MARKS AND SPENCER GROUP PLC HALF YEAR RESULTS FOR 26 WEEKS ENDED 1 OCTOBER 2016 AND STRATEGIC UPDATE
26 weeks to 1 Oct 16 | 26 weeks to 26 Sep 15 | Change on LY % | |
Group revenue | £4,993.5m | £4,951.3m | 0.9 |
Underlying profit before tax 1 | £231.3m | £284.0m | -18.6 |
Non-underlying items2 | £(206.2)m | £(68.0)m | -203.2 |
Statutory profit before tax | £25.1m | £216.0m | -88.4 |
Underlying basic earnings per share 1 | 11.5p | 14.1p | -18.4 |
Basic earnings per share | 1.0p | 10.5p | -90.5 |
Free cash flow pre shareholder returns | £173.9m | £256.5m | -32.2 |
Net debt | £2.24bn | £2.20bn | 2.0 |
Dividend per share | 6.8p | 6.8p | - |
- Good progress against strategic priorities set out in May.
- As expected, underlying profits down in the half due to lower Clothing & Home sales. Non-underlying items include significant charge relating to pension changes.
- Proposal to focus International business on a franchise model, exiting our loss-making owned business across ten markets, at a non-underlying cost of £150m-£200m over the coming 12 month period, thereby eliminating annual losses of £45m.
- Five-year plan to improve productivity of UK Store Estate by repositioning c.25% of Clothing & Home space with costs of c. £50m per annum for the first three years and continued rollout of our Simply Food stores. Total number of M&S stores will increase.
- Interim dividend maintained.
- Decision not to make an additional return of cash to shareholders in the second half given costs of strategic change and uncertain market conditions.
Steve Rowe, M&S CEO, said: “In May, we laid out a number of questions which we would answer as part of our strategic review. We committed to creating a simpler business with customers at its heart, and taking action to start to recover our Clothing & Home business and continue to grow in Food.
“Our aim is to build a sustainable business which will delight our customers, provide a robust foundation for future growth and deliver value for our shareholders in the long term. We have made good progress on our plans and customers are already noticing a difference, particularly in Clothing & Home.