S & Spencer boss Marc Bolland is tomorrow expected to flag the beginning of a new era for the retailer, marked by improved margins and increased shareholder returns, despite a third year of falling profits.
The 130-year-old firm is expected by analysts to report a 7.5 per cent decline in full-year pre-tax profits from £665m to around £615m as its clothing arm continues to struggle.
M&S is at the end of a £2.3bn threeyear drive aimed at tackling years of under-investment and turning M&S into an international, multi-channel retailer. A huge chunk of that was spent on revamping its website and building a new distribution centre in Castle Donington.
With this plan now at an end, annual spending is expected to fall from £775m last year to £550m, improving the company's free cash flow. It could also signal returning more cash to shareholders.
"While M&S trading will have benefited from the warmer weather, market share performance is likely to remain challenging; we see little sign of outperformance against peers, or the confidence to lift guidance by the same quantum as Next," Peel Hunt analyst John Stevenson said.