Marks & Spencer has posted its highest annual profits in over a decade, enabling it to pay its first full year dividend since the Coronavirus pandemic.
Chief executive Stuart Machin hailed M&S’ performance for the 52 weeks to the end of March and was bullish about its future prospects, having seen its food and clothing and homewares units achieve 12 consecutive quarters of growth. “Overall, we are in good shape, but we’re only at the beginnings of a new M&S,” he said.
M&S made a full year pre-tax profit of £672.5million, an increase of 41.4 percent on the previous year, and its best result since 2011, when they hit £780.6million. Its revenues climbed 9.3 percent to £13billion.
The retailer’s strong financial performance means it can resume full year dividends at 3p per share, which is worth £60.4million to shareholders. M&S axed shareholder payouts at the onset of the Covid-19 pandemic to save cash.
“This trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time,” Machin said. “We have a clear plan, a clear vision for the future, and there is so much opportunity ahead of us.”
He highlighted impending new food launches and soon to be released womenswear collaborations as reasons for optimism. Additionally, he pointed out that M&S has increased its cost savings target from £400million to £500million, with its supply chain being the “biggest opportunity”.
Machin also said that although the profitability of its online supermarket Ocado is unsatisfactory, its performance is improving, while he has high hopes for the new management team that it parachuted in to turnaround its international division.
He also reiterated that M&S will not buckle and pay performance bonuses to its joint venture partner Ocado Group, despite legal threats from the latter.
Even Ocado Group admits that the eponymous online supermarket did not hit the targets it needed to trigger in £190.7million bonus payments from M&S, it still wants the money to be paid and has threatened to sue to get it. “The performance targets were binary. They were not hit, so that’s pretty clear,” Machin said.
