M&S `not satisfied' wth 6% profit rise

Troubled retailer Marks & Spencer showed the result of a difficult year today despite reporting annual profits slightly ahead of expectations.

Although underlying pre-tax profits were 6% higher at £805m (€1.2bn), the retailer said it was clearly “not satisfied” with its sales progress.

Like-for-like sales fell 0.4% in the 53 weeks to April 3 after an initial surge in the recovery of the clothing and food business faltered.

M&S has boosted its profits through cost-cutting, and said today it would make the business more efficient through measures such as reducing head office costs.

Outgoing chairman Luc Vandevelde described the performance as solid but added: “Clearly we are not satisfied with our sales progress.”

The food department – seen as the backbone of the group’s previous success - recorded a 1.6% increase in same-store sales during the year.

In general merchandise, which includes the clothing department, like-for-like sales were down 1.8% over the 12-month period.

The retailer’s share of the clothing market declined by 0.2%, reflecting the under-performance in womenswear, particularly knitwear and childrenswear.

Total clothing sales were down 0.5% on last year, with womenswear in particular performing below expectations despite the success of its per una range.