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Marks & Spencer business is in good shape

10
Nov '10
Marks & Spencer announced Interim Results of 2010/11.

Half-year results:

• Sales up 5.4% at £4,569.7m: UK +5.6%; International +3.8%
• UK like-for-like sales +4.4%: General Merchandise +6.3%; Food +2.6%
• Adjusted operating profit1 +12.1% to £409.2m (last year £365.0m)
• Adjusted profit before tax1 +16.9% to £348.6m (last year £298.3m)
• Profit before tax £348.6m (last year £306.7m)
• Adjusted basic earnings per share +21.2% to 16.6p1 (last year 13.7p)
• Interim dividend up 12.7% to 6.2p per share (last year 5.5p)
• Net debt £2.2bn (last half year £2.4bn)

Business highlights:

• Increase in Clothing market share of 60bps2 to 11.2% with growth across all areas
• Increase in Food market share of 10bps3 to 3.6%
• Continued improvement in customer price perceptions in Clothing and Food
• 940 new lines launched in Food
• Gross margin up 25 bps
• Direct sales up 49%
• International sales up 3.8% to £462.0m; 20 new stores opened

Update highlights:

• Evolution not revolution – building on success
• By 2013/14:
oDeliver group revenues of between £11.5bn and £12.5bn
o Focus on the UK business to deliver £1.0bn to £1.5bn of new revenues
o Become a leading UK multi-channel retailer with revenues of £800m to £1.0bn
o Target International (excl. Republic of Ireland) revenues of £800m to £1.0bn
• Project 2020 to be accelerated and deliver an additional £50m benefit
• £850m-900m additional capital investment over the next three years with target IRR of 12-15%
• Maintain a progressive dividend policy with broadly two times cover

Commenting on the Half Year Results, Marc Bolland, Chief Executive, said: "Marks & Spencer has had a strong first half. Profit before tax was up 17%, earnings per share up 21%, and the Board has approved a half year dividend of 6.2p per share, an increase of 12.7%. "In Clothing, we grew market share in all areas as we gave our customers better fashions, more choice and great value. In Food, more customers chose to shop with us recognising our quality, innovation, and improved values.

Commenting on the update, Marc said:“The business is in good shape and we have strong foundations on which to build through evolution not revolution.

“We will begin by focusing on the core UK business. For our customers this means that in Clothing we will improve our core M&S ranges, so that the unique quality, style and fashion of the M&S brand stand out. We will also clarify the position of our sub-brands, moving them from labels to real brands.

“In Food, we will establish a clear market position as a specialist high-quality retailer, inspiring customers with our unrivalled quality and innovation. Our focus will be on fresh, speciality and convenience, bringing the Best of British and Flavours of the World to our customers.

“Over the first three years we will also build our multi-channel and international capability. This will develop M&S into an international multi-channel retailer, making the M&S brand more accessible to more customers around the world.”

Click here for more details

Marks & Spencer Plc


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