M&S announces fall in full-year profits
Britain’s largest clothing retailer, Marks & Spencer (M&S) has dealt a blow to its shareholders today by announcing it is slashing its dividend to 15p a share for the 12 months to the end of March, down 7p from the previous year.
The cut was larger than analysts had expected but M&S said the cut was “tough but necessary”.
Meanwhile, the retailing giant has also reported that annual pre-tax profits fell to £706 million, compared with £1.1 billion the same period the previous year.
Shares in the retailer lost 5% in early trading today to 323.75p – the largest fall since early January.
The retailing industry has been hit hard during the economic downturn with M&S being no exception. Earlier this year, M&S announced a restructuring programme which resulted in the closure of 27 stores and more than 1,000 job losses.
Executive chairman, Sir Stuart Rose, said this morning: “Profits are down, and I regret that.” He described current trading conditions as “the most turbulent time for probably 50 years.” The group said it is cautious about the outlook for the remainder of 2009.
However, despite the store closures in the UK, the company opened 33 new stores outside the UK, taking its total to almost 300.
Expansion overseas is expected to continue this year with 50 new stores planned for Europe, the Middle East and India.
Finally, Sir Stuart announced that Carl Leaver is departing ways with the company. Mr Leaver was a potential successor to Sir Stuart and was hired to expand the group’s international business.
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