Marks & Spencer (MKS.L) unveiled a slump in sales and profits in the year to 31 March and launched a rights issue in order to raise over £600m ($761m) to fund a deal with online supermarket company Ocado (OCDO.L).
In its final results statement, M&S said pre-tax profits fell by nearly 10% in the year to £523.2m and like-for-like sales were down by 2.9% for the group.
M&S CEO Steve Rowe emphasised that the group was "deep into the first phase of our transformation programme” and that it continues to “make good progress restoring the basics and fixing many of the legacy issues we face.”
That transformation includes the shuttering of 100 shops by 2022.
“As I have said, at this stage we are judging ourselves as much by the pace of change as by the trading outcomes and change will accelerate in the year ahead,” he added.
"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 & Home. However, we remain on track with our transformation and are now well on the road to making M&S special again."
Meanwhile, M&S also announced a rights issue — which is when a company issues news shares at a special price to existing investors in order to get more money for the group. It said it hopes to raise £601.3 million that will help fund its joint venture with Ocado.
M&S will pay up to £750m for 50% of Ocado’s UK retail operation under the deal. M&S’ range will replace Waitrose on Ocado.com when the Waitrose contract ends in 2020.