Clothing retailer Next said it had seen a sharp increase in

pre-tax profits in the last six months, boosted by increasing sales through its Next Directory catalogues.

The high street and home-shopping group said profits before tax in the six months to the end of July rose by 18 per cent compared with the same half-year in 1999, from £68.4 million to £80.7 million.

Seven new stores opened after the January sales, bringing the total to 338 across the UK. More are due to open in the run-up to Christmas.

The company's mail-order division, Next Directory, reported an eight per cent increase in sales, resulting in a 42 per cent climb in operating profits to £17.6 million.

Recognising the tough conditions in the home shopping sector, Next said it had reduced spending on marketing its catalogue.

Nonetheless, the number of Next Directory's active customers rose by six per cent, with 953,000 people now on the database.

Next said the directory was now well-known and improved margins had been achieved.

Alongside traditional telephone sales, there were signs that the Internet could also generate significant revenue for the directory division, said Next.

Online sales grew by seven per cent in the half-year ending July.

Overall, group sales were up eight per cent, from £633 million to £685 million.