High street retail giant Marks & Spencer has seen its profits rise for the first time in four years, beating analysts forecasts.
The company’s underlying profits before tax rose 6.1% to £661.2m for the year to 28 March, on the back of an “outstanding” year for its food business and improving sales for its womenswear department in the final quarter.
While the headline figures show signs of growth, M&S struggles to grow its womenswear department, which remains vital to the business. A warmer than normal autumn hit sales of knitwear and coats, and online problems over Christmas both had a negative impact on sales figures.
M&S’ capital expenditure on modernising its shops and redevelopment of its ecommerce site declined to £526m last year, compared to £700 for the year before. However, its transformation online and off has been expensive for the company, with high street competitor Next spending just £700m over the last five years, compared to M&S’ £3bn, to make similar changes.
In its annual report, M&S indicated its confidence in future growth by launching a £150m share buyback programme and announcing that it would raise its share dividend by 5.9%.
