- Group sales £4.9bn (last half year £4.7bn)
- Underlying profit before tax3 £261.6m (last half year £287.3m4)
- Underlying basic earnings per share3 13.5p (last half year 14.1p4)
- Interim dividend 6.2p per share (last half year 6.2p)
- Net debt £2,787.2m (last half year £2,629.7m)
- Profit before tax £280.6m (last year £280.0m4)
- Basic earnings per share 15.5p (last year 13.8p4)
Marc Bolland, Chief Executive, said, “Marks & Spencer made progress with a strong performance in Food, International and M&S.com. Our key priority was the re-launch of Womenswear. In September we launched our first new collection with new advertising and improved store formats.
“Although only in store for three weeks of the half year, our Autumn/Winter collection has been well received by customers, and we have seen some early signs of improvement.
“At the same time we continued to invest in the long term transformation of the business. We are pleased with the progress made, given the high level of activity and a number of key projects launching this year. This has led to a higher level of additional costs, which while planned for, have impacted short-term results.
“This year marks the final year of elevated capital investment in the business. From 2014/15 we will move to a lower, more sustainable long-term investment level of c.£550m. This, combined with the operational improvements we are making, makes us confident that we will deliver a material improvement in free cash flow from 2014/15, and we remain focused on delivering improved shareholder returns.”
Current trading and outlook
While consumer confidence appears to be improving, there is little evidence as yet of this translating to increased spending in the retail sector. Given continued pressure on disposable incomes, we remain cautious about the outlook for the remainder of the year. However, we are well set up for the key Christmas trading period with more innovation and choice than ever before. Our overall expectations for the full year remain unchanged.
Guidance for financial year 2013/14:
- Gross margin is expected to grow by 30bps to 50bps. Within this, we expect GM gross margin to be up on the year, while Food gross margin will be ahead of the guided range.
- Operating costs are expected to increase by c.3.5%, or 4.5% including the impact of double running costs.
- Group capital expenditure is expected to be c.£775m, and £550m from 2014/15.
- The planned opening of new space will add c.2% to UK and c.15% to International space.
- Effective underlying tax rate is expected to be 20%, lower than the previous guidance of 21.5%.
Marks & Spencer
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