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Marks and Spencer (M&S) has revealed it expects its profits to flatline in the upcoming financial year as the rising cost of living coupled with increased costs are expected to impact its trading.
It comes as it also announced its decision to permanently exit Russia after temporarily suspending trading in the face of the ongoing war in Ukraine. M&S said it expects this decision to lead to extra costs of £31m.
In addition M&S said as it invests in capacity growth at Ocado Retail, it “anticipates a minimal contribution” of share of net income to group results.
The news comes as it revealed its full year results for 52-week period ended 2 April 2022, where it confirmed profit before tax and adjusting items of £522.9m, surging from £403m the previous year.
On a statutory basis it returned to profitability with profits after tax of £309m, up from a loss of £201.2m the previous year.
Revenue for the period increased 6.9% to £10.8bn boosted by a 10% increase in food sales and a 3.8% increase in clothing and home.
Steve Rowe, CEO: “When I took over the reins at M&S six years ago, I committed to tackling the underlying issues that had eroded the strength of the business and building the foundations for future growth. For me, what is important about these results is not just the restoration of profit and strong cash flow; it is that they demonstrate that M&S has fundamentally changed.
“While there is much more to do, the business has moved beyond proving its relevance and has the opportunity for substantial future growth. It has been my privilege to be the steward and shopkeeper of this fantastic business and extraordinary brand at such an important stage in its history.”
He added: “The changes we have delivered are down to the commitment and hard work of colleagues across the business, and I am delighted to hand the baton on to Stuart, Katie and Eoin to lead the next phase.”
