BRITAIN'S Indian summer will knock £25m off profits at Next after the sustained period of mild weather saw its sales performance melt away.

The group warned that turbulent trading conditions meant it could even see sales fall over the key final quarter, which includes the Christmas period.

Sales grew by 5.4 per cent in the third quarter to October 25, compared to original expectations of 10 per cent, following the mild autumn which is set to see temperatures of up to 20C (68F) this week.

Next said it now expected full-year pre-tax profits to rise 11 per cent to £770m, down from £795m previously expected.

Next said last month that it would have to lower its profits guidance for the year if the Indian summer continued throughout October.

Full-year total sales are now expected to be between 6 per cent and 8 per cent higher than last year, with Next having previously pencilled in a rise of 7 to 10 per cent.

The group said that its full-year debt was forecast to be in line with next year so it did not intend to pay any further special dividends in the current financial year, having already returned more than £700m to shareholders.

Next, which overtook Marks & Spencer with a £695m annual profits haul earlier this year, had been experiencing its strongest sales growth for many years prior to the slower performance in September.