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Marks and Spencer has posted its highest profit in more than a decade and will pay its first dividend since 2019 after a big revival in its food and clothing divisions.
The 140-year-old retailer posted a profit before tax and adjusted items of £716mn for the year to March 30, beating analysts’ expectations and the £453mn it made the previous year. It last recorded underlying profits of £714.3mn in 2011.
The impressive results boosted shares 8 per cent to 295.2p in morning trade in London on Wednesday.
M&S has been buoyed by its food and clothing and home divisions, with sales up 13 per cent and 5.3 per cent, respectively, as the company’s turnaround plans start to pay off. Group revenues rose by 9.4 per cent to £13bn, while pre-tax profit was up 41.4 per cent to £672.5mn.
After two decades of false dawns, chief executive Stuart Machin said: “Two years into our plan to reshape [the business] for growth we can see the beginnings of a new M&S.
“This trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time.”
M&S said it was in the strongest financial health since 1997 after it ended the year with net funds of about £46mn, excluding lease liabilities. It will also pay a full-year dividend of 3p a share — the first in five years following 12 consecutive quarters of sales growth.
The company has been closing less profitable or productive stores that sold clothing, home and food products in recent years and opened more of its popular food shops.
It has also modernised its clothing ranges and has been seeking to convince more shoppers to do a “full shop” with M&S rather than only visit for special occasions or top-ups by improving the quality and price of its products.
M&S was among the fastest-growing supermarkets in the latest 12-week period, according to industry data from NIQ, beaten only by Lidl and Ocado. In April, it had a market share of 3.6 per cent compared with rival Waitrose at 3.8 per cent.
Clive Black, a retail analyst at Shore Capital, said he expected sales to continue to grow but did not expect such strong performance again this financial year.
“Given our 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,” M&S said.
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