UK: Food shines as M&S profit slumps
By Katy Askew | 6 November 2012
- H1 pre-tax profit drops to GBP290m
- UK like-for-like sales down 1.4%
- Strength in food offset by decline in general merchandise
 |
M&S strong food performance offset by weakness in general merchandise |
UK retailer Marks and Spencer today (6 November) revealed a near-10% drop in first-half profits as sales gains at its food business failed to offset a decline in general merchandise.
The company booked first-half pre tax profit of GBP290m (US$463.4m), down from GBP321m last year. Group sales in the period rose 0.9% to GBP4.7bn, as a 3.4% gain in food revenue was offset by a 2.5% drop in general merchandise. UK like-for-like sales were down 1.4% in the six month period.
Commenting on the result, CEO Marc Bolland emphasised the company had been able to slow its UK like-for-like decline in the second quarter.
"We are pleased to report a better performance across the business in the second quarter. We took steps to address the short term merchandising issues in general merchandise and as a result, we delivered an improved performance. Food outperformed the market on a like-for-like basis," Bolland said.
UK like-for-like sales were flat in the second quarter, compared to a 2.8% drop in the first quarter.
Bolland sounded an upbeat note going into the key Christmas trading period: "As we approach the all important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home."
26 WEEKS ENDED 29 SEPTEMBER 2012
Half-year results:
- Group sales up 0.9% at £4.7bn
- Underlying profit before tax3 £297m (last year pro-forma4 £307m; reported £315m)
- Underlying basic earnings per share3 14.6p (last year 15.6p)
- Interim dividend 6.2p per share (last year 6.2p)
- Net debt £2.6bn (last year pro-forma4 £2.6bn; reported £2.0bn)
Statutory results:
- Profit before tax £290m (last year £321m)
- Basic earnings per share 14.2p (last year 16.0p)
Marc Bolland, Chief Executive, said:
"We are pleased to report a better performance across the business in the second quarter. We took steps to address the short term merchandising issues in General Merchandise and as a result, we delivered an improved performance. Food outperformed the market on a like-for-like basis.
"Eighteen months in, we are making strong progress with our plan to transform M&S into an International Multi-channel retailer. Our new International stores are performing well, and our Multi-channel business is delivering strong growth.
"As we approach the all important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home."
Original source: Marks and Spencer
Sectors: Financials, Retail
Companies: Marks and Spencer
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