M&S remains cautious despite profit rise

Marks & Spencer’s group sales increased 3.2% to £9.3bn in the year to March 27 2010, while adjusted profit before tax rose 4.6% to £632.5m, according to a statement of results released today.

M&S remains cautious despite profit rise

UK revenue also went up 2.9% to £8.4bn, with like-for-like sales up 0.9%. The report credited the revenue increase to actions taken over the last year to manage the business through the downturn, as well as an improvement in market conditions and consumer spending.

Chairman Sir Stuart Rose said: “Marks & Spencer has had a good year. We have improved performance in all core areas, demonstrating the resilience of the M&S brand. We took action to guide M&S through the recession without losing sight of what matters most to our customers – quality and value.”

Home performed well for the retailer, with customers embracing its ‘Improve Don’t Move’ campaign. Two standalone M&S Home stores opened in Aberdeen and Cheltenham, with a third outlet due to open in Tunbridge Wells this autumn. The company sold more home products in a lifestyle setting alongside food and clothing ranges, including the new Kids at Home range which sold alongside Kidswear.

Total homewares revenue for the UK increased by 2.1% for the period.

M&S Energy also grew strongly with nearly 300,000 customers now signed up, increased from 65,000 last year, according to the report. The service has been extended further, with a new Home Energy Services division, offering a range of energy efficient products such as loft insulation, solar panels and heat pumps.

Sir Stuart also commented on the recent appointment of new ceo Marc Bolland. He said: “I am delighted that Marc Bolland has now joined us as chief executive. I look forward to working with him to ensure a smooth transition, and with the Board to identify a new chairman. With the worst effects of the recession behind us, strong foundations in place, and our core values intact, I am confident that M&S is well set for growth under Marc’s direction.”

He added: “We have had a satisfactory start to the first quarter. Consumers are naturally concerned about any impact of the Budget on 22 June. We therefore remain cautious about the outlook for the year ahead.”

Staff shared a bonus payment of £80.9m this year, a huge increase on last year’s £2.8m, which the report said reflects the out-performance of the business against its operating plan.

This month, M&S became the first high street retailer to deliver a fully mobile enabled website, allowing customers to shop from their mobile phones.

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