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| M&S cuts dividend as profits fall | M&S cuts dividend as profits fall |
| (20 minutes later) | |
| UK retailer Marks and Spencer has cut its dividend by a third after reporting a fall in annual profits. | UK retailer Marks and Spencer has cut its dividend by a third after reporting a fall in annual profits. |
| M&S cut its dividend to 15p a share for the year to 28 March, down from 22p in the previous year. The cut was larger than most analysts had predicted. | M&S cut its dividend to 15p a share for the year to 28 March, down from 22p in the previous year. The cut was larger than most analysts had predicted. |
| Annual pre-tax profits fell to £706m ($1.1bn) from £1.1bn the year before. Total sales rose 0.4% to £9.1bn. | Annual pre-tax profits fell to £706m ($1.1bn) from £1.1bn the year before. Total sales rose 0.4% to £9.1bn. |
| In January, M&S announced 1,200 job cuts and plans to close 27 stores in a move to restructure its business. | In January, M&S announced 1,200 job cuts and plans to close 27 stores in a move to restructure its business. |
| The retailer described its dividend cut as a "tough but necessary" decision. Analysts had expected it to be cut to 17p per share. | The retailer described its dividend cut as a "tough but necessary" decision. Analysts had expected it to be cut to 17p per share. |
| "We wanted to make sure we've given our customers the best value, so we've taken the hit on the margins, if you like," M&S chairman Sir Stuart Rose told the BBC. | "We wanted to make sure we've given our customers the best value, so we've taken the hit on the margins, if you like," M&S chairman Sir Stuart Rose told the BBC. |
| 'Cautious' outlook | 'Cautious' outlook |
| Shares in the retailer fell as much as 5.7%, to 320p in early trading, the biggest drop since early January. | |
| Sir Stuart said in the statement that trading for the first seven weeks of the fiscal year had been "broadly in line" with the final three months of last year. | Sir Stuart said in the statement that trading for the first seven weeks of the fiscal year had been "broadly in line" with the final three months of last year. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| The chain said in March that like-for-like sales in the UK, which strip out the impact of store openings and closures, were down 4.2% for the 13 weeks to 28 March. | The chain said in March that like-for-like sales in the UK, which strip out the impact of store openings and closures, were down 4.2% for the 13 weeks to 28 March. |
| "We remain cautious about the outlook for the remainder of the year," Sir Stuart said. | "We remain cautious about the outlook for the remainder of the year," Sir Stuart said. |
| Like-for-like UK sales fell 5.9% over the year, with general merchandise - which includes clothes - down 6.9% and food sales 5% lower. | Like-for-like UK sales fell 5.9% over the year, with general merchandise - which includes clothes - down 6.9% and food sales 5% lower. |
| "The continuing retrenchment of the consumer towards cheaper products and the increasing agility of the competition are playing away from M&S," said Richard Hunter, Head of UK equities at Hargreaves Lansdown. | |
| After announcing plans to close 25 of its Simply Food stores in January, M&S said it had managed to halt the rate of decline of its market share in UK supermarket food and drink sales, which fell to 3.9% from 4.3% during the year. | After announcing plans to close 25 of its Simply Food stores in January, M&S said it had managed to halt the rate of decline of its market share in UK supermarket food and drink sales, which fell to 3.9% from 4.3% during the year. |
| "Whilst our profit was down on the previous year, we took decisive action to respond to the changing needs of our customers and to mitigate the impact of the economic downturn," the company said. | "Whilst our profit was down on the previous year, we took decisive action to respond to the changing needs of our customers and to mitigate the impact of the economic downturn," the company said. |
| International aspirations | International aspirations |
| M&S's profits, adjusted for the personnel restructuring charges and store closures, fell to £604m from £1.01bn, just slightly under analysts' expectations. | M&S's profits, adjusted for the personnel restructuring charges and store closures, fell to £604m from £1.01bn, just slightly under analysts' expectations. |
| Total sales fell 1.7% in the UK, but rose 26% in its stores internationally, including China and Eastern Europe. | Total sales fell 1.7% in the UK, but rose 26% in its stores internationally, including China and Eastern Europe. |
| M&S opened 33 new stores outside the UK, taking its total to 296. The company is planning to open 50 new stores across Europe, Middle East and India this year. | M&S opened 33 new stores outside the UK, taking its total to 296. The company is planning to open 50 new stores across Europe, Middle East and India this year. |
| It is running 15 stores in India, in partnership with Indian conglomerate Reliance, and plans to open 10 to 15 more over the next two years. | It is running 15 stores in India, in partnership with Indian conglomerate Reliance, and plans to open 10 to 15 more over the next two years. |