British retailer M&S profit plunges

23 May 2012 (Last Updated May 23rd, 2012 02:00)

British clothing retailer Marks & Spencer (M&S) has posted a 15.7% decline in its full year pre-tax profit.

British clothing retailer Marks & Spencer (M&S) has posted a 15.7% decline in its full year pre-tax profit.

The retailer's profit before tax for 2011-12 fell to £658m compared £780.6m in the previous fiscal.

Underlying group operating profit was £810m in 2011-12 as against £824.9m during 2010-2011, mainly owing to the 9% drop in international operating profit at £133.4m over £147m, while UK operating profit was marginally lower at £676.6m compared to £677.9m.

However, the retailer performed well in the group sales, which were up 2% at £9.93bn in 2012 over £9.74bn in 2011, driven by multi-channel, international, and food sales, which were up 18%, 5.8% and 3.9% respectively during the current fiscal.

Chief executive Marc Bolland said the group performed well in a challenging economic environment, growing group sales by 2% and holding market share.

"We managed the business prudently with tight control of costs and capital investment, delivering earnings in line with last year, and substantial efficiency savings in our capital investment plans," Bolland said.

The company said that the multi-channel sales at £559m have grown ahead of the market estimations of British Retail Consortium (BRC).

Overall like-for-like revenue in the UK managed to grow marginally by 0.3%, with the help of surge in food sales by 2.1%, though the general merchandise sales declined by 1.8%.

M&S has launched the second phase for its new format pilot stores, including new departments for beauty, footwear and home schemes; as part of the first phase, it opened 92 pilot stores.

Chairman Robert Swannell said, "We have a clear strategy for the business. We remain focused on delivering this strategy effectively and efficiently."