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(Alliance News) - Marks & Spencer Group PLC on Wednesday said it remains confident of meeting full-year expectations, after a strong sales performance by both its Food and Clothing & Home arms in the first half.
The London-based high street retailer reported a 20% rise in pretax profit to GBP391.9 million for the six months that ended September 28, up from GBP325.6 million a year before.
Revenue increased by 5.7% to GBP6.48 billion, up from GBP6.13 billion a year before.
M&S attributed this to strong sales performances, particularly in the Food and Clothing & Home sectors.
Total sales increased by 5.8% to GBP6.52 billion for the half, up from GBP6.16 billion a year before.
Food sales rose by 8.1% to GBP4.18 billion from GBP3.87 billion a year prior.
M&S said the increase in food sales was driven by produce, meat and dairy sales, as well as rising customer numbers and transactions.
Also helping, the company said the average M&S food basket value rose by 2.6% to GBP15.6 from GBP15.2 a year before.
Clothing & Home sales increased 4.7% to GBP2.03 billion from GBP1.94 billion.
M&S said this was due to a disproportionately strong performance in the second quarter, supported by more seasonal weather and an improved online customer experience.
However, International sales fell by 12% to GBP321.0 million from GBP363.2 million.
M&S attributed this to "challenging trading conditions", with slower retail sales across the board, most notably in India.
The company also noted that results from Republic of Ireland have been reclassified from International to be reported within Food and Clothing & Home.
Additionally, M&S reported increased operating costs for the half as a result of new store openings and staffing and investments in digital and tech initiatives.
M&S holds a 50% share in online grocery retailer Ocado Retail Ltd. The other half is held by Ocado Group PLC.
Ocado Retail reported a pretax loss of GBP31.9 million for the six months ended September 1, narrowed from a GBP80.6 million loss a year before.
Ocado Retail reported a 14% rise in revenue to GBP1.32 billion, up from GBP1.16 billion a year before. This was driven by active customer growth and higher items per basket.
Ocado added that the percentage of M&S products in customers' baskets increased by 1.4% to 29.8%, due to a larger number of M&S products on the Ocado website and improved availability.
M&S announced an interim dividend of 1.0 pence per share, unchanged year-on-year.
M&S shares were up 7.3% at 411.42p each in London on Wednesday morning. Earlier Wednesday, the stock set a new 52-week high of 415.30p. Ocado Group shares were up 4.4% to 367.10p.
Looking ahead, M&S said it remains confident despite challenging economic conditions caused by continued cost inflation.
The company added it is "uncertain" about the long-term impact of Labour's recent budget on M&S, its suppliers and customers.
However, M&S confirmed that the first five weeks of trading in the second half of the year demonstrate the company remains on track to meet annual expectations.
Chief Executive Stuart Machin said: "We are confident and we remain on track and focused on what is in our control. We have the best Christmas food range I've seen in my time at M&S and the most stylish seasonal clothing offer yet, and we know customers are looking forward to celebrating Christmas with M&S."
By Lydia Doye, Alliance News reporter
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