M&S Posts First Rise In Profits Under Bolland

M&S has revealed pre-tax profits up 3.4% to £600m, the first rise in full-year profits since Marc Bolland took over the reins four years ago.

The UK's biggest clothing retailer, posted results that were at the top-end of analyst forecasts.

M&S reported that food sales were up 0.6% while general merchandise fell 3.1%.

Referring to general merchandise which includes clothing, the company said the UK retail sector was impacted by the third warmest autumn on record and M&S was disproportionately affected due to its high market shares in winter categories such as knitwear and coats.

Despite the positive numbers, M&S and its chief executive still face tough challenges. Marc Bolland's remit when he joined M&S four years ago, was to deal with flagging sales in the company's clothing range - clearly this has not materialised to any extent yet.

Speaking to Sky News, Mr Bolland said he was "very pleased" the company had reported profit growth in a "difficult retail market." Asked whether he was concerned that clothes sales were still below target, he conceded there was still work to be done but that progress had been made.

He pointed to stronger sales in the first quarter and said he was confident M&S designers were doing a "great job" improving the style and quality of clothing.

Online business too presents some food for thought for the company. M&S.com sales were down 2.0% over the year.

This was following its move from the Amazon platform. This was the first full year in which it had control of its own website.

The new site “presented a bigger change for our customers than we had anticipated, which impacted sales, ” the company said.

International sales were also under pressure, down 2.1% on a constant currency basis (down 5.7% on reported currency).

The company said that last year has been very turbulent geopolitically in a number of its franchise territories. In particular performance in Russia, Ukraine and Turkey, were impacted by political instability and local currency fluctuations resulting in lower shipments.

In China, M&S took the decision to focus on Shanghai and closed five of its smaller regional stores. It also announced its intention to open flagships in Beijing and Guangzhou.

M&S raised its dividend 5.9% to 18p and announced the start of an ongoing programme of enhanced returns for shareholders with a share buyback of £150m for the 2015-16 year.

M&S shares were down 0.6% on early trading.