UK retailer Marks & Spencer has posted a 63.5% decline in profit before tax for full year 2016/17, according to the retailer’s latest annual results.
Profit before tax for the 52-week period was £176.4 million, down from £488.8 million a year earlier, which the retailer attributed to ‘significant adjusted items’ during the period. Profit before tax excluding adjusted items was down 10.3%.
However, the retailer did post a marginal increase in group revenue, which rose 2.2% to £10.62 billion.
Food Performance
Food revenue was up 4.2%, driven by new stores, however gross margin was down by 25 basis points due to ‘input cost inflation and higher than anticipated waste’. Clothing & Home saw sales growth of 2.7%.
Internationally, the decision by M&S to exit ten ‘loss-making markets’ has boosted its profit before adjusted items by 15.4% to £64.4 million.
Strong Platform
Commenting on its performance, Steve Rowe, chief executive said, “Last year we outlined a comprehensive plan to build strong foundations for the future. We said we would recover and grow clothing and home, continue with our plans for Food growth, remove costs and simplify the business.
"We achieved a huge amount in the year and whilst there is still much to do, I am pleased with our progress and we remain on track.”
The strategic review that M&S implemented a year ago has helped simplify and strengthen the company’s Clothing offering, it said, as well as boosted its range in Food.
However, as Rowe continued, “the planned restructuring of M&S has come with a cost and has impacted profits, but the business is still strongly cash generative and we reduced our net debt.
“Looking ahead, we will continue our programme of self-help in a tough trading environment. We remain committed to delivering for our customers and shareholders as we build sustainable foundations for the future.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
