Advertisement
UK markets closed
  • NIKKEI 225

    39,173.15
    +368.50 (+0.95%)
     
  • HANG SENG

    18,072.90
    +45.19 (+0.25%)
     
  • CRUDE OIL

    80.77
    -0.86 (-1.05%)
     
  • GOLD FUTURES

    2,331.50
    -12.90 (-0.55%)
     
  • DOW

    39,103.32
    -307.89 (-0.78%)
     
  • Bitcoin GBP

    48,876.73
    +2,056.72 (+4.39%)
     
  • CMC Crypto 200

    1,285.12
    +36.00 (+2.88%)
     
  • NASDAQ Composite

    17,705.47
    +208.66 (+1.19%)
     
  • UK FTSE All Share

    4,493.07
    -21.69 (-0.48%)
     

Marks & Spencer in ‘best health in almost 30 years’ as sales soar

M&S
M&S

Marks & Spencer is in the “strongest financial health since 1997”, bosses have said, after sales at the FTSE 100 retailer jumped more than £1bn last year.

Stuart Machin, chief executive, said the company had “wind in its sails” after its profits surged 58pc, ahead of expectations, to hit £716.4m in the year to the end of March. Analysts had been expecting profits before tax and adjusting items of £684m.

M&S shares jumped almost 10pc to £30.02 following the update to investors, the highest level since 2017.

The sharper rise came despite a hit from its Ocado joint venture, where it recorded a £37.3m loss from the business compared to a £29.5m loss a year earlier.

ADVERTISEMENT

M&S said profits were boosted by cost-saving efforts as well as a 9.3pc jump in revenues in the year, to more than £13bn from £11.9bn a year earlier.

Excluding lease liabilities, M&S said it was sitting on cash of £45.7m at the end of March, compared with net debt of £355.6m a year earlier.

Mr Machin said M&S stores were “becoming more relevant, to more people, more of the time”, with a strong performance in its clothing and home division and its food businesses.

Stuart Machin
Mr Machin says trading momentum has given him 'confidence that our plan is working' - Handout/M&S

In food, sales were up 13pc over the year, following a major drive to improve the quality of its range. In clothing and homeware, sales rose 5.3pc. M&S said it now holds a 10pc share in the clothing and homeware market, compared to 9.6pc a year earlier.

Mr Machin said: “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.”

However, the retailer said it remained “disappointed” over its Ocado joint venture. While it said there had been a “marked” improvement in revenues at the online grocer as it rolled out more M&S products, profitability remained “well below original expectations” for the venture.

It suggested certain moves by its partner Ocado Group were putting pressure on the financial performance. This included Ocado Group charging “capacity fees” for a facility in Hatfield after the online grocer transferred to a new site in Luton.

M&S said: “With capacity fees for Hatfield continuing to be charged by Ocado Group, we do not currently expect Ocado Retail to reap the full financial benefit of transferring to the new site.”

It comes amid growing tensions between the two companies. Ocado last year warned it could sue M&S over the final payment for the joint venture, claiming profitability at the business had been affected by actions taken during the pandemic by both parties.

M&S has previously argued that the financial performance of Ocado Retail “means the criteria for the performance payment was not met”.

In the latest set of results, M&S said there was “so much opportunity” ahead for the retail giant. This includes accelerating cost-cutting efforts. M&S is now planning to strip £500m of costs out of its business by early 2028, having previously been plotting £400m in cost-savings.

Mr Machin said there was “much work to do” to help continue turnaround efforts, even after a “good year” for the retailer.