Improved full year results
Group sales up 0.4%1 to £10.3bn
Underlying profit before tax2 up 6.1% to £661.2m
Statutory profit before tax up 3.4% to £600.0m
Food business outperforms in a very competitive market
Specialist positioning differentiates us from the competition
62 new Simply Food stores opened, with performance ahead of expectations
Gross margin up 30bps
General Merchandise gross margin up strongly
Gross margin up 190bps
Significant sourcing gains and slightly lower discounting
General Merchandise sales performance challenging
Full year performance did not meet expectations, positive LFL growth in the final quarter
Continued improvement in product quality and style
M&S.com sales back in growth in the final quarter, following disruption earlier in the year
International business impacted by macro-economic issues
Operating profit down 24.8% to £92m
Tight control of costs and capex
Operating costs up 1.5%
Capex down £183m to £526.6m
Strong cash generation
EBITDA £1,312.6m, up £92.9m
Free cash flow before dividend £524.2m, up £96.3m
Final dividend up 7.4% to 11.6p; full year dividend up 5.9% to 18p
Share buyback programme of £150m announced for 2015/16
Marc Bolland, Chief Executive, said:
"We made good progress in three of our four key priorities for the year. In Food, we had an outstanding year in a difficult market. In GM, we significantly increased the gross margin, and, while sales performance was below our expectations, we returned to growth in the fourth quarter. We continued to control costs and capital expenditure tightly, resulting in significantly improved free cash flow.
"We are transforming M&S into a stronger, more agile business - putting the right infrastructure, capabilities and talent in place to drive our strategic priorities."
Robert Swannell, Chairman, said:
"We are a more capable business following a sustained period of investment in our infrastructure and in our people. Our focus continues to be on delivery of the strategy and improvement in shareholder returns.
"In line with our policy, the Board is recommending a final dividend of 11.6p per share, resulting in a full year dividend of 18p, 5.9% up on last year. In the context of continuing increased free cash flow in the business we are also pleased to announce the start of an ongoing programme of enhanced returns for shareholders with a share buyback programme of £150 million in the current year."
