Achi news desk-
Marks & Spencer reported a surge in underlying profit before tax to £716.4 million in the year to March 30, from £453.3m in the previous 12 months.
The results were headlined: “New beginnings for M&S.”
Food sales increased by 13% during the year. There was an increase of 5.3% in sales of clothes and homes.
Marks & Spencer shares rose 14.2p, more than 5%, to 288p.
READ MORE: Ian McConnell: This great enthusiasm for Scotland may not bring joy to everyone
Mr Machin said: “Two years into our plan to ‘Reengineer for Growth’ we can see the beginnings of a new M&S. Food, clothing and home value share grew ahead of the market and sales increased across stores and online. Both businesses have now achieved 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working. We’re becoming more relevant, to more people, more of the time.”
He added: “We remain steadfast in our commitment to trusted value, offering customers exceptional quality at the best possible price. The perception of leading food quality increased even further with over 1,000 products upgraded and 1,300 new lines launched. Continued progress was made on value perception, with £60 million invested in the price. In clothing and home, style perception continued to improve.”
Mr Machin claimed that Marks & Spencer’s “definite leadership on the perception of quality and value has been extended” in clothing and home.
The retailer highlighted its “ability to accelerate high return investment and to restore a full year dividend of 3 pence per share”.
READ MORE: Revealed: Scotland’s top 100 private companies
Mr Machin said: “Disciplined capital allocation underpins our plan, and the financial health of the business is as strong as it has been for decades. Free cash flow has increased, net financial debt has been eliminated, and returns on investments have improved. The strength of the balance sheet, together with the continued improvement in performance, means we have the space and confidence to invest for future growth as well as deliver a 3p dividend.”
READ MORE: Ian McConnell: The thing Labor and the Conservatives don’t want you to know
Russ Mould, investment director at stockbroker AJ Bell, said: “As Marks & Spencer knows from first-hand experience, corporate transformations are difficult to achieve and even more difficult to sustain. There tend to be some quick wins but changing the culture is harder than climbing Mount Everest and it’s easy for businesses to slip into old habits, often to their detriment.
“Judging by Marks & Spencer’s latest results, it may be one of the select few companies to achieve lasting change. The turnaround story has been years in the making and it finally looks like the retailer has cracked it. Food products are flying off the shelves and it has finally struck a chord with shoppers on the clothing side. Improved free cash flow has helped to strengthen the balance sheet, bring dividends back to shareholders, and provide options to accelerate investment in the business.”
He added: “In an environment where so many retailers are struggling, Marks & Spencer has taken the crown from Next and become the shopper others aspire to be. It’s back on top and 12 consecutive quarters of sales growth confirm its new status as the UK’s retail champion.”
However, Mr Mold emphasized his view that “despite this positive situation, there is still much more to be done” for Marks & Spencer.
He said: “The Ocado joint venture needs to pull its socks up and the international operations are not as strong as they once were. By its own admission, Marks & Spencer needs to move faster with efforts to offer a more personalized service. Fortunately, having the core business doing well means it can afford to take a little longer to fix the other pieces.”
