Marks & Spencer profits up 30 percent

Source: Stock Market Digital

Date :22/05/2007 09:06:23

Marks & Spencer has posted a 28.5 percent increase in annual pre-tax profit to £965.2 million, just shy of the record £1 billlion it saw in 1998 before its much reported decline.

The results represent a remarkable recovery as the company has transformed itself from a failing brand to a powerhouse of high street fashion.

The company's staff will share a bonus of £90 million, including £26 million for customer assistants, the company said.

M&S also said it is to create 10,000 jobs over the next three years as store expansion continues.

Strong sales

The company's recovery has been driven by strong sales growth.

M&S reported a 6.1 percent increase in underlying UK sales, with new stores stripped out.

As a result, the company increased its market share in both food and clothing.

It now has 11.1 percent of the UK clothing market, an increase of 0.7 percent, while its food market share rose 0.2 percent to 4.3 percent.

Mr Rose cautioned the retail environment would become "more challenging" with increased competition and added pressure on consumer spending as a result of interest rate rises, but he expected progress at the company to continue.

Clothing and food

The strong performance was driven by increased demand of M&S food and clothing, which was supported by a high profile advertising campaign featuring 1960s model

Twiggy, singers Myleene Klaas and Brian Ferry and other well-known faces.

"We continue to improve our product ranges, offering customers better quality, value, innovation and newness," said chief executive Stuart Rose.

"Service standards have improved. We continue to invest in modernising our stores and 70 percent of our store portfolio will be modernised by the end of the year."

The former Arcadia boss is widely credited for turning around the company's fortunes when he took over in 2004, saving M&S from a takeover from millionaire entrepreneur and Arcadia owner Philip Green.

Shares in M&S jumped nearly 3 percent in morning trade.

May 22 2007