Marks and Spencer has cut its dividend for the first time after another plunge in profits.
Marks and Spencer made a profit of £517m in the past year, compared to £546m last time and nearly £1bn in the year before that, on an equivalent basis.
The new M&S chairman, Luc Vandevelde, who was formerly with French supermarket chain Promodes, is keen on drawing a line under the losses and wants to focus on his plans for reviving the brand. .
“We cannot compromise our future investment capacity,” Vandevelde said. “I would ask shareholders to accept our current financial performance and recognise that this affects our dividend payout. I am not ignoring the past but we need to be realistic about today,” he added.
M&S changed the basis of its financial year, adding another week to include the late Easter. On that basis profits were £557m. Sales were down 7% for the year, but up 2.1% on a like-for-like basis in the first eight weeks of the new financial year in April and May.
Although sales of food and financial services have held up reasonably well, the continuing decline in sales of clothing are the main cause of the company’s problems. The head of the womenswear division, Barry Morris, has resigned from the board.
Despite dropping the St. Michael brand and launching new fashion lines developed by top designers, M&S is still under threat from the growth of discount retailers like Matalan, and is also losing market share to branded clothing.
It finally introduced credit card sales in the past year.
The results in full are up on www.marks-and-spencer.co.uk. The figures can be downloaded in different formats. For instructions, click here.
EGi News 23/05/00
