Wed. Dec 1st, 2021

Marks and Spencer shares rose more than 15 per cent after saying full-year earnings would beat forecasts as one of the UK’s best-known retailers enjoyed a recovery from pandemic disruption.

The group said annual profit, before taxes and adjusted items, would be in the “around £ 500 million” range, aided by an improved performance of its food business.

The forecast came when M&S reported a pre-tax profit of £ 187 million in the six months to October 2, compared to a loss of £ 88 million in the same period last year.

Food sales for the half-year were 10 per cent higher than the equivalent pre-Covid period, which generated a profit of £ 269 million, while clothing and home sales were 1 per cent lower, but the profit was almost 50 per cent higher at £ 156 million . The group’s 50 per cent stake in Ocado Retail made a contribution of £ 28 million in half.

“Given the history of M&S, we were clear that we would not overestimate our progress,” says CEO Steve Rowe, “but thanks to the hard work of our colleagues, it is clear that the underlying performance is improving. . . the hard meter of driving long-term change is beginning to be confirmed in our performance. ”

Online sales are now 34 percent of the total, as evidenced by the shift to e-commerce during the pandemic.

Before today’s gains, M&S shares have risen more than 60 percent over the past year, reflecting the recovery from the darkest days of the pandemic, but also growing confidence that its long-term restructuring efforts are bearing fruit.

However, despite the better performance, M&S said on Wednesday that a return to dividend payments this year is unlikely.

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