M&S profits soar, announces first dividend in four years

Marks & Spencer on Wednesday posted surging half-year net profits and a first dividend since before Covid.

Profit after tax surged by a quarter to £208 million in the 26 weeks to the end of September year-on-year, the clothing-to-food retailer said in a statement.

Revenue jumped almost 11 per cent to £6.1 billion amid intense competition, as retailers battle for consumers’ cash amid a cost-of-living crisis sparked by elevated inflation.

News of the first shareholder payout in four years, at one pence per share, pushed M&S stock up 10.1 perc ent to 247.90 pence in late morning deals on London’s top-tier FTSE 100 index, which was flat overall.

“Our strategy to reshape M&S for growth has delivered strong results in the first half,” said chief executive Stuart Machin.

“We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price.”

M&S anticipated “good” trading in the upcoming peak-demand Christmas and New Year period, noting customers were “already responding positively” to festive products.

However, the retail giant warned over the “uncertain” economic backdrop, noting the impacts of high interest rates, potential deflation, geopolitical events and erratic weather conditions.

The group is still implementing a cost-cutting overhaul that was partly prompted by sector-wide fallout from the Covid pandemic.

M&S said its cost reduction drive was “on track” and delivered more than £100m in savings in the first half, which should climb to £150m over the year.

“M&S continues its transformation at speed,” said Richard Hunter, head of markets at online trading firm Interactive Investor.

“The amount of the dividend is nominal, but nonetheless is a statement of management confidence and reflects the improving health of the entire business.”