Marks & Spencer sees growth in profit after four-year drought

The financial stats

Over the last financial year, Marks & Spencer has experienced a steady increase in overall growth profit for the first time in four years.

Established in Leeds over 100 years ago, the retailer enjoyed a 0.4% in revenue to £10.3bn, with £9.2bn accumulating from domestic sales and £1bn internationally.

Furthermore, M&S’ underlying profit before tax is also up 6.1% to £661.2m, which is an increase of nearly £40m.

However, there was a 8.6% dip in the London-headquartered retailer’s basic earnings per share, which dropped from 32.5p to 29.7p. Additionally, general merchandise like-for-like sales were also down 3.1% for the year, although this figure improved in the fourth quarter.

The success of the last financial year is largely due to the opening of 62 new Simply Food stores, all performing ahead of expectations, as well as the 1,700 new products introduced to customers.

Comment

Marc Bolland, Chief Executive, said: “We made good progress in three of our four key priorities for the year. In Food, we had an outstanding year in a difficult market. In GM, we significantly increased the gross margin, and, while sales performance was below our expectations, we returned to growth in the fourth quarter.

“We continued to control costs and capital expenditure tightly, resulting in significantly improved free cash flow.

“We are transforming M&S into a stronger, more agile business - putting the right infrastructure, capabilities and talent in place to drive our strategic priorities.”

Robert Swannell, Chairman, said: “We are a more capable business following a sustained period of investment in our infrastructure and in our people. Our focus continues to be on delivery of the strategy and improvement in shareholder returns.

“In line with our policy, the Board is recommending a final dividend of 11.6p per share, resulting in a full year dividend of 18p, 5.9% up on last year. In the context of continuing increased free cash flow in the business we are also pleased to announce the start of an ongoing programme of enhanced returns for shareholders with a share buyback programme of £150 million in the current year.”