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* Says will not pay a final dividend for 2019-20
* Can't give meaningful guidance for 2020-21 earnings
* Seeing substantial sales declines in clothing and home
* Food business trading strongly
* Shares down 5.3%
(Adds detail, shares)
LONDON, March 20 (Reuters) - British retailer Marks &
Spencer warned on Friday trading over the next 9-12
months in its clothing, homewares and international businesses
was likely to be "severely impacted" by the coronavirus
pandemic.
To save cash, the group will not pay a final dividend for
its 2019-20 financial year, and it said it was unable to provide
meaningful guidance on earnings for 2020-21. However, it added
the post-crisis future of the business was strong.
"M&S has served customers without cease through two world
wars, terrorist bombings and numerous local disasters and we are
determined to support our customers now as we always do," the
136-year-old group said.
"While there are many uncertainties, we expect to come
through this period in a strengthened competitive position."
Shares in M&S were down 5.3% at 0829 GMT, taking losses for
2020 so far to 49%.
The group said it was seeing substantial sales declines in
its clothing and home business and has had to manage costs
accordingly, but expected to be able to redeploy significant
numbers of staff to support its food business, where trading has
so far remained strong. Some 4,600 have already been redeployed.
M&S is planning on the basis of a "prolonged downturn" in
demand for clothing and homewares, and preparing for the
contingency that some stores may have to close temporarily.
"However, our business model of operating parallel clothing
and food businesses and our strategy to move online including
the Ocado joint venture should provide more resilience
than some single sector businesses," it said.
DEFER SUPPLY
With margins likely to be severely impacted by the surplus
of unsold seasonal clothing stock and probable clearance
activity in the wider market, M&S said it was taking all
possible steps to defer supply.
The firm is reducing its clothing supply pipeline by over
100 million pounds ($118 million), postponing capital
commitments, deferring or cancelling discretionary spend and
deferring all pay increases. Not paying a final dividend will
save it 130 million pounds ($154 million).
M&S said pretax profit before one off items for the 2019-20
year could be at or below the bottom end of the analysts'
forecast range of 440-460 million pounds ($516-$540 million),
given probable very depressed trading in clothing and home.
The firm said it had total available liquidity of 1.34
billion pounds.
Separately on Friday, sporting goods retailer Frasers Group
, formerly Sports Direct, warned it would not meet
earnings guidance for 2019-20 as the coronavirus would cause
significant disruption to its business.
($1 = 0.8463 pounds)
(Reporting by James Davey; editing by Kate Holton and Mark
Potter)
