Marks and Spencer reports slump in profit hurt by clothing sales and cost of new food stores
High street stalwart Marks and Spencer has reported a more than 60pc fall in pre-tax profit in the year to the end of March, hurt by a decline in clothing sales and higher costs from opening new food stores.
Pre-tax profit came in at £176.4m for the year, while sales were broadly steady at £10.6bn. Food revenue was up 4.2pc.
"Last year we outlined a comprehensive plan to build strong foundations for the future. We said we would recover and grow clothing and home, continue with our plans for food growth, remove costs and simplify the business,” said chief executive Steve Rowe.
“We achieved a huge amount in the year and whilst there is still much to do, I am pleased with our progress and we remain on track,” he added.
He said that, as anticipated, the planned restructuring of the group had come with a cost that had impacted profits, “but the business is still strongly cash generative and we reduced our net debt”.
Net debt stood at £1.9bn for the year, down from £2.1bn in 2016.
Since announcing the results of a sweeping strategist review last year, M&S has opened 68 new food stores and completed consultation on shop closures in 10 loss-making international markets.
Looking ahead, the group said that the outlook for the overall clothing market remains uncertain and that improvements to style and fit would remain core to its strategy. It also said that it would continue to reduce the number of promotions and clearance sales and maintain its strong focus on food.
In Ireland the group is currently seeking a High Court injunction to halt redevelopment works at the Frascati shopping centre in Blackrock, Co. Dublin.
(Additional reporting by online editors)
Independent News Service