M&S reveals 62% annual profit slump to £66.8m

Marks and Spencer (M&S) has revealed steep falls in annual sales and profits, hours after accelerating its store closure programme.

The chain reported pre-tax profit in the year to 31 March came in 62% down on the previous year at £66.8m.

While its bottom line was hit by £321.1m in costs related to its latest turnaround efforts, as reported by Sky News , trading profits were 5% lower.

M&S said that reflected weaker food margins and like-for-like sales falling 0.9% in its core UK market.

The fourth quarter's performance showed a deterioration, largely blamed on "unseasonable weather" despite an earlier Easter.

While the results coincide with a period of tough trading for the wider high street in a slowing economy, the core trading performance will disappoint long-suffering investors nevertheless.

Analysts have warned the company - once the darling of UK retail - risks being relegated from the FTSE 100, to be replaced by food rival Ocado as its market value continues to slide.

It currently stands at £4.74bn versus the online specialist's £6bn.

M&S has launched a series of turnaround plans since the financial crisis - with clothing and home consistently dragging.

The company was particularly slow to get its online operations into gear but it said sales were growing digitally despite a "slow" website.

Chief (Taiwan OTC: 3345.TWO - news) executive Steve Rowe, who took over in 2016, promised shareholders its transformation plan would restore the basis under new leadership teams in its core food and clothing and home divisions.

He said: "At our half-year results in November I outlined the need for accelerated change at M&S.

"The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business.

"These changes come with short term costs which are reflected in today's results.

"There are a number of structural issues to address and we are taking steps towards fixing these.

"The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business.

"This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years."

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