TOP NEWS: Shares in upbeat M&S leap as Food sparks profit increase

(Alliance News) - Marks and Spencer Group PLC on Wednesday highlighted "market-leading" progress ...

Alliance News 22 May, 2024 | 8:20AM
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(Alliance News) - Marks and Spencer Group PLC on Wednesday highlighted "market-leading" progress at both its Food and Clothing & Home offerings as it reported a sharp jump in annual profit.

Chief Executive Stuart Machin said: "We have a clear plan, a clear vision for the future, and there is so much opportunity ahead of us. We are at the beginnings of a new M&S."

Shares in M&S rose 9.3% to 299.25 pence in London on Wednesday. The wider FTSE 100 was down 0.5%.

The London-based retailer said statutory revenue in the year to March 30 rose 9.3% to GBP13.04 billion from GBP11.93 billion a year prior.

Pretax profit jumped 41% to GBP672.5 million from GBP475.7 million.

Food sales rose 13% with adjusted operating profit there jumping 59% to GBP395.3 million from GBP248.0 million a year ago. Clothing & Home sales climbed 5.3% with adjusted operating profit in the unit up 24% to GBP402.8 million from GBP323.8 million.

In Food, M&S said it has delivered "market-leading volume growth and strong innovation whilst broadening customer appeal". In C&H it highlighted "market-leading share growth".

Sales in its International business fell 1% with adjusted operating profit decreasing to GBP47.7 million from GBP67.9 million a year ago.

M&S said its share of the Ocado Retail joint venture adjusted loss was GBP37.3 million, compared with GBP29.5 million a year prior.

M&S intends to increase its 5-year cost savings objective to GBP500 million from GBP400 million, after delivering GBP180 million of savings in the financial year just ended.

Free cash flow from operations more than doubled to GBP413.7 million from GBP170.4 million.

M&S, which recently restored its dividend after a four-year hiatus, declared a 2.0 pence per share final payout. It means its total dividend for the year amounts to 3p, having not paid one in financial 2023.

Machin said: "Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing & Home grew volume and value share ahead of the market and sales increased across stores and online. Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working."

"Looking to the new year, it said it will make a "further significant investment in colleague pay".

M&S added: "This will be funded by structural cost reductions and other efficiencies. Other cost inflation will largely be offset by reduced energy costs."

"Given our track record of delivering volume growth, market share and free cash flow we are confident that we will make further progress in 2024/25 and beyond."

By Jeremy Cutler, Alliance News reporter

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Marks & Spencer Group PLC 303.30 GBX 0.23

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