There has been a great deal of hype surrounding Marks and Spencer's (MKS) Autumn/Winter range, but because it was only in stores at the tail end of the half year, it's hard to measure its success just yet - although management claims the garments have shown "early signs of sales improvement".
Comparable sales of general merchandise did improve over the latest six-month trading period, from a 1.6 per cent decline in the first quarter to a 1.3 per cent fall in the second, suggesting the new collection proved popular. Chief executive Marc Bolland blamed the weather at the beginning and end of the half year for weak sales, which he said increased promotional activity and heightened stock clearance.
Comparable food sales, however, continued to grow, rising 2.5 per cent in the first half, while online sales were also robust. This helped to push UK revenue up by 3 per cent and squeezed out a 0.7 per cent rise in same-store sales.
However, higher costs and margin pressure left the underlying operating profit in the UK down 10 per cent, while overseas, profits also slumped as higher costs offset decent sales growth. This resulted in a 9 per cent fall in group underlying pre-tax profit to £262m, around £11m below consensus forecasts.
Investec expects full-year pre-tax profit of £660m and EPS of 32.7p, down from £665m and 35.2p in fiscal 2013.
| MARKS & SPENCER (MKS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 502p | MARKET VALUE: | £8.1bn | |
| TOUCH: | 501-502p | 12-MONTH HIGH: | 521p | LOW: 352p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 153p* | NET DEBT: | 114% | |
| Half-year to 28 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 4.70 | 280 | 13.8 | 6.2 |
| 2013 | 4.89 | 280 | 15.5 | 6.2 |
| % change | +4 | - | +12 | - |
Ex-div: 13 Nov Payment: 10 Jan *Includes intangible assets of £741m, or 46p a share | ||||
