Marks & Spencer says no read-across from pensions deal to s/holder returns |
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Tue, 23 Jan 2007 14:00
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LONDON (AFX) - Stuart Rose, chief executive of Marks & Spencer Group PLC, has played down the suggestion that the retailer's plan to plug its pension deficit without requiring a major cash injection could mean enhanced returns for shareholders.'I wouldn't speculate .... The company's got to manage its balance sheet as it thinks fit, but there's no Plan B behind this,' he told reporters.Earlier, M&S announced it had agreed the terms of a plan to fund the 704 mln stg deficit in its UK defined benefit pension scheme with the scheme's trustees.The group will not contribute cash into the scheme but instead will inject property assets into a partnership with the scheme on which it will pay rent. Some 500 mln stg of value will go to the fund with the remainder of the deficit expected to be met by investment returns.M&S expects the profit and loss implications of the deal to be minimal.The stock market welcomed the outcome, sending M&S shares 6 pence higher to 676 pence by 12.17 pm.Analysts at Bridgewell Securities reckon the market will now focus on what M&S does about a have ry conservative' capital structure by sector standards.'We believe enhanced shareholder returns are a reasonable expectation particularly beyond the current investment phase,' they told clients.james.davey@thomson.comjdd/ambCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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