Profit before tax at retailer Marks & Spencer fell nearly ten per cent in the last financial year, it said today as it announced plans to close 85 stores.
M&S said profit before tax for the year to 31 March was £532.2m, down 9.9 per cent from £580.9m the previous year.
Revenue fell 3.3 per cent to £10.3bn from just under £10.7bn the previous year.
Shares fell 4.7 per cent this morning to 258p.
Basic earnings per share fell 8.6 per cent to 25.4p from 27.8p.
Dividend per share fell 25 per cent from 18.7p to 13.9p.
UK food revenue was down 0.6 per cent, with like-for-like revenue down 2.3 per cent.
UK clothing and home revenue fell 3.6 per cent.
Separately, the company announced the terms of a £601.3m rights issue, the proceeds of which are intended to fund a joint venture with online delivery company Ocado.
Why it’s interesting
Today’s results mark the third consecutive year of declining profits at M&S. The company has embarked on an ambitious turnaround plan to restore its former fortunes which includes closing stores and investing in its online presence.
M&S said part of the reason for its steep fall in profits was £222m in extra costs from the "acceleration and extension" of its UK store closure programme.
The retailer said it closed 26 full-time stores and opened 48 new stores in the year. It plans a further 85 closures of full-line stores and 25 closures of Simply Food stores this year.
Its 50-50 joint venture with Ocado is part of a move to beef up its online presence and increase its grocery market share.
Richard Lim, chief executive of research consultancy Retail Economics, said: “Despite concurrent waves of political and economic upheaval, this is a mere distraction from the seismic structural shifts reshaping the retail trading environment. The business continues to struggle against the rapidly changing consumer environment and the race is on to pivot the business towards a more sustainable proposition that puts digital and experiences at its heart.
“The proposition remains lost amongst an increasingly competitive and dynamic market. The transformation needs to occur at a rapid pace, involving a reduction in the number of stores, repurposing space, reducing headcount and trying to leverage partnerships effectively if it is to survive this unprecedented era of disruption.”
What the company said
Chief executive Steve Rowe said: "We are deep into the first phase of our transformation programme and continue to make good progress restoring the basics and fixing many of the legacy issues we face. As I have said, at this stage we are judging ourselves as much by the pace of change as by the trading outcomes and change will accelerate in the year ahead.