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LONDON (Alliance News) - Marks & Spencer Group PLC on Wednesday reported a drop in profit in the first half of its financial year, but a slight rise in sales as its food business once again outperformed the weaker general merchandise division.
The clothing, food and homewares retailer said pretax profit in the 26 weeks ended September 26 fell 23% to GBP216.0 million from GBP279.4 million the year before, although revenue grew 1% to GBP4.95 billion from GBP4.90 billion.
M&S said that its food business delivered sales growth of 3.3%, offsetting a 0.4% decline in general merchandise, but profit was hit by a GBP68 million net charge, having benefited from a GBP11.8 million net credit the prior year.
The retailer added that the introduction of the UK government's new national living wage next year will not cause any short-term impact on staffing costs as M&S already pays more than the soon-to-be-enforced GBP7.20 minimum hourly rate.
M&S will pay a dividend of 6.8 pence for the half year, a 6.3% increase on the 6.4p it paid the year before.
"Despite some improvement in consumer confidence, market conditions continue to be challenging in both the UK and the International markets. Our short-term priorities remain the same: Food sales growth, GM gross margin improvement, improved GM performance and strong cash generation," the company said in a statement.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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