Retail giant Marks & Spencer has posted a 10% drop in annual profits amid a sweeping overhaul that will see it shut another 110 stores.
The high street bellwether said it is closing another 85 full-line stores and around 25 Simply Food outlets on top of the 35 full-line branches closed in 2018-19 under a previously-announced restructure.
But it said the overall size of the chain will remain in line with plans as it also opens and relocates shops, having launched another 48 full-service stores in the past financial year.
It said the food closures come as it focuses efforts on larger Simply Food shops with parking access, which will mean shutting and relocating smaller, less busy outlets.
Chief executive Steve Rowe said: “Our strategy is as much about right sizing, relocating and new openings as it is about closures.”
“Our overall numbers of stores will remain broadly level,” he added.
The store closure details came as it posted underlying pre-tax profits of £523.2 million for the year to March 30, down 9.9% from £580.9 million the previous year.
Shares fell 5% as the results confirmed a hefty cut to its shareholder dividend payout, down 25.7% to 13.9p a share.
Mr Rowe said there were “green shoots” of a turnaround, but added that performance was not consistent and had been hit by its store closure programme and wide-ranging revamp plan.
The group warned that it remained in the “difficult early stages” of its turnaround and progress will largely not come until the second half of 2019-20.
Comparable sales in its troubled womenswear arm dropped 1.6% with a 1.3% fall in the final three months after it was hit by the timing of Easter and poor stock availability.
Like-for-like sales in its food halls fell 2.3% following a 1.5% decline in the fourth quarter, although this was also affected by the timing of Easter.
Mr Rowe said: “Whilst there are green shoots, we have not been consistent in our delivery in a number of areas of the business.
“M&S is changing faster than at any time in my career – substantial changes across the business to our processes, ranges and operations – and this has constrained this year’s performance, particularly in clothing and home.
“However, we remain on track with our transformation and are now well on the road to making M&S special again.”
The results showed statutory pre-tax profits stood at £84.6 million, up 26.6% on the previous year.
M&S also released details of a £601.3 million rights issue to finance its joint venture with online grocer Ocado.
The investor cash call will help fund the deal with Ocado to boost its food offering and online delivery service.
Arlene Ewing, investment manager at Brewin Dolphin, said: “These results underline that M&S is going through a significant overhaul.
“The major news is the £601.3 million rights issue for the Ocado joint venture and the cut to the dividend – both moves will likely mean short-term pain for shareholders.
“Of course, the hope is that a much stronger business will emerge on the other side – but we will only know whether it has worked years down the line.”