Profits leap as M&S 'turns corner'

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The Independent Online

The retail group Marks & Spencer today said it believed it had "turned the corner" as it reported a 31 per cent jump in profits for the last year.

The retail group Marks & Spencer today said it believed it had "turned the corner" as it reported a 31 per cent jump in profits for the last year.

The group, which is recovering from years of falling sales and profits, said turnover grew 3.8 per cent to £7.6 billion for the year to March 30, while profits, when stripping out one-off charges, rose 30.7 per cent to £646.7 million.

The profit increase came in above consensus market forecasts of £630 million.

But chairman and chief executive Luc Vandevelde said the group was not complacent and there was much left to do.

"We have made good progress and believe that we have turned the corner. However I recognise our performance was helped by the buoyant High Street trading conditions and now our task is to secure the recovery and to build for our future.

"There is much to do and we are not complacent. Phase one may be complete, but the plan moves on as we set about growing the business and regaining our pre-eminent position in the UK market."

The group also today said it was planning to open 20 small food stores this year, trial run two large stand-alone home stores in 2003/4 and pilot a combined credit and loyalty card this autumn in Wales and the north east of England.

The new store opening plans would create around 1,000 jobs.

M&S said the year had seen a "significant turnaround" in the performance of its UK shops. Sales were boosted by its Perfect Basics collection, the Per Una range for women and its more traditional Classic ranges, while its Blue Harbour collection of casualwear for men had seen an initial "encouraging" response.

M&S said the availability, quality and fit of clothing had improved and it had made market share gains following the launch of its spring ranges.

However it said although the UK clothing market remained strong it was "unlikely that current consumer spending levels will be maintained".

During the year, M&S said its food business had also performed well, and had maintained market share.

However, profits in its financial services division were down on last year as the competitive market for personal loans saw its personal loan advances fall.

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