Rose under fire after M&S profits plunge

SHARES in Marks & Spencer plummeted yesterday after the retailer’s boss Sir Stuart Rose unveiled a 40 per cent collapse in profit and slashed the final dividend by 33.1 per cent.

Any hopes of a quick recovery in the sector were quashed after the M&S executive chairman said he was “was not in green-shoots mode yet”.

“There’s a push-pull going on at the moment between the consumer who is wanting to be more cheerful… while there are still some issues in the financial markets which could destabilise things,” he said.

Britain’s biggest clothing retailer reported a pre-tax profit of £604.4m for the year to 28 March, in line with analyst expectations of £603m but down from £1bn last year.

The dividend cut to 17.8p, from 22.5p paid last year, will be a blow to around 213,000 small investors in the firm who played a major role in thwarting billionaire retailer Philip Green’s takeover attempt in 2004.

And it will pile more pressure on Rose, who raised the total dividend by 23 per cent a year ago, and who was already under fire from investors for combining the roles of chairman and chief executive against corporate governance best practice.

But Rose said the group, which celebrates 125 years in business this year, plans to revive its fortunes with a change programme titled “2020 – Doing the Right Thing”.

The initiative will focus on improving operating efficiency and expanding online sales, and will be led by finance director Ian Dyson, leading to increased speculation that Dyson is being groomed to succeed Rose.

Rose said trading at M&S had remained in line with fourth-quarter trends in the first seven weeks of its new financial year, but was cautious on the outlook for the rest of the year.

Shares closed eight per cent lower at 311.75p.