* First half profit 269.4 mln stg
* Raises full year profit guidance to about 500 mln stg
* Says "hard yards" of driving change are working
(Adds detail)
By James Davey
LONDON, Nov 10 (Reuters) - British retailer Marks & Spencer
on Wednesday beat forecasts for first-half profit and
raised its full-year outlook but cautioned that the
reintroduction of dividends was unlikely this year as cost
pressures steepen.
The second profit upgrade in three months is the strongest
sign yet that a turnaround effort led by chairman Archie Norman
and CEO Steve Rowe is starting to bear fruit. Shares in the
British retail brand soared 16.2% in early trade.
The restructuring at the 137-year-old clothing and food
group is focused on rejuvenating an outdated store culture,
investments in technology and e-commerce and an overhaul of its
real estate but it is happening in conjunction with shortages of
products and workers as the economy reopens from pandemic
restrictions.
M&S made profit before tax and adjusting items of 269.4
million pounds ($363.4 million) in the six months to Oct. 2
versus analyst forecasts of 205-264 million pounds. It made a
loss before tax and adjusting items of 17.4 million pounds in
the same period last year.
The group raised its forecast for full-year profit before
tax and adjusting items to about 500 million pounds from
previous guidance of over 350 million pounds.
However, it cautioned that well publicised cost pressures
will become progressively steeper and it said the reintroduction
of dividend payments in the current year remained unlikely.
"It is clear that underlying performance is improving, with
our main businesses making important gains in market share and
customer perception," said Rowe.
"The hard yards of driving long term change are beginning to
be borne out in our performance."
British retailers are grappling with delays in their
international supply chains that are compounded by labour
shortages in the UK transport and warehousing networks.
M&S said trading for the first four weeks of the second half
has been consistent with growth rates reported in the second
quarter and ahead of management expectations.
It said it expected the strong demand to be sustained in the
near term.
The first-half performance was ahead of the profit of 176.3
million pounds made in 2019, before the COVID-19 pandemic
impacted trading.
Food sales increased 10.4% on 2019, while clothing and home
revenue was down 1%, with full price sales up 17.3%.
M&S cut its net debt to 3.15 billion pounds.
($1 = 0.7414 pounds)
(Reporting by James Davey; Editing by Kate Holton, Paul Sandle
and Carmel Crimmins)