Marks & Spencer profits top £1bn

Britain’s biggest clothing retailer, Marks and Spencer (M&S), has posted a 4.3% increase in annual profits to £1 billion - their highest level since its 1997/98 financial year.

However, the retailer said it is cautious about its prospects for the next year and store staff have seen their bonus payout halved this year after missing targets.

Store teams are set to share £12.8 million. It paid out a record £91 million last year in bonuses to its 75,000 employees.

UK like-for-like sales, which exclude new store openings, fell 0.5% in both food and general merchandise in the 12 months to the end of March.

Commenting on the results, M&S said trading in the first seven weeks of the new financial year were mixed, with last month being difficult.

Sir Stuart Rose, chief executive, said M&S did not do quite as well as they would have liked. However, the retailer is in a good position to compete in the challenging retail environment being experienced in the UK and added tight stock control and management of costs are a priority.

New stores and expansions helped M&S boost its shop floor space in the UK by 4.8% during the year and it is forecasting growth of 5.5% in the current financial year.

International sales were up by 16.8% to £712.9 million, while operating profits were up 33% to £116.4 million.

Hargreaves Lansdown Stockbrokers said with more space being added in Europe and India, and with plans for a Shanghai store, M&S will be hoping to underpin any weakness in the UK environment with this geographical diversification.

In early trading today, shares were up 3.36% at 430.75p.

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