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M&S profits rise for the first time in four years, up 6.1%

Published:  20 May, 2015

Marks & Spencer appears to be on the road to recovery after reporting underlying profits before tax up 6.1% to £661.2m for the full year.

It announced today that underlying operating profit for the UK is up 8.2% climbing from £619.2m in 2014 to £670.2m for 2015 in the twelve months to 28 March 2015.

Chief executive Marc Bolland believes the investments that the company has made are now paying off. He said:  "We are transforming M&S into a stronger, more agile business putting the right infrastructure, capabilities and talent in place to drive our strategic priorities." 

The grocery side of the business has done well for the company according to Bolland, proud of the "outstanding year" despite it being a "difficult market".

Ken Odeluga, a senior market analyst at said The retailer beat market expectations. He said: "As was already becoming clear, Marks & Spencer has closed the books on 2014 with a signal increase in market share by default (at the expense of its Big 3 rivals of course) and has ensured 2014 culminated in its first profit rise for four years. Most of the out-turns in the report are as expected, though M&S reporting a 30 basis point advancement in food gross margin I think is better than the market was factoring in."

The company announced it would be investing £150m in a stock buyback effort, the first since 2007, which is good news for shareholders.  

Underlying profit was down 24.8% foreign exchange impacted international according to the company. "M&S's caution on its international business is the subject of quite a bit of discussion in the City this morning. My preference is to take the retailer at its word with respect to the short-term euro and Mid-East impact it expects (note the UK largely offsets the c.£20m FY impact in any case, even if the €/ME pressures are on-going). On the other hand, there's not a great deal, for now, for the market to go on in terms of rationale for possible forecast upgrades. That helps explain the modest rise of the stock this morning," said Odeluga.