M&S reports solid trade in Ireland

MARKS and Spencer has seen a solid improvement in trading at its Irish stores since the last budget, an indication, it said, that consumers want more confidence about where they stand financially.

The supermarket said that despite the improvement in trading conditions, Ireland and Greece were “heavily impacted by the economic downturn”.

According to its final year results, international sales grew 5.7%, accounting for 10.2% of total group revenues. Operating profits were up 16.5% to £135.3m (€158m). M&S opened 34 new stores in the year to the end of March and now has 327 stores in 41 territories.

“While Greece and Ireland have both been heavily impacted by the economic downturn, we continued to make sure our pricing is competitive and stock controlled tightly to provide flexibility as markets recover,” it said.

It said owned international store operating profits were £57.7m, up 26%, reflecting growth in Ireland and Hong Kong, offset by small losses in China, India and Greece. On a group level, M&S reported earnings that beat analysts’ estimates on improved sales of fashions and ready meals and said it had a satisfactory start to the first quarter.

Pretax profit, excluding property disposals, rose 4.6% to £632.5m.

Budget-priced “wise buy” food offers and celebrity- backed advertising campaigns featuring former model Twiggy and X-Factor judge Dannii Minogue have helped sales improve.

The retailer, whose new chief executive Marc Bolland started this month, said it is cautious on the outlook for the year ahead, citing consumer concern about the impact of the British budget that’s due to be announced on June 22.

“Although current ranges are winning back customers, new chief executive Bolland will be under pressure to improve investor sentiment,” Singer Capital Markets analyst Mark Photiades said.

The former head of William Morrison Supermarkets is undertaking three months of “induction” while executive chairman Stuart Rose runs the business. Mr Bolland said the chief executive will take over from Mr Rose after that.