Marks & Spencer reports 35 percent increase in FY underlying pre-tax profits

Marks & Spencer reports 35 percent increase in FY underlying pre-tax profits

	Published : Tue, 23 May 2006 10:45 By : Phil Bateman Print this Story

LONDON - Marks & Spencer continued its remarkable recovery as it reported a 35.1 percent increase in full-year underlying profit before tax. Pre-tax profits for the year ending April 1 to £751.4 million ($1.41 billion) from £556.1 million reported at the same time last year.

But M&S chief executive Stuart Rose said that there was still much work to do in order to secure the future of the group. Food sales at the retailer increased considerably with revenues up by 7 percent. M&S has been focusing on food and womenswear in an effort to lure customers. Additionally an advertising campaign featuring Twiggy has also helped revamp its image.

"What they wanted from us was better values, whether it was from knickers right the way through to knitwear or indeed sausages or sandwiches, they want us to deliver fantastic products and fantastic value, and value for us is a function of price time quality," Mr Rose observed. He was however unwilling to commit if M&S had turned the corner. "We need to drive sales, grow market share, improve the performance from our existing stores and continue to buy better," Mr Rose said.

The success of the group under Rose is underlined by the fact that M&S has been able to get 15 million customers as week as opposed to 350,000 a week in the troubled times, "We are now starting to convert more of these visits to transactions. This will be a key area for improvement in the year ahead," Rose said.

Like-for-like sales in the company were up by 6.8 percent in the fourth quarter of the year. This is way above expectations, but analysts feel the tough trading environment is bound to catch up. "This is a genuine recovery. There has been a fundamental change in the way the company does business as well as an improvement in the store environment and the product," said John Stevenson, of Shore Capital Stockbrokers.

Mr Rose though said that they were still not out of the woods "We are under no illusions about the work necessary to place us firmly on a path to long term growth and are committed to delivering this," he added.