22nd May 2024 10:28
(Alliance News) - Marks & Spencer Group PLC reported robust annual results on Wednesday as its turnaround story continues, offering hope that "the UK consumer is alive and well".
The London-based retailer said statutory revenue in the year to March 30 rose 9.3% to GBP13.04 billion from GBP11.93 billion a year prior.
Pretax profit jumped 41% to GBP672.5 million from GBP475.7 million.
Chief Executive Stuart Machin said: "We have a clear plan, a clear vision for the future, and there is so much opportunity ahead of us. We are at the beginnings of a new M&S."
Food sales rose 13%, with adjusted operating profit jumping 59% to GBP395.3 million from GBP248.0 million a year ago. Clothing & Home sales climbed 5.3%, with adjusted operating profit in the unit up 24% to GBP402.8 million from GBP323.8 million.
In Food, M&S said it has delivered "market-leading volume growth and strong innovation whilst broadening customer appeal". In C&H it highlighted "market-leading share growth".
XTB analyst Kathleen Brooks commented: "M&S has posted some stellar growth figures for the previous quarter, suggesting that the UK consumer is alive and well and still willing to splash the cash on their premium products, especially Food."
Brooks noted that it was not just the Food arm which shone. The Clothing & Home arm, once a laggard, is now also pulling its weight.
"A shift has happened at M&S in recent months. Its fashion offering has gone off the charts, tailoring is good quality for a decent price, and the style of its ranges can also compete with the higher end 'affordable luxury' brands for sale elsewhere. It has not only made M&S a go-to for the fashion conscious, but it has also accumulated multiple brands that are attracting new customers and helping it to truly become a one-stop shop for the discerning consumer," Brooks added.
Free cash flow from operations more than doubled to GBP413.7 million from GBP170.4 million.
M&S, which recently restored its dividend after a four-year hiatus, declared a 2.0 pence per share final payout. It means its total dividend for the year amounts to 3p, having not paid one in financial 2023.
Shares in the company were up 7.4% to 294.00 pence each in London on Wednesday morning. Shares are over 80% higher than they were a year prior.
Wealth Club analyst Charlie Huggins commented: "All-in-all, M&S' execution has been impressive in a difficult retail environment. Encouragingly, it sounds like there are plenty more self-help initiatives to go for, to keep this momentum going.
"The only fly in the ointment is that investor expectations have now been reset to a higher level. This means the pressure on M&S to keep delivering has increased, and any slip ups are likely to be harshly punished."
By Eric Cunha, Alliance News news editor
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