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M&S Half-Year Results Decline By 2.1%

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Marks & Spencer Group Plc has reported on half-year results for the 26 weeks ended 28th September 2019.

Financial Data 

26 weeks ended

28 Sep 19

29 Sep 18 Restated1

Change %

Group revenue




Profit before tax & adjusting items2




Adjusting items2




Profit before tax 




Adjusted basic earnings per share2




Basic earnings per share




Free cash flow before adjusting items2,3




Net debt2




Net debt excluding lease liabilities2




Dividend per share





1. Prior year comparatives restated for the adoption of IFRS 16 ‘Leases’ and for the effects of the rights issue completed in June.  

2. See glossary for definitions and reconciliations to statutory measures. Adjusted results are consistent with how business performance is measured internally. Refer to adjusting items table below for further details. 

3. Free cash flow before adjusting items is the cash generated from the Group’s adjusted operating activities less capital expenditure, cash lease payments and interest paid.   

Transformation progress

  • Food business on track, with positive like-for-like sales and strong volume growth 
  • Acquisition of 50% of Ocado Retail completed and plans for M&S supply progressing well
  • Improved sales performance in October in Clothing & Home, following a difficult first half
  • Further action on UK store estate reshaping, with 17 full-line stores closed 
  • Cost savings of c.£75m delivered in the half
  • Balance sheet strengthened, with £250m bond issue, rights issue and dividend cut

Financial performance

  • Profit before tax & adjusting items down 17.1%, after weak first half Clothing & Home sales
  • Profit before tax up 51.5% at £153.5m, due to lower net adjusting items in the period compared to prior year
  • Food like-for-like sales growth 0.9% driven by volume. Gross margin rate slightly down, reflecting investment in trusted value 
  • Clothing & Home like-for-like sales down 5.5%, reflecting first half shape of buy and supply chain issues
  • Free cash flow before adjusting items of £91.9m affected by timing of working capital and tax payments, partly expected to reverse in the second half
  • Net debt of £4.13bn, down 3.7% largely due to cash generation over the past year 
  • Interim dividend of 3.9p, as previously indicated

Steve Rowe, Chief Executive: “Our transformation plan is now running at a pace and scale not seen before at Marks & Spencer. For the first time we are beginning to see the potential from the far reaching changes we are making. The Food business is outperforming the market. Our deal to create a joint venture with Ocado is complete and plans to transition to the M&S range are on track. 

In Clothing & Home we are making up for lost time. We are still in the early stages, but we are clear on the issues we need to fix and, after a challenging first half, we are seeing a positive response to this season’s contemporary styling and better value product. We have taken decisive action to trade the ranges with improved availability and shorter clearance periods. In some instances dramatic sales uplifts in categories where we have restored value, style and availability illustrate the latent potential and enduring broad appeal of our brand. Our cost reduction and store technology programmes are on track.”


We are in the first stage of our transformation programme to create a profitable, growing family of businesses under the M&S brand, bound together by a common consumer brand and integrated stores, employment values, technology and customer data.   

It is a period of profound change in both main businesses and in our organisation and culture. At M&S Food the substantially new leadership team is on track with our original timetable and results are beginning to show. In Clothing & Home we are running behind schedule but decisive action in the last three months, combined with a much stronger team delivering stylish product designed for a family customer, is illustrating the scope and potential for recovery in the business.  

Source : Insight DIY and Marks & Spencer

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06 November 2019

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