M&S reveals surprise profits boost

Marks & Spencer boss Sir Stuart Rose drew encouragement from recent trading today after the chain posted an unexpected rise in half-year profits.

Sir Stuart announced profits of £298.3 million for the six months to September 26, ahead of City forecasts and slightly stronger than a year earlier.

He added that the third quarter of the financial year had got off to a good start, although he warned that trading conditions remained competitive.



Marks has also revealed plans to sell around 400 branded products from firms such as Kellogg's, Coca-Cola and Marmite across its UK store network.

The chain is rolling out the sale of branded household goods and groceries after a successful trial in stores in the North East and South East of England.

M&S said it could "simply never compete" with certain popular brands and was introducing them to its shops for the convenience of customers.

No M&S products are to be dropped as a result of the move, which will focus on lines where the retailer would have a lower share of the market such as soft drinks, beer, laundry and confectionery.



Today's figures reveal that M&S increased sales by 2.8 per cent to £4.3 billion in the half-year period, helped by 12 per cent growth overseas. UK revenues were 1.8 per cent higher, but down 0.9 per cent when changes in store space are excluded.

Sir Stuart, who is executive chairman, said: "We are pleased with our half-year performance. We increased our share of the clothing market over the period, and our performance in food has also improved."

The company said tight management of costs and operating margins also enabled it to beat last year's profits figure.

The result represents a recovery from earlier in the year, when Marks announced a 40 per cent drop in full-year profits to £604.4 million and cut its annual dividend by 33 per cent - the first such move since 2000.



Marks said general merchandise sales were up 1.7 per cent as it maintained its position as the UK's leading clothing retailer by value and volume.

The retailer said it launched the Portfolio and Indigo ranges in womenswear and also grew market share in the 35 and under age range segment.

In food, sales were up 1.8 per cent as Marks delivered its fourth consecutive quarter of improved like-for-likes sales, although market share slipped from 3.7 per cent to 3.5 per cent.

Promotional offers have been key to driving footfall in its stores, with the retailer's "Dine in for two for £10" offer selling 4.5 million meals in the half.

Shares opened 5 per cent higher after the profits figure beat the City's consensus forecast for a figure of £285 million.

Sir Stuart sounded a note of caution despite today's boost, saying: "We have had a good start to the third quarter. However, the market remains competitive and, as we came up against volatile trading conditions last year, we remain cautious about the outlook for Christmas and the year ahead."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Administrator

£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...

Recruitment Genius: Payments Advisor

£15000 - £20000 per annum: Recruitment Genius: An experienced Repayments Advis...

Recruitment Genius: Investment Analyst

£25000 - £30000 per annum: Recruitment Genius: This leading provider of financ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you looking to take your ...

Day In a Page

Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests