Marks and Spencer posts rising annual profits

25th May 2010, Comments 0 comments

British retailer Marks and Spencer on Tuesday posted rising annual profits and sales and declared that the "worst effects" of the country's recession were behind the group.

Profits before tax and exceptional items, adjusted for property disposals, advanced 4.6 percent to 632.5 million pounds (740 million euros, 904 million dollars) for the group's financial year, which ended on March 27.

That eclipsed the group's official expectations of a range of 620-630 million pounds.

Net earnings increased 3.6 percent to 526.3 million pounds in the 2009-2010 fiscal year, and sales grew by 3.2 percent to 9.3 billion pounds, Marks also revealed in a results statement.

Chairman Sir Stuart Rose, speaking after publication of the results, told reporters that the "worst effects of the recession" were over -- but voiced some caution in light of government austerity measures in Britain.

"Marks and Spencer has had a good year. We have improved performance in all core areas, demonstrating the resilience of the M and S brand," added Rose in the earnings release.

"We took action to guide M and S through the recession without losing sight of what matters most to our customers -- quality and value."

Rose added that consumers were "naturally cautious" ahead of the release of the British government's emergency budget on June 22.

"We therefore remain cautious about the outlook for the year ahead," Rose said in a statement.

Britain's new coalition government of Conservatives and Liberal Democrats on Monday presented plans to axe 6.2 billion pounds from ministerial budgets, seen as a foretaste of tougher measures to come next month.

Economists here are talking of possible tax hikes that could discourage consumer spending.

"The government is between a rock and a hard place," Rose told reporters.

"The government wants to reduce deficit and VAT (value added tax, levied on goods and services) is a guaranteed revenue (source) but this also has an impact on those who (are less well off)."

The British economy clawed its way out of a fierce recession in late 2009 after a historic downturn that lasted for a record six successive quarters.

Official data showed Tuesday that the economy grew by a stronger-than-expected 0.3 percent in the first quarter of the year compared with the previous three months.

Rose said he was working alongside new chief executive Marc Bolland, who joined earlier this month, to ensure a "smooth transition" and added that he would also help look for a new chairman. Rose plans to leave in March 2011.

- Dow Jones Newswires contributed to this report -

© 2010 AFP

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