Marks & Spencer Group Plc (LON:MKS), today announced their half year results for 26 weeks ended 29 September 2018.
|
26 weeks ended |
29 Sep 18 |
30 Sep 17 |
Change % |
|
|
Group revenue |
£4,966.9m |
£5,125.6m |
-3.1 |
|
|
Profit before tax & adjusting items1 |
£223.5m |
£219.1m |
2.0 |
|
|
Free cash flow before adjusting items2 |
£300.4m |
£218.4m |
37.5 |
|
|
Adjusting items1, 2 |
£(96.8)m |
£(100.8)m |
4.0 |
|
|
Profit before tax |
£126.7m |
£118.3m |
7.1 |
|
|
Profit after tax |
£89.8m |
£84.6m |
6.1 |
|
|
Basic adjusted earnings per share1 |
10.6p |
10.7p |
-0.9 |
|
|
Basic earnings per share |
5.4p |
5.2p |
3.8 |
|
|
Net debt |
£1.78bn |
£2.03bn |
-12.3 |
|
|
Ordinary dividend per share |
6.8p |
6.8p |
– |
|
1Adjusted results are consistent with how business performance is measured internally. 2Refer to adjusting items table below for further details. See glossary for definitions and reconciliations to statutory measures.
Strategic progress
· New management structure and significant change in organisation and direction under substantially new leadership team
· Reshaping buy and focusing on hero lines in Clothing & Home
· Initial steps to restore value and broaden family appeal in Food
· Closure programme of over 100 full-line stores generating encouraging transfer rates; significant further change required
· Initial steps to drive digital catch up and change in culture; 20.4% of UK C&H sales now online
· Process in place to reengineer end to end supply chain, removing costs, complexity and working capital
· At least £350m of cost savings targeted, to underpin delivery
Steve Rowe, Chief Executive of Marks & Spencers commented:
“In May I set out in our “Facing the Facts” presentation, the challenges we face and the steps we are taking in this the first phase of our transformation programme. Against the background of profound structural change in our industry, we are leaving no stone unturned and reshaping our business, its organisation and culture.
“This phase is about rebuilding the foundations of the future M&S and we are judging progress as much by the pace of change as the trading outcomes. Already, we have reorganised into a family of strong businesses in the biggest change to our structure for decades. We now have a largely new, very determined and energetic management team in place. M&S is becoming a faster, more commercial and more digital business.
“We are on track to restructure our store portfolio with over 100 full-line closures and expect to see newly remodelled stores open next year. We are fixing the basics of our online channel and there are very early signs of improvement. Every aspect of our ranges, how we trade, our supply chain and marketing is undergoing scrutiny and change.”
Financial headlines
· Profit before tax & adjusting items up 2.0% as a result of the phasing of costs with full year cost guidance unchanged
· Adjusting items of £96.8m, including £47.6m for UK store closure programme
· Clothing & Home revenue down 2.7% impacted by store closures, with like-for-like sales down 1.1%. Online Clothing sales growth ahead of market. Gross margin down 20bps as a result of sale timing
· Food revenue down 0.2% with like-for-like revenue down 2.9% reflecting tough trading and our actions to restore trusted value, including fewer promotions and price investment, and Easter timing. Gross margin down 25bps as a result
· Net debt reduced to £1.78bn as a result of tight capital expenditure control and slightly lower working capital year-on-year
RESTORING THE BASICS
In May we set out the nine key pillars of our first phase ‘restoring the basics’ transformation agenda and we will report on the performance against each of these as we progress. Our objective is to create a profitable, growing family of businesses within three to five years, bound together not only by shared sites but by a common consumer brand, employment values, technology and customer data.
