5th Nov 2013 07:51
LONDON (Alliance News) - Marks & Spencer PLC Tuesday reported flat pretax profits for the first half of the year but an uptick in group sales, as its food business continued to offset lagging fashion sales.
The group reported broadly flat pretax profit of GBP280.6 million for the first half of the year, ended September 28, compared with GBP280 million in the same period last year. It reported a net profit of GBP249.6 million, compared with GBP220.0 million a year before, largely due to lower income tax expense compared with the prior year.
The company maintained its interim dividend at 6.2 pence per share.
M&S said it remained cautious about the outlook for the remainder of the year due to continued pressure on consumers' disposable incomes, but said its overall expectations for the full year remain unchanged.
As expected, the department-store chain said that general merchandise sales on a like-for-like basis fell a further 1.5% in the first half of the year.
In sharp contrast, the M&S food division reported like-for-like sales growth of 2.5% in the first half, driven by a strong second quarter.
Besides its food division, M&S also reported a strong performance from its international business, and M&S online.
International sales were up 8% in the first half, while M&S's online sales rose 29%.
The group reported first half revenues of GBP4.88 billion, compared with GBP4.70 billion a year earlier.
Chief Executive Officer Marc Bolland launched a three-year plan back in 2010, with hopes of turning around M&S's declining general merchandise sales and rebuilding its image as an international, multi-channel retailer.
In a bid to attract a younger female audience to buy its clothing, M&S splashed out on a high-profile advertising campaign for its womenswear autumn/winter collection.
However, the drive failed to live up to expectations, and shares in the company began to decline.
"Although only in store for three weeks of the half year, our Autumn/Winter collection has been well received by customers, and we have seen some early signs of improvement," Bolland said Tuesday.
Marks & Spencer said that it is continuing to invest in the long-term transformation of the business, and from 2014-15 will move to a lower, more sustainable long-term investment level of around GBP550 million per annum.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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