British retailer Marks & Spencer has forecast 'modest' growth in revenue in its new financial year after 2022-23 profit beat expectations and said it would resume its dividend with an interim payout in November.
For the year to April 2, M&S made a profit before tax and adjusting items of £482 million (€556.8 million) – ahead of analysts' average forecast of £436 million (€503.6 million) but down from the £523 million (€604.1 million) made in 2021/22.
Profit fell in 2022/23 despite an 9.6% rise in revenue to £11.9 billion (€13.75 billion), due to higher energy and labour costs and unhelpful currency moves.
"One year in, our strategy to reshape M&S for growth has driven sustained trading momentum, with both businesses continuing to grow sales and market share," commented Stuart Machin, chief executive. "Our Food and Clothing & Home businesses invested in value to protect customers from the full force of inflation which, whilst impacting margin, was the right thing to do, as serving our customers well is the only route to delivering for our shareholders."
The group's profit was also dented by M&S's exit from Russia, the lack of the prior year's government support on business rates and a share of losses from its online grocery joint venture with Ocado.
M&S said food sales increased 8.7% over the year, while clothing and home sales were up 11.5%, with its bias towards older, more affluent customers giving it some protection from an ongoing cost-of-living crisis.
"Food outperformed the market, with customer perception for quality and value the highest in six years," Machin added.
It said it had made a good start to the 2023/24 year, with both food and clothing growing sales.
M&S has not paid a dividend since its 2019/20 year as part of a move to protect its balance sheet during the pandemic.