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(Sharecast News) - Marks & Spencer has said it expects current-year profits to take a £300m hit from a "highly sophisticated" cyber incident that has hampered operations over the past month.
The attack has hit food sales through reduced availability, while waste and logistics costs have risen due to the need to operate manual processes. Meanwhile, ecommerce sales for fashion, home and beauty still remain paused, with M&S expecting online disruption to continue throughout June and into July.
"Therefore, our current estimate before mitigation is an impact on group operating profit of around £300m for 2025/26, which will be reduced through management of costs, insurance and other trading actions," the retailer said on Wednesday.
The news came alongside the retailer's annual results for the 12 months to 29 March - the financial year ended before the cyberattack in late-April - which revealed a 24% drop in statutory pre-tax profits to £511.8m, mainly due to a £248.5m impairment charge against its investment in Ocado Retail.
Excluding adjusting items, however, pre-tax profit improved by 22% year-on-year to £875.5m - hitting its highest level in over 15 years - with the company making £120m in structural cost reductions during the year.
Sales were 6.1% higher at £13.91bn, with food sales rising 8.7% to £9.0bn, and fashion, home and beauty sales up 3.5% at £4.2bn. International sales were down 7.1% on a constant currency basis at £0.7bn.
M&S raised its full-year dividend by 20% to 3.6p per share.
"[The cyber incident] has been challenging, but it is a moment in time, and we are now focused on recovery, with the aim of exiting this period a much stronger business," said chief executive Stuart Machin.
"There is no change to our strategy and our longer-term plans to reshape M&S for growth and, if anything, the incident allows us to accelerate the pace of change as we draw a line and move on."
