FTSE buoyed by M&S success

Marks & Spencer shares hit a new record today as investors celebrated a sparkling set of half-year figures from the resurgent retailer.

Shares topped £7 for a spell before settling at 698p – a gain of 6% or 41.5p - as the City cheered a 32% rise in first half profits to £405.1 million.

M&S offset disappointment in figures from Associated British Foods, Scottish & Newcastle and Yell as the FTSE 100 Index moved 7.6 points higher to 6232.1 by mid-morning.

The gain for M&S came as investors dared to believe full-year profits could top £1bn amid a raft of upgrades by brokers. Shareholders were also buoyed by a 31% rise in the interim dividend.

M&S was followed up the Footsie leaderboard by oil firm BP as the price of crude held steady at around 60 US dollars a barrel in New York. BP shares lifted 5.5p to 602.5p.

However, AB Foods fared less well with a fall of 3% or 22.5p to 828.5p after it posted declining profits amid difficult trading conditions at British Sugar and Kingsmill.

And shares in Yellow Pages owner Yell Group fell 7% – down 46p to 579p – after its profits for the first half of the year came in below expectations.

Yell said underlying earnings rose 15.6% to £269.2 million in the six months to September 30 – short of the £300 million forecast in the City.

The company blamed seasonal issues relating to the recent acquisition of Spain’s TPI and added it remained on track to meet full-year targets.

Scottish & Newcastle also fell 3%, despite seeing leading brands such as Strongbow outperform the rest of the UK market in the third quarter.

Shares were hit – down 19.5p at 549p – as the company warned that 2007 would continue to be tough for the industry.