Marks and Spencer Net Profits Jump to Eight-year Peak

Posted 07 November 2006 @ 02:16 pm EET     Print     Reprint     E-Mail     Comments

LONDON (AP) - Marks and Spencer, the clothing-to-food retailer, has rang up the highest first-half net profit for eight years owing to a healthy increase in sales.

Marks, which trades from more than 450 British stores and 150 other branches worldwide, added that it was "well positioned" for the crucial Christmas shopping period.

Net profit leapt 32 percent to 281.3 million pounds (419.8 million euros, 535.5 million dollars) in the 26 weeks to September 30, 2006, Marks said in an official earnings release Tuesday. The figure marked the highest interim result since 1998, a group spokesman told AFP, and compared with 210.4 million pounds in the equivalent period of the previous financial year.

Pre-tax profits jumped by a third to 406.5 million pounds, beating analysts' consensus forecasts of 400 million, while group sales climbed 11 percent to 3.929 billion pounds. "We had a good first half," said chief executive Stuart Rose in comments accompanying the release.

"We have delivered better product, better service and better store environment. "We have gained market share in all areas in which we trade." Marks has staged a strong recovery since Rose was parachuted in as chief executive in May 2004 to fend off a 9.1-billion-pound takeover approach by British tycoon Philip Green.

The turnaround in the group's performance followed an overhaul of the Marks' store lay-outs and product ranges by Rose, who successfully fought off a 400 pence-per-share takeover bid by Green in 2004. Rose has since focused on store refurbishments, while an award-winning advertising campaign featuring 1960s fashion icon Twiggy has also lifted sales. "We believe we are well positioned for the all important Christmas period," Rose added in Tuesday's results statement.