Marks and Spencer (MKS) will not pay a final dividend this year, in a move that will save the retailer around £130m as it prepares for store closures and a collapse in its clothing and home earnings. Other measures include reducing the group’s planned capital expenditure from a budget of up to £400m to around £80m.
While M&S reported strong trading in its food business and expects this to continue, it said that its bias to chilled and fresh food meant that it had not experienced the stockpiling surge witnessed in the aisles of the major grocers. But clothing and home margins are vulnerable both to slack demand along with a likely surplus of unsold seasonal stock and clearance activity, a poor position from which to enter the summer trading period. Its international business will also experience a heavy sales fall.
