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* 2020-21 underlying profit falls to 50.3 mln stg
* Clothing and homeware sales down 31.5%
* Says new financial year has started well
* Says dividend in 2021-22 unlikely
(Adds detail)
By James Davey
LONDON, May 26 (Reuters) - British retailer Marks & Spencer
on Wednesday reported an 88% slump in full-year profit,
reflecting a collapse in clothing sales due to the COVID-19
pandemic, and warned investors not to expect a dividend in the
current year.
But it said it was making progress with its turnaround plan,
had traded well in the early weeks of the 2021-22 year and that
profits would recover, sending its battered shares up more than
4% in early trading.
M&S, which also sells upmarket food, made a pretax profit
before one-off items of 50.3 million pounds ($71.2 million) in
the year to April 3, down from the 403.1 million pounds made in
2019-20.
The 137-year old group, one of the best known names in
British retail, said like-for-like clothing and homeware sales
plunged 31.5%, damaged by multiple coronavirus lockdowns which
shuttered stores.
Clothing and homeware sales in stores crashed 56.2%, partly
offset by online growth of 53.9%.
In food, where space remained open during the crisis,
like-for-like sales rose 1.3%.
On a statutory basis M&S sank to a pretax loss of 209.4
million pounds, versus a profit of 67.2 million pounds in
2019-20.
All UK clothing retailers have been hit hard by the
pandemic. Last month Primark which does not trade
online, reported a drop in annual profit of 90%. Next,
which has a huge online business, has shown greater resilience
but its full-year profit still fell 53%.
CEO Steve Rowe has been driving M&S's latest attempt at a
reinvention after decades of failures.
Along with chairman Archie Norman he has focused on
transforming the company's culture, while closing stores,
investing heavily in technology and e-commerce, and improving
product and value to broaden its appeal.
M&S reckons the pandemic has masked the progress it is
making with its turnaround and said it has moved beyond the
"fixing the basics" stage.
"We now have a clear line of sight on the path to make M&S
special again. The transformation has moved to the next phase,"
said Rowe.
M&S said trading for the first six weeks of the 2021-22
financial year had been ahead of the comparable period two years
ago and its central expectations.
It forecast underlying pretax profit to recover to 300-350
million pounds in 2021-22.
($1 = 0.7065 pounds)
(Reporting by James Davey; editing by Kate Holton, Kirsten
Donovan)
