Marks & Spencer has unexpectedly increased its interim dividend as first-half results were much better than feared, with pre-tax profit flat and much improved cash flow.Even though warm weather in September led to like-for-like clothes sales falling 3.4% in the second quarter, group total sales advanced 1% to £4.9bn in the 26 weeks to 27 September, with like-for-like sales rising 1% thanks to strong growth in food and a better performance from womenswear.Although the market was expecting a fall in profits in the face of the cut-throat retail market, better general retail (GM) margins and cost-cutting helped underlying profit before tax rise 2.3% to £267.6m, with statutory profit slipping just 0.4% to £279.4mChief executive Marc Bolland said: "M&S delivered sales growth and increased profit in the first half despite a tough market, particularly in September."He was particularly pleased with the progress made against key management targets for the year as GM gross margins were hiked 150 basis points (bps), ahead of full-year guidance of 100bps, womenswear sales were up 1.3% and seeing an "improving trend", and in food total sales increased 3.6% and like-for-likes 1%, outperforming the market.Earnings before interest, tax, depreciation and amortisation climbed 7% to £578.8m, with free cash flow before dividend and share transactions jumped to £70.7m, from a negative £2.6m the year before.This led management to hike the dividend 0.2p to 6.4p per share.Certain aspects of full-year guidance was also updated: GM gross margin is expected to be between 150bps and 200bps, operating cost growth expectations were lowered from 4% down to 3.5%, while the company is accelerating the number of Simply Food store openings from 150 to 200 over three years.Within clothing, M&S warned market conditions remain challenging as it moved into the second half of the year due to the unseasonal weather resulting in high levels of promotional activity across the market.The results were, according to analyst Clive Black at Shore Capital, "robust given prevailing trading conditions", with GM "probably a little better than feared" while food is "solid, given industry softness and lowering inflation".Investec's Kate Calvert said the unseasonal September weather "overshadowed what was shaping up to be a reasonable half" and that with further progress expected in the second half she believes "the valuation does not reflect the shift in the business model to cash generation".However, Numis was somewhat disappointed in the 'mixed bag' results, with analyst Andrew Wade noting that continuing underperformance from GM LFLs and tough condition is likely to lead to little change to the consensus profit forecast, "which has already edged back over the last six weeks and has fallen 13% over the last year".Moreover, Alex Joyner at Galvan Research, questioned Bolland's position after £2.3bn of investment in te business over the last four years."Signs of the slowdown are spreading and these results do little to reassure us that Bolland has got things under control. His leadership has to come under question."He pointed to online sales down by 6.3% for the first half of this year, with M&S "still miles behind" and "just not grasping the opportunity".