M&S on a roll |
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| Wednesday, 23 May 2007 | |
 Marks & Spencer appears to have made a full recovery as annual pre-tax profits approached the £1 billion mark for the first time in eight years. Underlying pre-tax profit soared 28 percent to £965.2 million on sales up 10 percent to £8.6 billion. Operational profits jumped 22 percent
to £1.04 billion. The results signify a windfall for M&S employees. Chief executive Stuart Rose, who confirmed will remain with the company until at least 2009, will be earning two and a half times his salary, or approximately £2.5 million and he said that nearly 70.000 staff would share in a £91 million bonus. He added that several hundred managers could stand to earn a bonus equal to one year's salary. Rose outlined plans for international expansion and further growth. He said he planned to bring the retailer back to "old Europe" - France, Belgium, Germany and Spain - and would grow the business in India and China. He also said the company will be expanding its portfolio of wholly-owned stores. The main focus will still be on the "core" UK business, "because that's where we got in trouble before." Furthermore, thanks to the company's strong performance, it will be creating 10,000 new jobs over the next three years. "Market share has improved in all clothing categories and food," Rose said in a statement, adding, "We continue to invest in modernising our stores and 70 percent of our store portfolio will be modernised by the end of the year." The company said modernised store continued to outperform. Rose also plans to grow its internet business - from current sales of about £85 million to £500 million by 2010 - and, to this end, has appointed Martha Lane Fox as non-executive director. Lane Fox shot to fame in the nineties as co-founder of the highly successful internet business Lastminute.com. Rose said her advice would be invaluable in growing that side of the business. In current trading, Rose said the company had enjoyed a good start to the year but warned that the retail environment would become "more challenging". "Competition remains intense and pressure on consumer spending as a result of interest rate rises will also increase," he said. Panmure Gordon analyst Philip Dorgan was concerned by a slowdown in sales in the fourth quarter and maintained that M&S would have to work hard to maintain robust results. |
