Interactive Investor

ii view: M&S is hungry for growth

After years of waiting, this chief executive finally looks to have unlocked the secret to growing this high street retail chain. Buy, sell, or hold?

28th November 2023 11:41

by Keith Bowman from interactive investor

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M&S 600

First-half results to 30 September

  • Revenue up 10.8% to £6.1 billion
  • Pre-tax profit up 56% to £325.6 million
  • Net debt down 13% to £2.56 billion
  • Interim dividend of 1p per share, no payment last year


  • Expects profit before tax and adjusting items to be weighted towards the first-half
  • Increasing its investment in reshaping M&S during the second half

Chief executive Stuart Machin said:

“Our strategy to reshape M&S for growth has delivered strong results in the first half. We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price. 

Looking ahead, trading momentum has been maintained through October, with customers responding positively to our Christmas ranges. There will be challenges and headwinds in the year ahead and progress won’t be linear, but we are ambitious for future growth and are driving what is in our control. In summary – we’re only just beginning. Lots done, lots to do, lots of opportunity.”

ii round-up:

Marks & Spencer Group (LSE:MKS) is a retailer of Clothing and Homewares, and Food, both in store and online in the UK and overseas. 

Its UK food business now includes a 50% joint venture with delivery company Ocado Group (LSE:OCDO)

For a round-up of these latest results announced on 8 November, please click here

ii view:

M&S operates 274 full-range and outlet stores as well as 780 food only stores, many which are franchised. Stores overseas total 415, again with many franchised. UK store numbers fell by a net three during this latest period, with international outlets growing by a net nine. M&S rivals include Next (LSE:NXT), Inditex which owns Zara, and online retailers such as ASOS (LSE:ASC) and rival food retailers such as Tesco (LSE:TSCO) and Sainsbury (J) (LSE:SBRY)

For investors, cautious management outlook comments referencing the highest interest rates in 20 years and erratic weather are not to be overlooked. Investment costs are also set to increase further, and year-on-year comparatives are becoming harder. The group’s joint venture with Ocado has yet to deliver on its hoped-for early promise, while a price-to-net asset value comfortably above the three-year average may suggest the shares are not obviously cheap.

On the upside, key metrics such as sales, profit and debt have all been moving in the right direction, and cost savings of £150 million this financial year remain in sight. Management initiatives including its store revamp and the selling of third-party brands are ongoing, while sufficient progress has made in reducing debt for the dividend to be reinstated. 

In all, and despite ongoing risks, progress continues to be made. This means existing long-term fans of this iconic retailer are likely to stick with it, while positive strides made might attract the attention of new investors.


  • Product and geographical diversity
  • Targeting cost savings


  • Competition not standing still
  • Uncertain economic outlook

The average rating of stock market analysts:

Strong hold

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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