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M&S reports 11.5% rise in profits Upbeat M&S eyes overseas growth
(4 days later)
Marks and Spencer (M&S) has posted a 11.5% rise in half-year profits, describing the performance as "good" in face of the poor summer weather. Marks and Spencer has reported a strong rise in half-year profits and unveiled plans to expand in China and India.
Reporting its results for the six months to 29 September, M&S made an adjusted pre-tax profit of £452m ($942m), up from £405m a year ago. M&S made an adjusted pre-tax profit of £451.8m ($942m) for the six months to 29 September, up 11.5% on last year and better than expectations.
Same-store sales at the retail giant, which exclude new store openings, were up 1.6% in the UK from a year earlier. Same-store sales, which exclude new store openings, were up 1.6% in the UK.
M&S warned that the short term UK retail outlook remained "uncertain". The retailer described the results as "good", given the poor summer weather, but it also warned that the short-term UK retail outlook remained "uncertain".
Overseas expansion
M&S said that it was now planning to enter the Chinese market, with its first store expected to open during the next financial year.
The actions we have taken to reposition and revitalise M&S... give us confidence in the long term growth prospects of the business Stuart Rose, Marks and Spencer chief executive Check M&S's share price
It also announced that it was planning to expand its presence in India, where it has traded for six years.
"We believe that there is a significant opportunity to grow our international business going forward and are targeting a 15-20% contribution to group revenues within the next five years," it said.
The retailer currently has 257 overseas stores in 36 countries.
'Tough market''Tough market'
The firm's total sales for the half-year came to £4.2bn, a 6.5% increase on the same period last year.The firm's total sales for the half-year came to £4.2bn, a 6.5% increase on the same period last year.
We believe that there is a significant opportunity to grow our international business going forward Marks and Spencer Check M&S's share price
Overall UK sales advanced 5.9%, while those at stores abroad jumped 13.8%.Overall UK sales advanced 5.9%, while those at stores abroad jumped 13.8%.
UK food sales were up 0.5%, while general merchandising sales grew by 2.3%.
"We had a good first half despite a tough market impacted by unseasonable trading conditions, and at a time when many of our stores were undergoing major refurbishment," said M&S chief executive Stuart Rose."We had a good first half despite a tough market impacted by unseasonable trading conditions, and at a time when many of our stores were undergoing major refurbishment," said M&S chief executive Stuart Rose.
"Whilst the short term economic outlook remains uncertain, the actions we have taken to reposition and revitalise M&S over the last three years put us in a good position to continue to outperform and give us confidence in the long term growth prospects of the business." "Whilst the short-term economic outlook remains uncertain, the actions we have taken to reposition and revitalise M&S over the last three years put us in a good position to continue to outperform and give us confidence in the long-term growth prospects of the business."
Mr Rose added that by Christmas M&S would have modernised 70% of its retail space. Mr Rose added that by Christmas, M&S would have modernised 70% of its retail space.
Chinese plans M&S also announced plans for a £1bn share buyback, which helped to lift its share price.
M&S's half-year UK food sales were up 0.5%, while general merchandising sales advanced 2.3%. Its shares closed up 21p, or 3%, at 653p.
The retailer said that it was now planning to enter the Chinese market and expand its presence in India, where it has traded for six years.
M&S currently has 257 overseas stores in 36 countries.
"We believe that there is a significant opportunity to grow our international business going forward and are targeting a 15-20% contribution to group revenues within the next five years," it said.
Retail analyst Jose Marco of Numis said the latest results from M&S were "strong".