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 %|
|Underlying profit before tax 1||£231.3m||£284.0m||-18.6|
|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|
|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.