Marks &Spencer recovers its spark

MARKS & SPENCER shareholders will receive £20 million (€23 million) in dividends next January for the first time since 2019.

Pre-tax profits climbed by an unexpected 56 per cent to £326 million (€374.5 million) in the six months ending on September 30 as the company focused on revamping stores, clothing lines and its digital offer.

Clothes sales rose 5.5 cent while profit margins increased to more than 12 per cent compared with 9.8 per cent during the same period in 2022, with fewer items sold at reduced prices.

Food sales increased by almost 12 per cent while the Remarksable budget range rocketed by 45 per cent.

Despite the buoyant half-year results, chief executive Stuart Machin  viewed the remainder of 2023 and the coming year with caution, warning on November 8 that the recent and favourable market conditions might not persist.

High interest rates, slower price rises, global conflict and erratic weather could hit trading, he said, although he was “hopeful” that the company’s growth would continue.

“Against more challenging comparatives, we expect profit before tax and adjusting items to be weighted towards the first half,” the chief executive added.

One drawback for Marks & Spencer has been the company’s association with online grocer which registered a £23.4 million (€26.9 million) operating loss in the first six months of the year.

Although the company admitted earlier that it “was not happy” with the online grocery retailer’s performance, Machin said he remained positive about its potential “although this could take three years to achieve.”

The group’s shares rose 9 per cent 245.5p (€2.82) on publication of the half-year result and have climbed more than 90 per cent since January, making it the second-best performer in the FTSE 100 after Rolls-Royce.