Marks & Spencer toasts first profit increase in four years
Marks & Spencer has broken a four year drought of profit increases in its latest trading update after reporting a pre-tax profit of £661.2m for the year to 28 March – 6.1 per cent higher than last year.
The growth was driven by food, which delivered a 3.4 per cent increase in sales.
Chief executive Mark Bolland said the specialist ranges have helped it buck the trends of the challeging grocery sector seen by middle-market competiors such as Sainsbury's, Adsa and Tesco.
For example, the Taste range benefitted from an aboce the line campaign launched last year with the increased awareness driving six million units to be sold over the past six months.
"It's very specialist but very well taken up in the market. Customers continue to come with differentiated offer," said Bolland. "Our specialist positioning means we are removed from the competition elsewhere but we do need to remain conscious".
The savings made in ongoing improvements to its supplier programme are being reinvested into food price and quality.
The strong food performance has results in M&S ramping up its plan for new stores, with 250 (up from 200) now expected by 2017 in underrepresented areas such as Glasgow.
Depsite teething problems following the lauch of its standalone website last year, Bolland said overall traffic is up 15 per cent while mobile and tablet is up 30 per cent.
He added that customer satisfaction with the online offering has also jumped by 18 per cent.
The clothing, homeware and food retailer has promised to return this surplus cash to shareholders, fuelling investor confidence that the big beast of the High Street may getting some roar back.
This will take the form of a 5.9 per cent rise to dividend payments and a £150m share buyback programme.
Commenting on the rosier picture presented by today’s figures M&S chairman Robert Swannell said: "We are a more capable business following a sustained period of investment in our infrastructure and in our people.”
Management see the turnaround as vindication of an investment drive spearheaded by chief executive Marc Bolland that has pumped billions in products, stores, logistics and website to win back custom.