Directory business rose 9.3 per cent in the period from July 31 to December 24, compared with a 6.9 per cent fall in like-for-like sales at Next's 308 shops which have been unaffected by new openings.

Analysts had predicted Next would undershoot its targeted sales performance of minus two to minus five per cent at its stores in the second half of its financial year.

"You've still got to be worried about the level of the like-for-like sales decline, but the fact they can deliver profits against that sort of sales performance shows the resilience of the business and that they're managing it well," said Investec Securities analyst Mark Charnock.