M&S reinstates dividend and CEO Stuart Machin promises he’s not done yet
Marks and Spencer (M&S) racked in hefty profits during the half year, as the firm’s reshaping programme continues to show signs of paying off.
The Percy Pig maker posted profit before tax of £360.2m up nearly £100m on last figures of £205.5m.
M&S also reported a 14.7 per cent rise in food sales as its investment in price cuts and improving quality drove shoppers to its aisles, it said in a trading update to markets this morning.
The clothing and homeware division – which has been revamped in recent years to appeal to a more trendy audience- also saw sales rise 12.1 per cent.
As a result of its strong results the firm said it would return paying a “modest dividend” – its first in four years.
Chief Stuart Machin, said: “Our strategy to reshape M&S for growth has delivered strong results in the first half.
“We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price.
“In food, we delivered over 500 quality upgrades and invested over £30m in price, lowering the price of 200 products and locking prices on 150 customer favourites.”
Machin promises to accelerate the pace of the firm’s store renovation plan. A refit of the firm’s Oxford Street flagship was nixed by Michael Gove in a high profile battle earlier this year.
At Ocado, the online grocery it owns as part of a joint venture, retail sales increased 6.9 per cent, however the arm posted an adjusted loss of £23.4m up from £0.7m last year.
M&S said that delivery service which has struggled in recent years is also in the early stages of a reset programme, which will include increased price cuts and stocking more M&S products online.
The company’s share price rose by over eight per cent this morning as the UK market responded to the news.