City File: Top Marks

TWO OF the market's oldest truisms will be tested to the full next week: that no one ever lost money on Marks & Sparks and always to buy on lousy results. M&S's interim profits due next Wednesday are likely to show a small drop on last year's pounds 215m pre-tax, themselves pounds 15m down on the 1990 figure. But M&S has been such a reliable defensive stock over the past couple of years that investors may underrate its appeal during the coming recovery, especially as it remains well over 20 times earnings.

Nevertheless, sensible investors will buy on the slightest sign of weakness. Last year, incoming chairman Sir Rick Greenbury bit the bullet, finally solved the long-standing Canadian problems and declared some unprecedented redundancies.

The sophisticated M&S supply system can take full advantage of any increase in retail sales: moreover the smaller items that are M&S's staples - clothing and luxury foods - will be the first to pick up. Now that North America is no longer absorbing spare cash and Europe and the Far East are going great guns, the only surprises in 1993/94 should be happy ones.