M&S CFO Helen Weir to resign after H1 profit falls 5.3 percent

For the 26 weeks to September 30, 2017, Marks and Spencer Group (M&S) revenues totaled 5,125.6 million pounds (6,742 million dollars) against 4.993.5 million pounds (6,568 million dollars) last year, representing an increase of 2.6 percent. Profit before tax and adjusted items declined by 5.3 percent to 219.1 million pounds (288 million dollars) over the same period last year. In a separate release, M&S also announced that the company has begun search for a new CFO to succeed current chief finance officer Helen Weir.

Commenting on the company’s performance, Steve Rowe, M&S Chief Executive said in a statement: “We have made good progress in remedying the immediate and burning issues at M&S outlined last year. In clothing & home early results are encouraging and in international we now have a profitable and robust business. The business still has many structural issues to tackle as we embark on the next five years of our transformation, in the context of a very challenging retail and consumer environment. Today we are accelerating our plans to build a business with sustainable, profitable growth, making M&S special again.”

Highlights of M&S’s H1 results

Profit before tax jumped 371.3 percent to 118.3 million pounds (155 million dollars) compared to 25.1 million pounds (33 million dollars) last year, while profit after tax of 84.6 million pounds (111 million dollars) rose 432.1 percent against 15.9 million pounds (20.9 million dollars) in the first six months of 2016.Adjusted basic earnings per share of 10.7 p were down 7 percent, while basic earnings per share rose 420 percent from 1p to 5.2 p in the first half period.

UK clothing & home revenue, M&S said, was level, with like-for-like revenue down 0.7 percent. Revenue grew in quarter two, benefiting from an encouraging performance of new autumn range in September supported by cooler weather. The company added that revenues were adversely impacted by decision to reduce the number of clearance sales in the period from 4 to 2. Full price sales increased by 5.3 percent. Gross margin was up 140bps at 58.1 percent.

During the second quarter, M&S reallocated space in 56 stores from womenswear to areas of growth opportunity such as childrenswear and home. The company opened two new stores and relocated a further two and closed four clothing & home stores as part of the reshaping of the UK store estate. At M&S.com, revenue increased by 5.7 percent at constant currency.

Reported international revenue increased by 2.3 percent, benefitting from currency translation. At constant currency, the company added, revenue declined by 3.1 percent, as a result of the now completed exit from loss making owned stores. Franchise revenue increased 9.9 percent at constant currency. Company-owned retained markets revenue increased 0.6 percent at constant currency. M&S said, strong performances in India and Hong Kong were offset by a decline in sales in the Republic of Ireland.

M&S announces interim dividend

We have announced an interim dividend of 6.8p, level year-on-year to be paid on January 12, 2018 to shareholders on the register of members as at close of business on November 17, 2017.

M&S further said that given stronger than anticipated buying margin in the first half it now expects to deliver growth in clothing & home gross margin of between 25 and 75 basis points.

Picture:M&S website