(Alliance News) – Marks & Spencer Group PLC on Wednesday reported a rise in first-half profit and drew attention to the “outstanding performance” of its apparel division, which has often been seen as its weakest offering.
Meanwhile, the company announced that it plans to save more than GBP150 million in costs in the financial year 2024.
Group revenue for the half year ending October 1 increased 8.5% year over year to GBP5.54 billion from GBP5.11 billion.
Profit before tax increased 11% to GBP208.5 million from GBP187.3 million.
“Trading in the first half has been strong with both businesses growing ahead of the market, reflecting the beginnings of a reshaped M&S. In Food, dependable value investing has driven top-line growth, but short-term earnings terms have been reduced, although the “The acquisition of Gist gives us control of one of our biggest cost and efficiency levers. The apparel has delivered outstanding performance from a market leading position in value with enhanced style credentials,” said CEO Stuart Machin.
M&S completed the purchase of Gist Ltd, M&S Food’s main contract logistics provider, at the end of September. It made an initial cash payment of GBP145 million and will pay up to GBP110 million more depending on the sale of freehold properties.
UK clothing and home sales were up 14% year-on-year, while UK food sales were up 5.6%. “As we enter our traditionally strongest quarter, business continues to perform well. Trade in the first four weeks of the second half is in line with forecasts, with apparel and home sales up 4.2 %, food sales 3.0% and international sales 4.1%. %,” M&S said.
Meanwhile, net debt fell 7.0% to GBP2.93 billion in early October from GBP3.15 billion a year ago.
Looking ahead, M&S said trading in its traditionally stronger third quarter has been good and in line with forecasts for the first four weeks, with apparel and home sales up 4.2%, sales of food of 3.0% and international sales of 4.1%.
M&S expects adjusted pre-tax earnings in fiscal 2023 to be in line with the guidance it provided at the time of the 2022 financial results. At the time, it said it had entered the new fiscal year on an earnings basis. lower adjusted and “currently we do not expect to progress from this lower earnings base in 2022-23,” due to higher costs and consumer uncertainty.
Looking ahead, the company aims to reduce costs by £150m in fiscal 2024 through technology-driven efficiency gains, cost reduction, simplification and supply chain efficiency.
Shares of Marks & Spencer fell 5.1% to 111.05 pence each on Wednesday morning in London.
By Tom Budszus; tombudszus@alliancenews.com
Copyright 2022 Alliance News Limited. All rights reserved.