Marks and Spencer Group PLC on Wednesday highlighted ‘market-leading’ progress at both its Food and Clothing & Home offerings as it reported a sharp jump in annual profit.
Chief Executive Stuart Machin said: ‘We have a clear plan, a clear vision for the future, and there is so much opportunity ahead of us. We are at the beginnings of a new M&S.’
Shares in M&S rose 9.3% to 299.25 pence in London on Wednesday. The wider FTSE 100 was down 0.5%.
The London-based retailer said statutory revenue in the year to March 30 rose 9.3% to £13.04 billion from £11.93 billion a year prior.
Pretax profit jumped 41% to £672.5 million from £475.7 million.
Food sales rose 13% with adjusted operating profit there jumping 59% to £395.3 million from £248.0 million a year ago. Clothing & Home sales climbed 5.3% with adjusted operating profit in the unit up 24% to £402.8 million from £323.8 million.
In Food, M&S said it has delivered ‘market-leading volume growth and strong innovation whilst broadening customer appeal’. In C&H it highlighted ‘market-leading share growth’.
Sales in its International business fell 1% with adjusted operating profit decreasing to £47.7 million from £67.9 million a year ago.
M&S said its share of the Ocado Retail joint venture adjusted loss was £37.3 million, compared with £29.5 million a year prior.
M&S intends to increase its 5-year cost savings objective to £500 million from £400 million, after delivering £180 million of savings in the financial year just ended.
Free cash flow from operations more than doubled to £413.7 million from £170.4 million.
M&S, which recently restored its dividend after a four-year hiatus, declared a 2.0 pence per share final payout. It means its total dividend for the year amounts to 3p, having not paid one in financial 2023.
Machin said: ‘Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing & Home grew volume and value share ahead of the market and sales increased across stores and online. 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.’
‘Looking to the new year, it said it will make a ’further significant investment in colleague pay‘.
M&S added: ’This will be funded by structural cost reductions and other efficiencies. Other cost inflation will largely be offset by reduced energy costs.‘
‘Given our track record of delivering volume growth, market share and free cash flow we are confident that we will make further progress in 2024/25 and beyond.’
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